We believe that Brazilian tax authorities are not entitled to tax transfers sent abroad as part of a cost-sharing agreement with non-resident companies, as these agreements are better known as “cost-sharing agreements” or “cost-sharing.” In Brazil, it can be said that reimbursements under cost-sharing agreements made by domestic companies are not taxed under the IRPJ/CSLL, PIS/COFINS and ISS, provided certain conditions are met and these expenses are deductible or tax credits are available. Revenue sharing takes many different forms, although each iteration involves the distribution of profits or operating losses among associated financial players. Sometimes revenue participation is used as an incentive program – a small entrepreneur can, for example, pay a percentage reward to partners or associates for pursuing new customers. At other times, revenue sharing is used to distribute profits from a business alliance. Private companies are not the only ones using revenue-sharing models; Both the U.S. government and the Canadian government have used the sharing of tax revenues between different levels of government. (ii) sales and sales contracts (there is no transfer of an asset or property with the payment of a price); Some types of revenue sharing are strictly regulated by public authorities. In 2007, the Advisory Council of the Workers` Income Security Act established the Working Group on Revenue Distribution Obligations and Practices to address perceived problems related to the practice of revenue allocation for Plans 401 (k). The working group found that revenue sharing was an acceptable practice and new transparency rules were implemented under the authority of the Ministry of Labour.
The working group also decided to take the lead in formally defining revenue sharing for defined contribution schemes. The December 2011 circular, which is also published with regard to the distribution of films, specifies that the nature of the agreement between the parties is not the determining factor in the applicability of the tax. While the circular correctly recognizes that compensation or payment agreements could exist on the basis of a fixed formula or incentive formula, an incentive formula or a hybrid version of the above model, the circular states that it is the nature of the transaction, not the type of agreement, that would determine the profitability of the services tax. It can therefore be concluded that federal revenues do not have a clear guideline against non-taxation of foreign transfers when it comes to a cost-sharing agreement. In this context.B. it is worth responding to the request for tax notice 21 – General Office for Tax Coordination in Brazil (COSIT) 2015, which distinguishes between the mere reimbursement and the actual provision of information services under an ancillary obligation called Siscoserv: it then informs that statements have been made and that, in certain situations, the film distributor and the theatre owner are jointly doing business in the form of a turnover agreement and therefore should not collect a tax on services.