Brazil Adopts Thin Capitalization Rules; Loans to Tax Havens Face More Restrictions

Brazil Dec. 16 introduced thin capitalization rules that restrict deductibility of related-party interest payments, and add extra restrictions when the payments are made to affiliates in low-tax jurisdictions. [Provisional Measure No. 472/09 (PM 472), 12/16/2009]

The cross-border provisions, effective Jan. 1, were part of a larger tax measure, Provisional Measure No. 472, that also included special incentive regimes for the oil and gas, aerospace, and technology business sectors, according to Simone Musa and Clarissa Machado of Baker & McKenzie in Sao Paulo. Enjoying this article? To continue reading you need to take out a FREE trial to the Transfer Pricing Library.




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