Juliana Mello

Juliana Mello

The Brazil Business


Taxes on Inheritance in Brazil

Juliana Mello

Juliana Mello

The Brazil Business


The Brazilian tax on inheritance is known by the acronym ITCMD. In this article, we will provide general information about it, who must pay it, what are the rates, and the basic legislation regarding it.

In Brazil, taxes on inheritance have existed for a long time, but only over the past few years the governments started to collect it in a large amount. That is because people here didn’t know or ignored the existence of the tax, or even failed to pay it.

However, the technological breakthrough made it possible the advance of the software used by the Federal Revenue Service to oversee the citizens by crosschecking information. And now, the institution is charging all the people who managed to hide their gains from the tax, with interests and monetary readjustment.

To give an idea, regarding the amount of unpaid tax, São Paulo state has issued over the past four years, more than 7000 notices to taxpayers who didn’t collect the ITCMD.

Also, in recent years, agreements signed between the State Departments of Treasury and the Internal Revenue Service have identified taxpayers who received goods, stating the amounts received as not taxable under the rules of Income Tax for Individuals.

From the perspective of the Revenue, they are even. But from the point of view of the States, they failed to collect the ITCMD. That’s because the tax on inheritance is a state tax, what we will discuss further.

An introduction to ITCMD

The Imposto sobre Transmissão Causa Mortis e Doação (Causa Mortis Transfer of Real Estate Property Tax and Donation of Any Type of Property or Rights) is better known by the acronym ITCMD.

As stated above, ITCMD is a state tax, which means that it’s up to the Brazilian federative units to establish the rates, legislation and payment deadlines regarding this tax.

Each Brazilian state has a different aliquot for ITCMD. To give an example, São Paulo state has its ITCMD rate fixed on 4% over the value of the inheritance. The maximum rate allowed by the Federal Government is 8%.

In this article, we are focusing on inheritance, but ITCMD is also meant for donations as well.

ITCMD: who must pay it and rates

In order to define the taxpayers of ITCMD it is considered the value of the asset and the amount of money inherited. The states are independent to fix their minimum value to start charging the ITCMD.

In São Paulo state, this value is fixed in BRL 40.000. So any citizen inheriting an asset or amount of money of more than BRL 40.000 will have to pay 4% of it on ITCMD. But this minimum value changes from state to state as well as the rates.

Some states even charge different rates for minimum values. Minas Gerais state, for example, establishes a 5% rate for inheritances above BRL 200.000 and a 2% rate for inheritances between BRL 20.000 and BRL 200.000.


When the "deceased" owned property, was resident or had his inventory processed outside the country, the ITCMD is charged only in the following conditions:

If the inheritance is an asset:

  • when the asset is located in a Brazilian state
  • when the asset is located abroad and the heir, legatee or donor is domiciled in a Brazilian state

If the inheritance is money or other intangible asset:

  • when the act of transfer or settlement occurs in this state
  • when the act mentioned in the preceding paragraph occurs abroad and the heir is domiciled in a Brazilian state.

How is ITCMD collected?

The ITCMD is collected by the State Secretariat of Finance of each Brazilian state. The tax can be paid on a single installment or in several installments. Most states give the taxpayers the option of paying ITCMD in up to 12 monthly installments.

The payment of the tax will be done through the tax payment form, filled by the taxpayer, according to the model approved by the State Finance Secretariat from the state where the inheritance is located. The institution will calculate the ITCMD due, and retrieve the amount of the tax to be collected.