{"id":1,"date":"2018-11-23T15:44:33","date_gmt":"2018-11-23T17:44:33","guid":{"rendered":"https:\/\/192.168.0.103\/new-growing\/bluemind\/?p=1"},"modified":"2019-06-19T09:25:27","modified_gmt":"2019-06-19T12:25:27","slug":"precos-de-transferencia-no-brasil-e-a-declaracao-pais-a-pais","status":"publish","type":"post","link":"https:\/\/www.tpbluemind.com\/en\/precos-de-transferencia-no-brasil-e-a-declaracao-pais-a-pais\/","title":{"rendered":"Transfer Pricing in Brazil and the Country-by-Country Declaration"},"content":{"rendered":"

By Demetrio Barbosa<\/strong><\/p>\n

he Brazilian Federal Revenue Service (RFB) published RFB Normative Instruction 1681 (IN RFB 1681\/16) in the Federal Official Gazette on December 2, 2016, which deals with the obligation to provide Country by Country Declaration information. I had already covered the subject in an article on 29\/11\/2016, prompted by RFB Public Consultation 11\/2016, which resulted in the Normative Instruction in question.<\/p>\n

IN RFB 1681\/16 ratifies Brazil's commitment to BEPS[1]<\/a><\/u> and establishes that the Country-to-Country Declaration will be provided annually, in relation to the immediately preceding tax year, by completing the Tax Accounting Bookkeeping (ECF) and transmitting it to the Public Digital Bookkeeping System (Sped).<\/p>\n

The first Country-by-Country Declaration will be for the tax year starting in January 2016.<\/p>\n

The ultimate parent company of a multinational group will be responsible for submitting the Country-by-Country Declaration. It will be up to the Brazilian taxpayer to indicate to the RFB whether it is the ultimate parent company of the multinational group or a substitute entity. When the Brazilian company does not fit into one of the options, it must indicate the jurisdiction of residence for tax purposes of the reporting entity. It is clear that the RFB is concerned to know which country may request the Country-by-Country Declaration.<\/p>\n

The submission of the Country-by-Country Declaration for the member entities resident in Brazil is only mandatory when the total consolidated revenue of the multinational group in the fiscal year prior to the fiscal year of declaration exceeds R$ 2,260,000,000.00 (two billion, two hundred and sixty million reais), if the ultimate controller is resident in Brazil for tax purposes; or \u20ac 750,000,000.00 (seven hundred and fifty million euros), or the equivalent converted into the local currency of the jurisdiction for tax purposes of the ultimate controller in the previous year.<\/p>\n

The content of the Country-by-Country Declaration is similar to that suggested by BEPS:<\/p>\n

Information aggregated by jurisdiction in which the multinational group operates;<\/p>\n

The amounts of total revenues and those obtained from related and unrelated parties;<\/p>\n

Profit or loss before income tax;<\/p>\n

Income tax paid;<\/p>\n

Income tax due;<\/p>\n

Share capital;<\/p>\n

Retained earnings;<\/p>\n

Number of employees;<\/p>\n

Tangible assets other than cash and cash equivalents;<\/p>\n

Identification of each entity in the multinational group;<\/p>\n

Nature of its main economic activities.<\/p>\n

The value information contained in the Declaration must be provided in a single currency, to be chosen and indicated by the declaring entity and a single language to be chosen by the declaring entity from the options of Portuguese, English and Spanish.<\/p>\n

A company resident for tax purposes in Brazil, even if it is not the ultimate parent company of a multinational group, will be obliged to file the group's Country-by-Country Declaration in certain situations:<\/p>\n

When the ultimate controller of the multinational group to which it belongs is not obliged to deliver in its jurisdiction;<\/p>\n

When the jurisdiction of residence of the final controller has signed an international agreement with Brazil, but does not have an agreement of competent authorities with the country; or<\/p>\n

By systemic failure of the jurisdiction of residence of the ultimate controller of the multinational group that has been notified by the RFB to the integrated entity resident for tax purposes in Brazil.<\/p>\n

The Brazilian company will also not be obliged to submit the Country-by-Country Declaration to the RFB if the multinational group has made it available through a substitute entity that meets the following conditions:<\/p>\n

The content of the Country-by-Country Declaration submitted by the substitute is the same as that established by the RFB;<\/p>\n

The Country-by-Country Declaration must be submitted within 12 (twelve) months of the last day of the multinational group's fiscal year of declaration;<\/p>\n

The jurisdiction of residence of the surrogate entity has signed a competent authorities agreement with Brazil;<\/p>\n

The jurisdiction of residence of the substitute entity has not notified the RFB or been notified by it of the occurrence of a systemic failure;<\/p>\n

The substitute entity informs its jurisdiction that it is the reporting entity;<\/p>\n

The RFB has been informed of the existence and identification of the reporting entity.<\/p>\n

Out of obvious necessity, the legislator defined competent authority agreements and international agreements:<\/p>\n

Competent authority agreement: means an executive agreement in force between authorized representatives of two (2) or more jurisdictions that are signatories to an international agreement, which requires the automatic exchange of Country-to-Country Declarations between such jurisdictions;<\/p>\n

International agreement: refers to an agreement to which Brazil is a signatory that authorizes the exchange of tax information, including automatic exchange, between the country and another jurisdiction or jurisdictions:<\/p>\n

Multilateral Convention on Mutual Administrative Assistance in Tax Matters;<\/p>\n

Any bilateral or multilateral international tax convention or agreement that contains a specific clause for the exchange of tax information;<\/p>\n

