A corporate spin-off in Brazil is a transaction in which a company transfers part or all of its assets to one or more new or existing companies.
The spin-off may be partial or total, involving the revaluation of assets and liabilities, the redefinition of corporate responsibilities and the adequacy of accounting and financial records.
During the spin-off process, it is essential to consider the incidence of taxes on capital gains, the correct calculation of Income Tax, Social Contribution and the possible implications of indirect taxes.
We highlight the main tax aspects to be observed in business spin-off processes:
1. Incidence of Taxes on Capital Gains: When assets and liabilities are transferred to the new company resulting from the spin-off, capital gains may occur. This is especially relevant if the transferred assets are valued at fair value, reflecting an increase in value relative to their original carrying value.
2. Indirect Taxes: Depending on the nature of the transferred assets and business activities, there may be implications related to indirect taxes, mainly the Real Estate Transfer Tax (ITBI), impacting the cost of the spin-off operation.
3. Ancillary obligations: In the business spin-off process, it is crucial to ensure the correct and punctual delivery of ancillary obligations, such as the files of the Public Digital Bookkeeping System (SPED). Failure to deliver or errors in these obligations may result in extraordinarily heavy penalties.
4. Tax Losses: As a rule, Brazilian legislation does not allow the offset of tax losses of the successful spin-off, however, in partial spin-offs, there are specific rules that allow compensation proportional to the remaining portion of the net equity.
5. Tax Planning and Business Reorganization: To minimize the tax burden after the spin-off, it is essential to evaluate structuring alternatives and tax regimes to ensure that the operation is conducted efficiently from a fiscal, tax and accounting point of view.
Compliance with tax legislation ensures that the operation is conducted efficiently and avoids future problems with tax authorities, ensuring that the new corporate structure is sustainable and advantageous from a financial and operational point of view.
