Posted in Brazil Tax transfer pricing

Public Consultation RFB No. 011/2016 – BEPS’ Country-by-Country Report

By Alex Jorge, tax partner, and Marcelo Siqueira, senior tax associate, of Campos Mello Advogados in Brazil (in cooperation with DLA Piper)

On November 7, 2016, the Brazilian Federal Revenue (“RFB”) released the draft of a proposed Normative Rule (Public Consultation RFB No. 11/2016 – click here) regulating the implementation of Country-by-Country Report (“CbC Report”) in accordance with BEPS[1] Action 13 – Transfer Pricing Documentation and Country-by-Country Reporting (“Proposed Draft”).

RFB indicated that CbC Report is an important instrument to gather information from multinational groups (“MNG”)[2] in order to proceed with the analysis and identification of tax risks related to international taxation and as a statistical data-base, enabling the RFB to assess abusive structures. Continue Reading

Posted in Tax uruguay

Uruguay’s Territorial Tax System and Residency Rules − Planning Opportunities in the Era of Tax Amnesties

Guest Post: Jonás Bergstein and Guzmán Ramírez are partners in Bergstein Abogados, based in Montevideo, Uruguay

Recent voluntary-disclosure programs in Latin America (most notably in Argentina, Brazil, Chile, and Colombia) have cast light on Uruguay as a suitable jurisdiction for Latin America business persons seeking to establish tax residence.

Uruguay’s historical political stability, democratic traditions, low corruption levels, and independent judiciary all contribute to this increased interest. Also contributing to the boom in interest is Uruguay’s attractive tax system.

This note briefly discusses the characteristics Uruguay offers for personal income tax planning purposes, with a special emphasis on the standards which trigger tax residence in Uruguay. Continue Reading

Posted in Colombia Labor

Challenges for Labor Outsourcing in Colombia || DESAFÍOS Y RETOS PARA EL OUTSOURCING LABORAL

There has been a lot of speculation lately regarding potentially improper use of outsourcing companies in labor and employment issues. Media reports on the use of outsourcing by certain businesses have alleged that such improper use is a workaround to labor statutes.

Mucho se ha especulado últimamente respecto a la tercerización laboral a través de compañías de outsourcing, por cuanto indebidas prácticas del sector empresarial al momento de emplear esta figura, han generado una distorsión respecto a su correcta forma de utilización y han creado en el imaginario colectivo la sensación de que estos servicios son simplemente una forma de disfrazar prácticas de indebida intermediación laboral.

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Posted in Brazil Real Estate

Brazil: Supreme Court suspends acquisition of rural land in São Paulo by Brazilian companies controlled by foreign entities

The Brazilian Supreme Court recently suspended the permission granted by Normative Opinion No. 461/12E, issued by the General Internal Affairs of State of São Paulo (Corregedoria-Geral de Justiça de São Paulo) in December 2012, which had recently permitted the acquisition of rural properties in the State of São Paulo by Brazilian companies controlled by foreign entities. This Normative Opinion stated that article 1 §1° of Federal No. 5.709/1971 is contrary to the Constitution. As a result, companies controlled by foreign entities (either an individual or a corporation) should be allowed to purchase rural properties without special restrictions. Continue Reading

Posted in Brazil Intellectual Property IP

Changes on the analysis and recognition of so-called “highly renowned” trademarks in Brazil by the INPI || Alterações com relação à análise e reconhecimento das marcas de alto renome no Brasil pelo INPI

On October 18th, the National Industrial Property Institute (INPI) published Resolution INPI/PR 172/2016, to improve the analysis and recognition of so-called “highly renowned” trademarks in Brazil. The alterations brought by the new resolution were formulated based on the suggestions of associations involved in the industrial property area, such as the Working Group on Trademarks of the Brazilian Association of Industrial Property Agents (ABAPI).

O Instituto Nacional de Propriedade Industrial (INPI) publicou, no dia 18 de outubro, a Resolução INPI/PR No. 172/2016, objetivando aprimorar a forma de análise e reconhecimento das marcas de alto renome no Brasil. As alterações trazidas pela nova Resolução foram feitas com base nas sugestões trazidas por membros da área, como o Grupo de Trabalho de Marcas da Associação Brasileira dos Agentes da Propriedade Industrial (ABAPI).

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Posted in Arbitration

The ICC modifies its Note on the Conduct of Arbitration under the ICC Rules

The Secretariat of the International Court of Arbitration of the International Chambers of Commerce (ICC) periodically issues documents for the information of parties and arbitrators and to aid the conduct of the proceedings.  These documents include notes dealing with various aspects of practice and procedure.  One of the most widely referred practice notes is the Note to Parties and Arbitral Tribunals on the Conduct of the Arbitration under the ICC Rules of Arbitration.

