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Brazilian transfer pricing rules: Closer to OECD guidelines28.03.2023
Brazil is changing transfer pricing rules to allow for joining the OECD. The new rules foresee the adoption of methods and the definition of related parties to align Brazilian regulations with international standards. The proposed legislation must be approved and turned into federal law in 2023. In this event, the rules will be mandatory for companies in 2024, while they will be optional in 2023. The Ecovis consultants know the details.
At the end of 2022, the Brazilian Federal Government proposed modifications to transfer pricing rules. This aims to put an end to the unique Brazilian calculation methods and establish rules aligned with Organisation for Economic Co-operation and Development (OECD) guidelines. However, the primary goal is to create better conditions for foreign investments, mainly to fulfil a recent international treaty with the UK and to avoid double taxation with United States.
Brazilian transfer pricing rules
The proposed new rules are based on the arm’s length principle. The following is a brief overview of the calculation methods:
- Comparable uncontrolled price method: the average price of the same or similar goods or services in transactions between non-controlled parties
- Resale price minus: compare the gross margin of procurement operations between controlled parties with the resale price for third parties
- Cost plus: set a price by calculating the standard cost of the goods plus a standard profit margin (based on comparable transactions)
- Net margin: use the net profit of another controlled transaction to determine the net profit of the transaction in question
- Profit split method: consists of sharing the profit or losses obtained in the development of a product by the parties involved
The tax team will be happy to support you in implementing and complying with the new regulations.Mauricio Nucci, Partner Lawyer, Vaz de Almeida Advogados*, São Paulo, Brazil
Contrary to current regulations, the changes propose allowing companies to apply the “best method” principle if certain requirements are met. As a result, there is the possibility of applying other methods not mentioned here (nor mentioned by legislation) in line with international standards, as long the results are reasonable and consistent.
It is important to point out that taxpayers will be able to consult the tax authorities prior to calculation in order to avoid tax disputes. However, it is also important to mention that commodities and intangible transactions may be subject to a specific method, with the first based on international exchange values.
For further information please contact:
Mauricio Nucci, Partner Lawyer, Vaz de Almeida Advogados*, São Paulo, Brasil
*Vaz de Almeida Advogados in alliance with ECOVIS International for legal services in Brazil
ECOVIS STLex with ETS Global in European business development24.03.2023
Educational Testing Service (ETS) is a non-profit organization founded in 1947 in the United States.
In 2001, ETS set up its European headquarters in the Netherlands in order to promote ETS testing, build and strengthen relationships with education and assessment leaders in Europe, and offer customized assessments.
The mission of the group is to promote quality and equity in education.
ETS develops, administers, and evaluates more than 50 million tests a year-including TOEFL® and TOEIC® tests, GRE® General and Subject tests, and Praxis® tests-in more than 180 countries, in more than 9,000 locations worldwide and conducts educational research, analysis, and policy studies and develops a variety of customized services and products for teacher certification, English language learning, and elementary, secondary, and post-secondary education.
The group is pursuing its international growth and development plans with the aim of increasing its presence and markets in various European countries.
In 2022 ETS Global BV decided to develop the business in Italy.
ECOVIS STLex has developed specific experience in supporting international companies in their expansion and operational development on the Italian territory by providing customised solutions of integrated multi-professional consulting and services such as: tax, audit, legal, accounting, payroll, corporate in a one stop shop logic with a focus on customisation and attention to detail.
There was therefore a perfect match of client expectations in terms of extending the range of services and the precision and timeliness of the professional partner’s response. Therefore, as of 2022, the team coordinated by the partner Emilio Martinotti was able to support ETS in the study and implementation of the most effective and efficient legal, accounting, tax and labour solutions to strengthen ETS’s presence in the territory.
ECOVIS STLex team is very knowledgeable and, like us, embraces innovation and digitization of accounting administrative processes. We get along very well because they help us find effective solutions for our needs and for the development of our business in Italy.Roman Magdik (Executive Director Tax & Finance at ETS Global BV)
ETS Global, already a customer of ECOVIS in Italy and Poland, satisfied with the support received so far, is continuing to grow in EMEA region and has decided to engage the ECOVIS network for its expansion into Spain, Germany and Dubai.
Tax return in Honduras: Everything you need to know23.03.2023
In Honduras, tax filing is a mandatory process for all individuals and legal entities that generate income. In this article, we will explain everything you need to know to comply with this tax obligation.
Who is required to declare taxes in Honduras?
All individuals and legal entities that generate income in Honduras are required to declare taxes. This includes independent workers, businessmen, professionals, landlords, among others.
What taxes must be declared in Honduras?
The main taxes to be declared in Honduras are:
- Income Tax (ISR)
- Sales Tax (ISV)
When should tax returns be filed in Honduras?
The fiscal period in Honduras is from January 1 to December 31. The deadline to file the ISR tax declaration is April 30 of the year following the fiscal period, the ISV tax declaration is the 10th of the month following the completion of the sale.
How is the tax return filed in Honduras?
The tax declaration is filed online through the online portal of the Honduras Revenue Administration Service (SAR), or in preprinted format at the country’s bank windows.
What documents are needed to file the tax return in Honduras?
The documents needed to prepare and file the tax return in Honduras are:
- Statement of income
- Balance sheet
- Proof of expenses and invoices
What are the consequences of not filing the tax return in Honduras?
Failing to file the tax return in Honduras can have serious consequences. Sanctions include fines, interest and even legal proceedings.
How can we help you?
In our company, we offer advisory services and preparation of tax returns in Honduras. We make sure that our clients comply with their tax obligations in a timely and efficient manner, avoiding sanctions and legal problems.
In addition, we offer accounting and financial consulting services for companies and individuals in Honduras. Our team of highly trained professionals handles all financial aspects of your business, so you can focus on what you do best.
Tax declaration is a mandatory process in Honduras for all individuals and legal entities that generate income. At our company, we offer tax return preparation and advisory services to ensure that our clients comply with their tax obligations in a timely and efficient manner.
If you need help with your tax return or have questions about our services, don’t hesitate to contact us.
Tax and Legal Director
Tax and Legal Director