Elias, Matias Advogados

Estate planning aims to ensure the proper transfer of assets, preventing disputes and protecting property. When it comes to digital assets, such as social media accounts, cloud-stored files, and email accounts, the complexity increases due to technical and legal factors, including online access and the intangible nature of these assets. Without a strategy for managing digital assets, heirs may face difficulties accessing essential accounts or risk losing valuable resources, such as cryptocurrencies. One essential solution is the creation of a digital inventory, which should contain a detailed list of all digital accounts, including login credentials, passwords, and other necessary access information. It is also crucial to establish guidelines for the management of these assets through a digital will, specifying how the digital estate should be administered. Brazilian legislation on digital inheritance is still in the process of adaptation. Currently, there are no comprehensive regulations governing the succession of digital assets, and each platform has its own policies. Some allow for the deletion of profiles, others provide the option to appoint a legacy contact to manage accounts, and cryptocurrencies require strict control over private keys. This underscores the need for a well-structured estate plan, supported by specialized legal counsel, to ensure that the deceased’s wishes are honored and that heirs can properly manage digital assets.    

The tax reform represents a significant change in the Brazilian tax system, potentially affecting pricing, risk allocation, and, most notably, contractual obligations. The replacement of taxes such as PIS, COFINS, ICMS, and ISS with the Value-Added Tax (VAT), in the forms of CBS (federal) and IBS (state/municipal), alters the taxation of goods and services, requiring a review of business contracts to reassess clauses related to tax pass-through and price adjustments. In Articles of Incorporation, the taxation of dividends and profit distribution must be reevaluated, as many companies are structured based on the exemption of these taxes. It will be essential to analyze whether this structure remains advantageous or if adjustments are necessary to ensure compliance with the new legislation. For instance, companies previously transferred assets to partners without taxation due to the existing exemption; however, such transactions will now be treated as sales, ensuring the collection of IBS and CBS. Consequently, asset-holding structures and dividend distribution methods will need to be reassessed, as the use of assets to “compensate” partners will now entail the tax burden of IBS and CBS. The reform also impacts companies under the Simples Nacional tax regime by expanding the definition of gross revenue and including previously exempt revenue sources, thereby increasing the tax burden. Furthermore, micro and small businesses will no longer be allowed to have branches or representatives abroad. Another critical aspect is the increased risk of litigation, as changes in tax payment responsibilities may lead to disputes over contractual balance, particularly in agreements executed before the reform. Companies that fail to revise their contractual clauses may encounter difficulties renegotiating prices or passing on additional costs, increasing the likelihood of judicial disputes or arbitration proceedings. To mitigate these risks, it is essential for businesses to seek legal counsel to review existing contracts and draft new provisions aligned with the new tax framework. Thus, the reform demands careful attention to contractual implications to reassess existing clauses, mitigate risks, and prevent unforeseen financial impacts. Although the adaptation process is challenging, it presents an opportunity to enhance corporate and contractual structures, ensuring that companies are well-positioned to thrive in the new tax landscape.

Among the most complex and sensitive topics in contemporary Tax Law is the exemption from ITBI (Real Estate Transfer Tax), particularly in capital contribution transactions for companies in the real estate sector. A major controversy arises regarding the application of Article 156, §2, I of the Federal Constitution, which addresses tax immunity in the transfer of assets and rights to the equity of legal entities. While the Constitution grants municipalities the power to impose ITBI, it also establishes limits on this authority through tax immunities. The confusion surrounding the interpretation of this provision was initially clarified years ago when the Federal Supreme Court (STF) ruled on the issue in a case of general repercussion. However, the decision in Topic 796 caused considerable debate in the tax law sphere. The ruling determined that ITBI does not apply to real estate assets incorporated into a legal entity’s capital stock or to transfers of assets and rights resulting from mergers, incorporations, spin-offs, or the dissolution of legal entities. In other words, the Court granted unconditional ITBI immunity in such cases. The controversy stemmed from the fact that the core issue in Topic 796 was not directly ITBI immunity itself, but rather whether the tax should apply to the portion of a property’s value exceeding the contributed capital stock. This distinction has led to ongoing uncertainty. Currently, the Supreme Court is once again reviewing the issue under Topic 1,348 of General Repercussion, a decision that will have significant implications for the real estate market and the taxation of property transfers across the country. According to Camila Resende, a tax law specialist at Elias, Matias Advogados, the courts have consistently ruled in favor of taxpayers, recognizing unconditional tax immunity based on the Supreme Court’s prior interpretation. Until a final decision is reached that provides greater legal certainty for taxpayers, Camila emphasizes the importance of strategic and well-structured corporate and estate planning to mitigate potential risks for companies. https://www.eliasmatias.com/newsletter/142/Argumento-142.pdf  