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Posted in Incentives Mexico Tax

Mexican Government Proposes Tax Incentives on IT Services and R&D Activities for 2017

As part of the 2017 economic budget and proposed tax reform, the Mexican government intends to incentivize a couple of activities that may be intertwined: first, by allowing information technology (IT) services to qualify as an export subject to 0 percent value added tax (VAT), as opposed to the 16 percent general VAT rate; and second, by reintroducing a tax credit for research and development (R&D) activities carried out in the country.

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Posted in Brazil franchise

STJ Strikes Down Validity Of Arbitration Clause In Franchise Agreement Based On The Rules On Specific Acceptance In Adhesion Contracts

In a decision issued in September 2016, the Superior Tribunal of Justice (STJ) – the highest court for non-constitutional matters, with responsibility for harmonizing interpretation of federal laws by the state and regional federal courts of appeal – analyzed (among other matters) the validity of arbitration clauses in franchise agreements in Brazil, in Special Appeal no. 1.602.076-SP.

In the original suit, the franchisee sued to terminate the franchise agreement and to obtain refund of the payments made to the franchisor, plus application of a fine.

In its preliminary (procedural) arguments, the franchisor argued the incompetence of the judiciary to hear the case because of the arbitration clause included in the agreement. The lower court rejected this argument, and the franchisor submitted an interlocutory appeal to the state appellate court, which overturned that decision and held the arbitration clause to be valid, with consequent dismissal of the case without prejudice, due to absolute incompetence of the state courts.

The plaintiff/franchisee then filed a special appeal to the STJ, which decided the arbitration clause is null due to absence of the legal requirements for validity established in Article 4, § 2, of Law 9,307/1996 (Arbitration Law). That article establishes that arbitration clauses in adhesion contracts are only effective if the adherent takes the initiative to file for arbitration, or expressly consents to participate.

Although the majority doctrine from legal scholars and jurisprudence from the courts take the position that franchise agreements, by their nature, are not subject to the Consumer Defense Code (Law 8,078/990), which was corroborated in the decision in question, the appellate panel’s holding was based on subjection of franchise agreements to the Arbitration Law, because they are adhesion contracts. In other words, their texts are determined unilaterally by the franchisor, with no possibility of negotiation between the parties. In this respect, the decision followed the position that all adhesion contracts, even those that do not involve relations between consumers and suppliers, must observe the provision of the Arbitration Law, including franchise agreements, since the function of that article is to benefit the economically weaker party, to avoid imposition of arbitration as a mechanism to resolve disputes.

In her voting opinion, the reporting judge observed the priority of the arbitral tribunal to decide on its own competence, including the validity of the arbitration clause. However, she stressed that this rule has exceptions, to better fit situations in gray areas. Hence, the decision held that the courts can nullify arbitration clauses when this involves a perceived disadvantage for the weaker party to an adhesion contract.

The STJ’s decision is important by corroborating the position that franchise agreements under Brazilian law are not subject to the rules governing consumer relations, but are still considered to be adhesion contracts, and as such are subject to the limits of the Arbitration Law regarding validity of arbitration clauses.

For further information, contact the author:

Paula Mena Barreto
T: +55 21 3262 3028

Posted in free trade zone Tax tax exemptions uruguay


The following is a guest post from Bergstein Law in Uruguay

Free Trade Zones (“FTZs”) play a key role in the attraction of foreign investment to Uruguay.  It is estimated that over last decade total accumulated investments in the FTZs amounted to more than USD$5.7 billion, thus becoming one of the main drivers of the Uruguayan economy.

All sorts of activities can be conducted in the FTZs: manufacturing, trade, warehouse, logistics, and services and across all industry sectors of multinationals, including but not limited to soft beverages (PepsiCo), pulp-mills (UPM), asset-managers (Julius Baer), advisory services (the big four included), printing manufacturers (Lexmark), toy industry (Sony) and pharmaceuticals.

Free Trade Zones are specifically delimited areas of the Uruguayan territory in which operations of all types can be conducted at zero tax. FTZsare governed by a legal regime which has been in place for more than 25 years and serve as distribution, trading, logistics, financial and services hub in the region.  Continue Reading

Posted in Brazil

New Brazil’s ANVISA Rules Expand Facilities for Investors in Life Sciences

On August 25, 2016, Brazil’s National Health Surveillance Agency (“ANVISA”) granted a new resolution (“RDC”) to improve a bordering field of the product registration process.

This new procedure aims to address reported problems concerning red tape slow process of ownership transfer of registered products before Health Surveillance Agencies.

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