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DIVIDENDS RECEIVED BY COMPANIES COULD BE TAXED WITH INDUSTRY AND TRADE TAX

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DIVIDENDS RECEIVED BY COMPANIES COULD BE TAXED WITH INDUSTRY AND TRADE TAX

Industry and Trade Tax

The Superior Administrative Court clarified the criteria under which the companies should file and pay industry and trade tax for dividends received

 

By means of decision No. 21776 of May 31th 2018, the Superior Administrative Court clarified that in order to determine whether the dividends received by a company are subject to industry and commerce tax, the following criteria should be verified: (i) the company’s principal business activity; and (ii) if the shares, by virtue of which the dividends are received, are registered as fixed or mobile assets.

In this sense, the dividends would be taxed with the industry and trade tax when the company incorporates companies and participates in the acquisition of shares on a regular basis and with professional criterion.