During a recent judgment, CARF decided that there is no alienation in stock merger, since this transaction represents only a legal subrogation of the shareholders of the company whose shares have been merged into the merger’s shares. Thus, the taxation of a potential capital gain would only occur afterwards, if the shares are sold in the future.

This decision also analyzed the taxation regime applicable to individuals. As provided by law, individuals’ income tax is assessed under cash basis, that is, the taxation occurs when the capital gain is effectively obtained. Thus, considering that no payment is made upon the stock merger, it cannot be subject to Income Tax.

(Decision n. 2202-002,187. Available at: <http://carf.fazenda.gov.br/sincon/public/pages/ConsultarJurisprudencia/listaJurisprudenciaCarf.jsf>. Accessed in: April, 2013).