Countries: Brazil

Brazil vs DSM Produtos Nutricionais Brasil S.A., October 2021, Federal Regional Court, Case No. 5013244-89.2018.4.03.6100

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DSM Produtos Nutricionais Brasil S.A. had based the intragroup pricing of imported goods on the “RPL-60 method” which applied in Brazil up until 2012. “Article 18, II of Law 9430/1996, as amended by Law 9. 959/2000, provides that the transfer price, in the case of goods and rights imported for application in the productive process, calculated by the resale price minus method – PRL-60 method -, is the arithmetic average of the resale prices of […]

Brazil vs Natura Cosmeticos S/A, August 2021, CARF, Case No. 16327.000738/2004-66

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Natura Cosmeticos S/A had been issued a tax assessment for FY 1999 to 2001. In the assessment interest income from loans granted to foreign group entities had been added to the taxable income of the company. NATURA COSMETICOS S/A stated that the transfer pricing rule provided for in paragraph 1 of article 22 of Law 9,430/96 did not apply. The rule determines that “in the case of a loan with a related person, the lending […]

Diageo – British multinational beverage and alcohol group – is facing various tax challenges

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Diageo (British multinational beverage and alcohol group – owner of numerus brands including Jonny Walker, Captain Morgan, Gordons Gin, Smirnoff and Guinness) is facing difficult tax challenges according to the group’s August 2020 SEC-filings. During 2017 Diageo was in discussions with UK tax authorities to seek clarity on Diageo’s transfer pricing and related issues, and in the first half of the year ending 30 June 2018 a preliminary assessment for diverted profits tax notice was […]

Brazil vs “CCA group”, September 2019, COSIT, SC No. 276-2019

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In a public ruling, the General Tax Coordination Office in Brazil (COSIT) found that a transaction labled as a “cost sharing agreement” between a foreign group and its Brazilian subsidiary, was in fact a mere agreement for provision of services. COSIT pointed to the key characteristics of cost sharing agreements. These had been listed in a prior ruling from 2012: Segregation of costs and risks inherent in the development, production or acquisition of goods, services […]

Brazil vs Pfizer Ltda, October 2018, CARF, Case No 1201-002.628

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A significant issue under dispute between taxpayers and the tax authorities in Brazil relates to the formula for calculating the resale price method (Preço de Revenda Menos Lucros) (PRL) of 60%. The Normative Ruling (NR) No. 243 issued in 2002 introduced significant changes to the calculation of the PRL method, creating controversy as to whether it had expanded beyond the scope of what the law intended. In the case against Pfizer Ltda the tax authorities […]

Brazil vs Macopolo, July 2014, Supreme Tax Appeal Court, Case no 9101-001.954

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The case involved export transactions carried out by a company domiciled in Brazil, Marcopolo, manufacturing bus bodies (shells) which were sold to subsidiary trading companies domiciled in low tax jurisdictions (Jurisdição com Tributação Favorecida). The trading companies would then resell the bus bodies (shells) to unrelated companies in different countries. The tax authorities argued that the sale of the bus bodies to the intermediary trading companies carried out prior to the sale to the final […]