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Brazil: Updated MAP rules, guidelines

Brazil: Updated MAP rules, guidelines

Normative Instruction 1846/18 updates an earlier regulation (NI 1.669/16) and aligns Brazil’s mutual agreement procedure (MAP) rules with the OECD’s base erosion and profit shifting (BEPS) Action 14 recommendations.

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Brazil’s updated MAP rules reflect, among other items, that:

  • Taxpayers may request a MAP for taxes other than Brazilian income taxes—provided that these other taxes are covered under a non-discrimination clause that is part of an income tax treaty.
  • Taxpayers may apply for a MAP even in instances when there are ongoing judicial or administrative processes.

The Brazilian Federal Revenue (tax authority) also released MAP implementation guidelines (Portaria Cosit 12/2018) that describe what taxpayers need to observe in making a MAP request. For example:

  • Transfer pricing matters must be requested “bilaterally.”
  • MAP requests must be presented within the terms of the specific income tax treaty.

For purposes of requesting a MAP, there are 31 income tax treaties currently in force between Brazil and the following countries:

South Africa

Spain

Norway

Argentina

Philippines

Netherlands

Austria

Finland

Peru

Belgium

France

Portugal

Canada

Hungary

Sweden

Chile

India

Trinidad and Tobago

China

Israel

Turkey

South Korea

Italy

Ukraine

Denmark

Japan

Venezuela

Ecuador

Luxembourg

 

Slovakia / Czech Republic

Mexico

 



For more information, contact a tax professional with KPMG’s Global Transfer Pricing Services practice in Brazil:

Eliete Ribeiro | +55 (11) 3940-3288 | eribeiro@kpmg.com.br

Edson Costa | +55 (11) 3940-5313 | edsoncosta@kpmg.com.br

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