The Ombudsman has asked the Secretary of State for Taxation whether it is possible to extend the tax reinvestment period without capital gains for families, subject to the restrictions caused by the pandemic.
According to a statement released on Tuesday, “Due to the restrictions resulting from the pandemic period, the Ombudsman has requested the Minister of Revenue to extend, including for certain taxpayers, the deadline for reinvesting the value of the sale. residential property when buying, building, or improving another property for the same purpose, without losing the benefit of the IRS exemption from capital gains arising from the sale of the first property.”
According to the institution, among the circumstances “which may serve as grounds for such an extension, the Ombudsman points out the difficulties that have arisen in the functioning of public services and in construction activities in connection with the COVID-19 pandemic, as well as established in the meantime by the legislator for legal entities” .
The provider recalled in the same note that “the IRS capital gains exemption benefit is only available if the reinvestment occurs within 36 months of the sale of the first property, a deadline that was complained of being hampered by the unforeseen circumstances of the pandemic.”
According to the communiqué, “the same term appears in the IRC code, and the legislator provides for the suspension of its countdown for two years.”
A letter to the Secretary of State for Tax Affairs, signed by Deputy Ombudsman Estrela Chabi, mentions that “clarifications have been sent to the Ombudsman regarding the already apparent intent of the DOC to collect capital gains from IRS taxpayers without due regard to the context of the pandemic that we are experiencing.”
The assistant mentions several cases of “taxable persons who disposed of real estate that constituted their own and permanent residence, in 2019 and 2020, indicating in the relevant income tax returns the intention to reinvest the value of the realization in the construction or acquisition of another for the same purpose, concluding in the last case before the promissory note agreement” and who “see that the crisis of the covid-19 pandemic makes such reinvestment impossible within 36 months from the date of implementation.”
The assistant also recalled that “in relation to legal entities, Article 6 of Law No. 21/2021 of April 20 determined with retroactive effect to January 1, 2020 that “is suspended during the 2020 tax period and during the next tax period the reinvestment period is counted, provided for in paragraph a) of paragraph 1 of Article 48 of the Tax Code of the Russian Federation.
“Until now, there has been nothing like this for individuals,” he stressed.
According to the official letter, “preventing a potential increase in conflict in administrative and judicial justice on a matter that appears unfair in itself and in comparison with the emergency regime provided for legal entities”, the Deputy Ombudsman asks the Secretary of State “the possibility also to suspend for two years, with January 1, 2020, the period provided for in paragraph 5 of article 10 of the IRS Code, for reinvestment in property for own housing and permanent property of an IRS taxpayer or his family.
Author: Portuguese
Source: CM Jornal
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