Brazil's Tax and Trade Policies under the Rousseff - Brazil-US ...

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Acquisition of Equity Interest• Acquisition of the share control or minoritary interest in a Brazilian company - basicdocuments: Confidentiality agreement Letter of intent or memorandum of understanding "Due diligence" contingencies and compensation (damages) Definitive Agreements: typically, the subscription or purchase agreements, and in case ofbuying less than 100%, shareholders' agreement. Regulatory approvals, when applicable (telecommunications, financial institutions, health, etc.) Previous communication to the competition authorities (Conselho Administrativo de DefesaEconomica - “CADE”) in case of the total revenues of the invested company is superior to R$ 30million or the total revenues of the investor company is superior to R$ 400 million
Brazilian Corporate TaxationTaxation on Profits: Corporate Income Tax (“IRPJ”) and Social Contribution on net Profits(“CSLL”)• Brazilian companies are subject to IRPJ, at the rate of 15% plus an additional rate of10% on any income exceeding R$ 240,000¹ on an annual basis or R$ 20,000 on amonthly basis, and CSLL, at the rate of 9%• Both IRPJ and CSLL are levied on the company’s profits, calculated in accordancewith: (i) the Real Profit Method (“RPM”) or (ii) the Presumed Profit Method (“PPM”)• The election of RPM or PPM is, as a rule, discretionary to the taxpayer. However,under Brazilian tax legislation, the RPM is mandatory for companies: (i) whose totalannual revenue in the prior year exceeded R$ 48,000,000, (ii) that generate income orgains abroad, (iii) which are financial institutions, (iv) which are factoring companies, or(v) which are entitled to specific tax incentives and exemptions• Please note that there is no specific rule for newly-incorporated companies in regard ofthe first requirement. In our understanding, once the requirements above are observed,the newly formed company may adopt whichever method that might bring tax efficiencyfor the business
Page 1: Brazil - U.S. Business CouncilBrazi
Page 6 and 7: Limitations to Foreign Investment
Page 8 and 9: Establishing a company in Brazil•
Page 12 and 13: Brazilian Corporate TaxationReal Pr
Page 14 and 15: Taxes on Company’s DistributionsD
Page 16 and 17: Other Brazilian Tax Considerations1
Page 18 and 19: Other TaxesOther Federal Taxes• I
Page 20 and 21: Tax Incentives• REIDI - Special R

Brazil's Tax and Trade Policies under the Rousseff - Brazil-US ...

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