Private Letter Rulings and Taxation of Cost-Sharing Agreements in Brazil
Cost-sharing agreements are not about service rendering. The former only purpose is to allocate costs to legal entities within a corporate group. There is no rendering of services within the corporate group. For this reason, the reimbursement of costs should not be taxable. In Brazil, cost-sharing agreements are not regulated by law, but interestingly, a growing number of private letter rulings shape how Brazilian taxation should apply.