Even though it is legal, tax planning must have a “business purpose”, say...

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Setting up equity investment funds to prove to the IRS your "business purpose" is abusive tax planning. This was what the 1st Ordinary Panel of the 3rd Chamber of the 2nd Section of the Administrative Council for Tax Appeals (Carf) decided.


Disclosure
For the collegiate, the creation of a Participation Investment Fund (FIP) without a proven reason or business purpose constitutes abusive tax planning.
According to the winning vote, from councilor Juliana Marteli Fais Feriato, an operation does not just need to be legal, but have an economic purpose.

"The legality of the acts carried out, nor B2B Lead the argumentative maxim of corporate freedom of self-organization, is not enough to legitimize the alternatives chosen in a corporate restructuring, as these must be provided with an economic cause, so that the reason for the reorganization does not whether solely or predominantly to save taxes", he states, in the vote.

Unanimously, the class maintained a fine of R$48.3 million. The tax authorities saw irregularities in the creation of investment funds linked to a family holding company . For auditors, these funds would have to have been created to benefit the business. If the deal was done just to reduce the holding 's tax burden , the Tax Authorities understands, the planning is abusive. Carf agreed with the thesis, already discussed in other matters, such as the use of goodwill resulting from corporate restructuring.



"For me, there was fraud on the part of the taxpayer for simulation and evasion, for having carried out corporate operations that resulted in abusive tax planning. The main objective was the exemption from tax obligations with the sale of assets", said the rapporteur, counselor Juliana Marteli Fais Feriato .

The advisor also states that there are criteria to make tax planning legitimate. "The acts that imply a reduction in the tax burden must occur chronologically before the triggering event; the acts carried out by the taxpayer that resulted in the reduction of the tax burden must be lawful; and the expression of will must correspond to its factual realization, or better, to the its economic and social purpose.