Article 9 of the Franco-Brazilian Tax Convention of 10 September 1971 contains provisions according to which, in the case of companies that are not at arm’s length from each other, profits that have been transferred directly or indirectly by a company of one of the contracting States to a company of the other contracting State may be included in the profits of the first company and taxed accordingly. It is clear from these provisions that they allow the administration of the State to which an enterprise which, by virtue of its situation and operations, falls within their scope belongs, to apply the domestic tax law. On the basis of the provisions of Article 57 of the CGI, the administration reintegrated into the company’s results subject to corporate income tax the commissions, evaluated at the rate of 0.50%, that the company should have received as remuneration for the guarantees that it had granted to its Brazilian subsidiary as a guarantee for ...
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