On the basis of bilateral considerations related to nature and costs, it is therefore concluded that the contract is a service agreement. Production-sharing agreements were first used in Bolivia in the early 1950s, although their first implementation was similar to that of today in Indonesia in the 1960s. [1] Today, they are often used in the Middle East and Central Asia. In addition, Brazil`s Federal Revenue Service cites OECD cost guidelines for multinational companies and tax administrations 2017 to explain that the concept of mutual benefit is fundamental to the validity of a cost-sharing agreement. (i) technology transfer contracts (these contracts are often reimbursements for administrative expenses, not technical services); 1. Within 30 days of the date a cost-sharing agreement between it and its related parties is concluded or amended, a company submits a copy of the CSA agreement to the local relevant tax authorities and submits the People`s Republic of China`s annual transaction report as an appendix, while submitting the annual corporate tax return. On 2 October, the Brazilian Federal Financial Service reissued guidelines on the tax treatment of contracts between companies belonging to the same group of companies that deal with the distribution of functions and activities (cost-sharing agreements). On the other hand, with respect to cost-sharing agreements with foreign-based companies, the federal product has generally positioned itself using the transfer by IRFONTE (15%), pis/COFINS-Import (9.65%), CIDE (10%) Taxed. AND the ISS. Although decisions generally find that they have not found an effective distribution in some cases, this is a reason for the application of taxes. Conversely, the federal product recognized the deduction or the right of credit for these expenses and expenses. At the end of the first part of the analysis, the Brazilian Federal Revenue Service indicated that the contract presented could not be considered a cost-spending agreement between companies in the same group, since the foreign parent company does not expect mutual benefits with respect to the activities of its engineering department and that the contractual form used for compensation directly retaliates against the Brazilian company`s advantage. While cost-contribution schemes are perhaps the most attractive for the research and development of intangible real estate, CCAs should not limit themselves to such activities.

CCAs could be set up for any joint financing or distribution of costs and risks, for the development or acquisition of real estate, or for the purchase of services. There are cases where the cost-sharing agreement includes a central company headquartered abroad. This is a very common agreement, the first is the COSIT consultation solution 8/2012, under which a cost-sharing agreement has the following characteristics: this allows us to conclude that federal revenues are not in fact clearly unsubsed in terms of non-taxation of transfers abroad when it comes to a cost-sharing agreement. In this context. B, it is appropriate to take into account the response to the request for tax notice No. 21 – General Office for Tax Coordination in Brazil (COSIT) 2015, which distinguishes between simple reimbursement and the actual provision of services for information purposes, In addition, there is mention of COSIT 23/2013, which has a general binding effect within the Brazilian tax administration and deals with the deductibility of cost-sharing amounts and expenses between companies in the same group of companies established in Brazil and which relate to the deductibility of amounts declared in COSIT CS/COFINS.