Post by xyz3500 on Feb 21, 2024 23:06:15 GMT -5
What rates should be applied to calculate capital gains tax? Don't be fooled. Even a case that may seem simple brings complexity that requires careful analysis. The hypothetical situation could be extracted from any merger and acquisition operation in which an individual sells a shareholding and realizes a capital gain. The legislation and guidance from the authorities do not allow for discussion regarding the event generating Income Tax (birth of the tax obligation) on the capital gain due on the sale of shares in installments: determined as if the sale were carried out in cash (economic availability /legal income) and the tax collected upon receipt of the respective installments (obligation due), Until , the tax rate on this capital gain was single (15%). There was no controversy.
However, a red light came on with the publication of MP 692/, converted into Law 13,259/2016, which established progressive rates from 15% to 22.5%, starting in . For disposals of shares carried out before 2017 with releases of values after 2017, or even, for disposals carried out after and values released Israel Mobile Number List at different times: what is the applicable rate? The legislation defined and the authorities recognize that the triggering event for Income Tax levied on capital gains in this case occurs upon sale, which is when the tax obligation arises, with the completion of the sale and definition of the five aspects of the incidence hypothesis that authorizes the requirement of IR: material; spatial; temporal; guys; quantitative (calculation basis); quantitative rate.
We safely affirm that in the sale of shares prior to , with part of the value received after , the IR rate levied on the capital gain determined upon receipt of the installments or any possible price adjustment ( escrow ) is that in force at the time of the occurrence of the respective triggering event (time of sale): 15% provided for in legislation prior to the amendment of the law. Payment of the price fixed for the sale in installments simply represents a deferral, since the triggering event occurs upon sale, when the obligation to collect income tax arises; the deadline for its payment is postponed until the moment of receipt of the price, which only represents the maturity of the obligation. Such postponement is not intended to transfer the occurrence of the triggering event to the future.
However, a red light came on with the publication of MP 692/, converted into Law 13,259/2016, which established progressive rates from 15% to 22.5%, starting in . For disposals of shares carried out before 2017 with releases of values after 2017, or even, for disposals carried out after and values released Israel Mobile Number List at different times: what is the applicable rate? The legislation defined and the authorities recognize that the triggering event for Income Tax levied on capital gains in this case occurs upon sale, which is when the tax obligation arises, with the completion of the sale and definition of the five aspects of the incidence hypothesis that authorizes the requirement of IR: material; spatial; temporal; guys; quantitative (calculation basis); quantitative rate.
We safely affirm that in the sale of shares prior to , with part of the value received after , the IR rate levied on the capital gain determined upon receipt of the installments or any possible price adjustment ( escrow ) is that in force at the time of the occurrence of the respective triggering event (time of sale): 15% provided for in legislation prior to the amendment of the law. Payment of the price fixed for the sale in installments simply represents a deferral, since the triggering event occurs upon sale, when the obligation to collect income tax arises; the deadline for its payment is postponed until the moment of receipt of the price, which only represents the maturity of the obligation. Such postponement is not intended to transfer the occurrence of the triggering event to the future.