News

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[...]

1) The Superior Court of Justice holds that the Federal excise tax (IPI) is levied on saleS of imported goods Even though an earlier ruling from the Superior Court of Justice was favorable to taxpayers, in a decision under the repetitive appeals system (Recursos Repetitivos), the Court held that sales of imported goods are subject to the Excise[...]

Constitutional Amendment 87/2015 – Division of the ICMS tax in interstate transactions and provisions of services intended for final consumers Constitutional Amendment 87 has changed how the Tax on the Circulation of Merchandise and Services (Imposto sobre Circulação de Mercadorias e Serviços), or ICMS, is divided in transactions with[...]

Brazil issues a new regulation on the program to allow exporters to recover residual tax costs (REINTEGRA) Law 13,043/2014 has reintroduced the program to allow exporters to recover residual tax costs incurred in the export production chain, ranging from 0.1% to 3% of their total export revenue (REINTEGRA). According to Decree 8,415/2015, the[...]

Brazilian Government extends Manaus Free Trade Zone The Manaus Free Trade Zone was conceived as an import and export free trade area with special tax incentives (tax breaks, extra tax credits and deferrals) that was supposed to last until 2023. However, the Brazilian Congress enacted Constitutional Amendment 83/2014 on August 6, extending the[...]

Taxation of Profits of Controlled Foreign Companies (CFC): Double Taxation Conventions must prevail over domestic rules The Superior Court of Justice (STJ) has recently decided a case involving the applicability of Brazilian CFC rules in cases in which the controlled company is located in a country with which Brazil has a Convention for[...]

Withholding Income Tax on Transactions between Residents and Nonresidents – New Rule on Capital Gains and Technical Services On March 7, 2014, Brazilian Federal Tax Authorities issued a new Normative Ordinance (IN 1,455) regarding the withholding income tax on transactions between residents and nonresidents. Among the issues addressed by the[...]