The Application of General Constitutional Principles Governing Taxation to Control Tax Exemptions Pursuant to Precedents of the Supreme Court of Brazil

Juliana Bastianello Baldin Martins, Director, GTIS Partners LP, Brazil

The purpose of the paper is to analyse how the Supreme Court of Brazil applies general tax principles to control tax exemptions. More specifically, the paper envisions to answer whether, based on the Supreme Court of Brazil’s view, tax exemptions can be granted, extinguished or modified according to political criteria, without consideration to general tax principles. For that, the application of four general tax principles commonly referred by Brazilian scholars will be analysed: rule of law, equality, non-retroactivity and anteriority. Other principles, such as the principles of the capacity to contribute and the prohibition of confiscatory taxation, which are also general tax principles under Brazilian constitution, will not be analysed. After a brief introduction, the paper brings an explanation of the legal classification of tax exemptions, as well as of the four principles to be considered, pursuant to Brazilian law. Then, decisions issued by the Supreme Court of Brazil with respect to tax exemptions will be analysed. Finally, conclusions will be drawn in order to identify the tendency verified in the decisions of the Supreme Court of Brazil regarding the application of general tax principles to control tax exemptions.

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Brazil Taxation Publishing April 2017 Vol.10, No. 39, Spring 2017

Juliana Bastianello Baldin Martins

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Juliana Bastianello Baldin Martins joined GTIS Partners on May 2011 and is currently a Director at the firm. Mrs. Baldin Martins is responsible for legal matters pertaining to real estate, corporate, contracts and tax activities. Mrs. Baldin Martins has over six years of experience in corporate law. Prior to joining GTIS Partners, she was a lawyer at Machado, Meyer, Sendacz e Opice Advogados, one of the largest law firms in Brazil, where she spent over three years dedicating herself to mergers, acquisitions and corporate restructuring transactions. Prior to Machado, Meyer, Sendacz e Opice, she was an intern at TozziniFreire Advogados, also one of the largest law firms in Brazil, where she dedicated herself to capital markets transactions for over three years. As a lawyer at Machado, Meyer, Sendacz e Opice and as an intern at TozziniFreire Advogados she rendered services to the largest corporations and investment funds acting in the Brazilian real estate and capital markets segments. For two consecutive years, 2010 and 2011, Mrs. Baldin Martins contributed with comments on Brazilian corporate law to the “Doing Business”, a publication of the World Bank and the International Finance Corporation comparing business regulation in several economies. Mrs. Baldin Martins graduated from São Paulo University Law School (USP) in 2007, completed her Master of Business Administration at Fundação Getúlio Vargas (FGV) in 2011 and obtained a post-graduation degree in Tax Law at Fundação Getúlio Vargas (FGV) in 2016.

GTIS Partners LP

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GTIS Partners LP (“GTIS Partners”) is a global real estate investment firm headquartered in New York with offices in Los Angeles, San Francisco, Atlanta, São Paulo, Paris and Munich. GTIS Partners was founded in 2005 and is managed by President Tom Shapiro and Senior Managing Directors Josh Pristaw, Rob Vahradian, Tom Feldstein and João Teixeira. GTIS Partners has eighty-four employees and currently has approximately US$3.8 billion of assets under management. The firm pursues opportunistic real estate investments through direct equity investment and non-traditional lending activities. To date, the firm has committed capital to residential, retail, industrial, office, hotel and mixed-use projects in the U.S. and Brazil, and is among the largest real estate private equity companies in Brazil. The principals of GTIS Partners have over 130 years of investment, legal, management and operations experience, which spans all major property types and geographies. By combining hands-on real estate expertise with a disciplined investment approach, GTIS Partners creates value for its investors and partners.

Brazil Taxation Publishing April 2017 Vol.10, No. 39, Spring 2017