An agreement to exchange tax information.<\/p>\n

When we consulted the RFB's website for a list of countries that have signed international information exchange agreements with Brazil, we found the OECD page listing the following countries:<\/p>\n

From 2017<\/u>: Anguilla, Argentina, Barbados, Belgium, Bermuda, British Virgin Islands, Bulgaria, Cayman Islands, Colombia, Croatia, Cura\u00e7ao, Cyprus, Czech Republic, Denmark, Estonia, Faroe Islands, Finland, France, Germany, Gibraltar, Greece, Greenland, Guernsey, Hungary, Iceland, India, Ireland, Isle of Man, Italy, Jersey, Korea, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Mexico, Montserrat, Netherlands, Niue, Norway, Poland, Portugal, Romania, San Marino, Seychelles, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Trinidad and Tobago, Turks and Caicos Islands, United Kingdom.<\/p>\n

As of 2018<\/u>: Albania, Andorra, Antigua and Barbuda, Aruba, Australia, Austria, The Bahamas, Bahrain, Belize, Brazil, Brunei Darussalam, Canada, Chile, China, Cook Islands, Costa Rica, Dominica, Ghana Grenada, Hong Kong (China), Indonesia, Israel, Japan, Kuwait, Lebanon, Marshall Islands, Macao(China), Malaysia, Mauritius, Monaco, Nauru, New Zealand, Panama, Qatar, Russia, Saint Kitts and Nevis, Samoa, Saint Lucia, Saint Vincent and the Grenadines, Saudi Arabia, Singapore, Sint MaartenSwitzerland, Turkey, United Arab Emirates, Uruguay, Vanuatu.<\/p>\n

It is interesting to note that the United States (US), one of Brazil's main trading partners, is not on the list above. For its part, in order to identify possible tax evasion, the US enacted the now well-known Foreign Account Tax Compliance Act (\"FATCA\") with the aim of combating tax evasion by US taxpayers who are not exempt from paying taxes on income or other gains obtained outside the US. Like the Country-by-Country Declaration, FATCA also depends on bilateral agreements between the US and other countries. In this context of market globalization, diverse possibilities for the flow of funds and the search for tax transparency between countries, motivated by FATCA, Brazil and the United States signed an agreement to share information on US residents with financial transactions in Brazil and on Brazilian individuals or companies that move funds in US banking entities.[2]<\/a><\/u>.<\/p>\n

It is also expected that Brazil and the US, either through a bilateral agreement or a multilateral agreement within the OECD, will come to an agreement to share information contained in the Country-by-Country Declaration. This expectation has generated a great deal of anticipation among American multinationals with operations in Brazil, since the absence of an agreement to share information would mean that the Brazilian entity would be obliged to prepare the multinational group's Country-by-Country Statement and report it to the Brazilian Federal Revenue Service.<\/p>\n

Notwithstanding the Country-by-Country Declaration, information on Brazilian companies' transfer pricing calculations continues to be required as part of the ECF. Among the most relevant information, I would like to highlight that the option for one of the methods provided for in the relevant legislation continues to be made in the ECF and cannot be changed once the tax procedure has begun, unless the method or one of its calculation criteria is disqualified by the tax authorities.<\/p>\n

[1]<\/a><\/u> BEPS is represented by a group of countries that includes the 34 members of the Organization for Economic Cooperation and Development - OECD, eight other G-20 member countries, represented by the economic ministers and central bank presidents of the 19 countries with the world's most developed economies, and Colombia and Latvia, which are due to join the OECD.<\/p>\n

[2]<\/a><\/u> Decree No. 8.506, of August 24, 2015, Agreement to Improve International Tax Compliance and Implement FATCA, signed in Brasilia on September 23, 2014.<\/p>","protected":false},"excerpt":{"rendered":"

Por Demetrio Barbosa A Receita Federal do Brasil (RFB) publicou no Di\u00e1rio Oficial da Uni\u00e3o de 2\/12\/2016 a Instru\u00e7\u00e3o Normativa RFB n\u00ba 1681 (IN RFB 1681\/16), que trata da obrigatoriedade da presta\u00e7\u00e3o das informa\u00e7\u00f5es da Declara\u00e7\u00e3o Pa\u00eds a Pa\u00eds. J\u00e1 havia abordado o tema em artigo de 29\/11\/2016, motivado pela Consulta P\u00fablica RFB 11\/2016, que […]<\/p>","protected":false},"author":1,"featured_media":130,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"_links":{"self":[{"href":"https:\/\/www.tpbluemind.com\/en\/wp-json\/wp\/v2\/posts\/1"}],"collection":[{"href":"https:\/\/www.tpbluemind.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tpbluemind.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tpbluemind.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tpbluemind.com\/en\/wp-json\/wp\/v2\/comments?post=1"}],"version-history":[{"count":5,"href":"https:\/\/www.tpbluemind.com\/en\/wp-json\/wp\/v2\/posts\/1\/revisions"}],"predecessor-version":[{"id":413,"href":"https:\/\/www.tpbluemind.com\/en\/wp-json\/wp\/v2\/posts\/1\/revisions\/413"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tpbluemind.com\/en\/wp-json\/wp\/v2\/media\/130"}],"wp:attachment":[{"href":"https:\/\/www.tpbluemind.com\/en\/wp-json\/wp\/v2\/media?parent=1"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tpbluemind.com\/en\/wp-json\/wp\/v2\/categories?post=1"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tpbluemind.com\/en\/wp-json\/wp\/v2\/tags?post=1"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}