Tax Effects on Share Transfer Operations

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Stock transfer transactions are a common way of acquiring and capitalizing businesses. This type of transaction can materialize through onerous legal acts ( Eg Buying and Selling) or free ( Eg Donation). The importance of the subject transcends the commercial sphere and extends to the fiscal impact that derives from this type of operation; being the latter on which we will focus in this article.

Tax applicable to the transfer of shares

 According to what is contemplated in article 15 of Law No. 822 “Tax Concertation Law” (LCT) and its reforms, the disposal of shares, whether for consideration or free of charge, can generate a capital gain; this would be taxed by the Capital Gains Income Tax.

In other words, whenever a transfer of shares is intended to be carried out, it is essential to confirm whether or not, according to the parameters regulated in the tax legislation, a capital gain has been generated. For such purposes, we must remember that capital gains consist of those positive variations in the value of the taxpayer’s assets, as a result of the alienation of assets, assignment or transfer of his rights.

From the above, the following question arises: How can I calculate the capital gain that will be subject to Income Tax? Next, we briefly explain the applicable procedure:

First of all, we must determine the taxable base of the tax; this varies according to the type of transaction:

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