The Federal Council of the Brazilian Bar Association (OAB) has approved a set of recommendations to guide the use of generative artificial intelligence (AI) in legal practice. These guidelines aim to promote ethical and responsible AI usage, ensuring compliance with the fundamental principles of the legal profession and applicable legal requirements. Drafted by the OAB's National Observatory on Cybersecurity, Artificial Intelligence, and Data Protection, the recommendations outline four key directives: Applicable Legislation, Confidentiality and Privacy, Ethical Legal Practice, and Communication Regarding the Use of Generative AI. Their purpose is to align AI usage with the existing legal framework, including the Statute of the Legal Profession, the OAB Code of Ethics and Discipline, the General Data Protection Law (LGPD), the Code of Civil Procedure, and intellectual property regulations. Additionally, the guidelines emphasize the need to safeguard client confidentiality, encourage ethical AI implementation, ensure transparency in client communications regarding AI usage, and periodically review the recommendations to keep pace with technological and regulatory developments. OAB President Beto Simonetti underscored the importance of this initiative, stating: “Brazilian advocacy is being challenged by the advancement of AI, and the OAB is ready and prepared to address these transformations.” He further emphasized that the responsible use of AI is not only a professional obligation but also a societal commitment, ensuring that technology enhances client service and improves the efficiency of the justice system. These recommendations serve as a framework for the safe integration of AI into legal practice, offering law firms greater confidence and security when adopting such technologies. According to the Observatory’s coordinators, adherence to these directives can strengthen trust between lawyers and clients, ensuring that AI use remains aligned with client interests and within the ethical boundaries of the profession. The responsible and regulated development of AI is crucial to preventing negative consequences while maximizing its benefits without compromising security or human oversight. Key aspects of the recommendations include the need for lawyers to supervise AI applications, ensure transparency in client communications, uphold confidentiality and service quality, and remain updated on technological advancements. The recommendations stress the importance of oversight and control over AI use within law firms. Lawyers in leadership positions must ensure that all team members comply with established security and privacy policies and receive ongoing training in the ethical and secure use of AI tools. Supervision is essential to prevent AI from replacing human judgment and to ensure that legal tasks exclusive to licensed attorneys remain within their domain. Although the OAB’s recommendations do not have the force of law to impose sanctions, they serve as a critical advisory for lawyers to adhere to the OAB Code of Ethics and Discipline, aligning AI use with best professional practices. The document emphasizes the necessity of maintaining human oversight in decision-making and prohibits the exclusive delegation of legal activities to automated systems, reinforcing that AI should function as an auxiliary tool rather than a substitute for legal reasoning. At Elias, Matias Advogados, we have established an Artificial Intelligence Working Group dedicated to analyzing technological advancements and their implications for daily legal practice. This group continuously explores innovative tools while ensuring their responsible and ethical implementation in alignment with the OAB’s guidelines. Our focus is to integrate AI-driven innovations in a manner that enhances client services while upholding the ethical principles that govern the legal profession. https://www.eliasmatias.com/publicacao/oab-aprova-recomendacoes-para-o-uso-de-inteligencia-artificial-na-advocacia/1023