Tax lawyers are the unassuming superheroes of Brazil. According to the World Bank, a Brazilian company on average takes longer to prepare, file and pay taxes than anywhere else across the globe. Alongside national charges, there are regional taxes imposed by 27 states and more than 5,500 municipalities. Predictably, there is one word on every policymaker's mind: Reform.
ITR brings you practical insight, in English and Portuguese, into some of the most significant recent developments from the Brazilian tax world.
The guide takes on a journey across a range of topics on reform, considering the main objectives and challenges that lay ahead. In addition, the much-debated opinion regarding the offsetting of tax losses in the termination of companies is also discussed.
Brazil is simultaneously undergoing the most radical changes to its transfer pricing (TP) regime in decades. By taking a novel approach, policymakers have sought to adapt the country's historically formulaic TP framework to align with international standards.
This guide explains the importance of Brazil's convergence towards the OECD's model and evaluates its merits. Meanwhile, further trends, inspired by global adherence, including the tax implications of increased cost-sharing agreements and the utility of US-inspired tax transactions to resolve disputes, are analysed.
Digital technology continues to transform the order of business in Brazil. Manufacturers have stepped up their investment in research and development and the government has incentivised innovation through the form of tax-deductible financial credits.
The guide considers how Brazil has dealt with the growing digitalisation of its economy, while looking deeper at how beneficial tax laws are helping fintechs disrupt traditional banks. In contrast, the gap between legislation and reality is also discussed, especially when taxing transactions involving digital goods and services.
Brazil's tax world is set to blossom in the 2020s. We hope that you enjoy hearing from the tax experts leading the progression in our first Brazil Special Focus.
Prin Shasiharan
Commercial editor
ITR
