ITAÚ RESPONDS ABOUT CHARGES OF R$ 20 BILLION

After the publication of the report on the billion-dollar charge made by the City of São Paulo, Itaú Unibanco responded to Rádio Antena 1 and presented its version of the facts. The bank claims that taxes were paid regularly to the municipality of Poá and maintains that the collection from the capital constitutes double taxation.

The statement was sent after the portal's editors sought out the bank's advisors to comment on the information published by Metrópoles. The original report, written by journalist Andreza Matais, detailed the accusations made against the institution and recalled that the matter was back on the agenda of the São Paulo City Council.

Itaú maintains that it maintained real activities in Poá between 1992 and 2019, with around 100 employees working in the areas of cards, leasing and consortiums. For the bank, the attempt by the capital of São Paulo to charge again the ISS, a municipal tax on services, would result in double taxation.

The City Hall presents another interpretation. In a list updated on June 23, the municipality placed the Itaú Group in first place among the 50 largest debtors registered in active debt, with R$20.05 billion. The value corresponds to 35.55% of the R$56.4 billion allocated to all companies listed by the municipal administration. The bank disputes the charges.

CPI approved invitation to ItaúThe case gained new political momentum on June 11, when the Debtors' CPI of the City Council approved invitations for representatives of different companies to provide clarifications. Itaú was among the institutions included.

According to Metrópoles, the approved application provides for the bank's finance director, Gabriel Amado de Moura, to be heard by the commission. The report reported that the representative must explain the institution's position on the values indicated by the City Hall.

The Chamber's official record classifies the measure as an invitation, not a subpoena. At the same meeting, professionals linked to Itaú, Bradesco, Caixa Econômica Federal, Santander, Sabesp, Enel, Vivo, B3 and other companies were invited.

The representatives of Hapvida NotreDame Intermédica, TIM, Claro and Facebook Serviços Online were summoned because, according to the Chamber, they did not justify their absence following previous invitations.

The commission investigates amounts of ISS, IPTU and other municipal taxes, whether or not registered in active debt. Its objective is to gather information about charges, monitor negotiation processes and try to recover resources for the city's coffers.

Where should the tax have been paid? The central question of the dispute seems simple: where, in fact, were the activities that generated the taxes?

Itaú says that the operations operated in Poá and that, therefore, the taxes were correctly paid to the municipality. São Paulo City Hall and the councilors who investigated the case in 2019 maintain that important decisions and part of the activities were conducted in the capital.

That year, the Tax Evasion CPI carried out investigations at two addresses related to conglomerate companies in Poá. The commission's final report recorded the presence of around six employees in one of the locations, in addition to several empty workstations. For the councilors, the structure was not compatible with the size of the operations attributed to the companies located at the addresses.

The document approved by the CPI concluded that companies such as Banco Itauleasing, Banco Itaucard and Dibens Leasing were only formally based in Poá and that the decision-making process took place in São Paulo. This is, however, the conclusion of the parliamentary committee - and not a definitive court ruling.

The report also suggested that the Public Ministry indict directors and executives. A recommendation made by a CPI, however, does not automatically represent a complaint accepted by the Court or a criminal conviction. In a note sent to Antena 1, the bank states that the judicial decisions on the merits handed down so far have been favorable to the institution.

Activities were transferred to São PauloIn May 2019, during the work of the CPI, Itaú presented a proposal to transfer the activities of three companies in the group to the capital of São Paulo.

The plan included the change of Redecard, then registered in Barueri, and Banco Itaucard's activities linked to leasing and card management, which were in Poá. At the time, the group itself estimated that the changes could add approximately R$230 million per year to the city of São Paulo's ISS collection.

The transfer was treated by councilors as a victory for the investigation. The bank, on the other hand, maintains that the operations previously carried out in Poá were true and regular. The change of address, therefore, should not be presented as a confession of fraud, as this interpretation is rejected by Itaú.

What makes up the R$20 billion? It is also important not to treat the R$20.05 billion on the City Hall list as if the entire amount corresponded only to the controversy over the addresses in Poá.

The number released by the municipality represents the total debts attributed to the Itaú Group in municipal active debt. According to the Metrópoles report, R$9.4 billion of the R$19.9 billion recorded in March were related to Itaucard and the discussion about the location of activities.

The same report cites another administrative process, linked to revenue received through the Itaucard marketplace. According to the newspaper, the Municipal Tax Council understood that amounts classified as profit sharing were, in reality, commissions paid by store owners, on which ISS would be levied.

The note sent to Antena 1 deals specifically with taxes paid in Poá and does not address this second process mentioned by Metrópoles.

Read the full statement from ItaúIn response to the request from Rádio Antena 1, the bank's advisor sent the following text:

"Itaú Unibanco clarifies that it is maintaining a legal discussion with the City of São Paulo regarding taxes that were duly collected for the municipality of Poá (SP). Between 1992 and 2019, the bank maintained operational areas for the card, leasing and consortium businesses, where 100 bank employees worked, in an administrative building in Poá (SP), a period in which taxes were paid regularly to the headquarters municipality. The City of the capital contests this location and tries to charge the same amounts, which would generate undue double taxation. Itaú is convinced of the regularity of its operations and the absence of any fraud, so much so that all decisions on the merits made to date have been favorable to the bank.

What remains to be clarified?The dispute brings together two clearly opposing versions.

The City of São Paulo registers Itaú as leader of the list of the city's largest debtors. Investigations carried out by the Chamber found that the addresses in Poá did not correspond to the true structure of the operations. The current CPI of Debtors wants to hear from a representative of the institution about the values.

The bank claims that it worked regularly in Poá, collected taxes from the municipality and is being charged again by the capital. It also maintains that there was no fraud, that it obtained favorable court decisions and that the charges are suspended thanks to the guarantees presented in the processes.

Until there is a definitive court decision, expressions such as "fraud", "evasion" and "simulation of headquarters" must remain attributed to the Metrópoles report, the City Hall, the Municipal Tax Council or the conclusions of the CPIs. Likewise, allegations of regularity, double taxation and favorable decisions must be identified as the version presented by Itaú.

Source: Antena 1