This publication aims to demonstrate, in view of Provisional Measure n° l. l 52/2022, the steps taken so far by Brazil, together with the OECD, in the search for greater adaptation to international market and business standards.
The content presented lists a history of Brazil's negotiations with the OECD and states that the new reform regarding transfer prices will bring Brazil closer to the Organization and will bring Brazil in line with the BEPS principles which contain, for example, the principle "arm's length", which in addition to being an important guideline for the provisions of the new MP, is the basis of the international standard and followed by most countries around the world to fix the prices of international transactions between related companies.
The main characteristics of the new PM demonstrated by this document have four main parts, they are:
Finally, according to the report, the new transfer pricing rules will come into effect on 01/01/2024, except for taxpayers who make the irreversible choice to opt for the application of the new rules as of 01/01/2023.
For more information on this topic, please consider our previous Newsletters and Tax Alerts
The Federal Revenue decided, in response to Formal Consultation Nº. 25343/2022 that, with regard to donations related to Trust operations established abroad that the ITCMD, which is the tax due on the “causa mortis” transmissions and donations, is levied on the transmission of any good or right acquired by donation.
Nevertheless, the ITCMD shall not be levied in the event that the institution of the trust instrumentalizes a payment due to the beneficiary, the latter becomes the holder of rights over the trust at the time of your indication, free of charge and by liberality, improving the donation.
Lastly, as ITCMD is a state-level tax, this decision is binding on such transactions only in the State of São Paulo.
The Council recently decided that the prohibition on the crediting of goods or services not subject to the payment of contributions, provided for in Article 3, Paragraph 2, of Laws 10,833/2003 and 10,637/2002, does not extend to the freight of inputs, even if in cases in which involves raw material purchased at a zero rate.
Based on this understanding, the CARF has allowed the use of PIS/Cofins credits on freight expenses for inputs purchased at a zero rate.
Through Formal Consultation COSIT nº 75/2023, the Administrative Council of Tax Appeals (CARF) decided in consultation on Withholding Tax (WTH) in the Software use license that the amounts paid, credited, delivered, employees or sent in a resident or domiciled abroad, by the end user, for the purposes of acquiring or renewing a license to use software, regardless of customization or the means used in delivery, characterize royalties and are subject to the incidence of WHT, as a rule , under the rate of 15% (fifteen percent).
Furthermore, in cases where the end user is resident or domiciled in a country with favored taxation, the IRRF rate on royalties due for the software use license will be increased to 25% (twenty-five percent).
On April 26th, the Brazilian Federal Supreme Court (STF) ruled to suspend the judgment of the cases in the Superior Court of Justice (STJ) that deal with the possibility of excluding the tax benefits of ICMS from the calculation basis of the Corporate Income Tax (IRPJ) and the Social Contribution on Net Income (CSLL).
By the determination of the responsible magistrate, the issue should be before requested to subjected to trial before the plenary of the Supreme Court, for understanding that it is a constitutional issue with possible conflict with theme under analysis by the Court.
