News

On May 30th 2018, the Brazilian Congress enacted Law 13,670/2018, aiming to compensate the tax relief granted by the federal government on the diesel oil, as an outcome of the recent negotiations with truck drivers, who recently came out on an unprecedented strike. The new legislation, amongst other important provisions as the recharging on the[...]

Brazil Signs New DTCs with Switzerland and Singapore, Seeking a Larger Tax Treaty Network Brazil recently signed Double Treaty Conventions (DTCs) with Switzerland and Singapore. These DTCs contain several rules aligned with the BEPS Project (Base Erosion and Profit Shifting), such as general anti-avoidance rules and exchange of information[...]

Superior Court of Justice Establishes Criteria for Approval of PIS/COFINS Credits on Inputs The Superior Court of Justice has taken up the decision of Special Appeal #1.221.170/PR, which deals with the definition of inputs for the purposes of Social Integration Program Tax (Programa de Integração Social), or PIS, and Social Security Financing[...]

States Make Progress in Resolving the ICMS “Tax war” Following the rules in Supplementary Law 160/2017, the states have approved an agreement (ICMS Convention 190/2017) that establishes rules for validating tax incentives granted improperly, as well as authorizing the granting of amnesty and the forgiveness of past debts. This convention[...]

States vs. Municipalities: ICMS Agreement 106/2017 Enhances the Conflict over Digital Goods Taxation (including Streaming and Software) There is an ongoing and significant conflict in Brazil between states and municipalities to decide who has the power to tax transactions involving digital goods, including streaming services and software,[...]

ICMS Tax War May be Coming to an End The Brazilian Congress has passed Supplementary Law 160/17, the main goal of which is to end the so-called “ICMS Tax War” among the Brazilian states. This tax war consists of states granting ICMS tax breaks without following constitutional procedures, leading states to disregard each other’s tax[...]

Brazilian Federal Revenue Office Reviews its Transfer Pricing Guidelines on International Cost-Sharing Agreements The Federal Revenue Office has issued Private Letter Ruling 99,069/2017, which states, among other things, that transfer pricing rules apply to international cost-sharing agreements related to non-core activities. However, the[...]

Brazilian Supreme Court Holds that the Inclusion of State VAT (“ICMS”) in the Calculation Basis of Social Contributions on Gross Revenues (“PIS/COFINS”) Is Unconstitutional After more than a decade of discussions, the Brazilian Supreme Court has held that taxpayers should exclude the ICMS amount from their gross revenues in order to[...]

REFORM OF TAX ON SERVICES APPROVED BY BRAZILIAN CONGRESS The Brazilian Congress has enacted Supplementary Law 157/2016, amending Tax on Services regulations. Important changes to the rules include: Taxation of streaming services; Update of the Taxable Services’ List, especially concerning technology services; Reinforcement of the[...]

AMORTIZATION OF GOODWILL IS DEDUCTIBLE FROM CSLL CALCULATION BASIS The Higher Chamber of the Administrative Tax Appeals Council (“CSRF”) has recently ruled that the amortization of the goodwill derived from the acquisition of investments is a deductible expense from the Social Contribution on Net Profit (“CSLL”). The court held that[...]