Requirements for cost-sharing agreements

Private Ruling 8/2012 (Solução de Consulta COSIT 8/2012), issued by the Federal Revenue Office and published in the Official Gazette of 8 November 2012, provides the requirements for the deductibility of expenses paid by a resident entity to its foreign parent under a cost-sharing agreement. The private ruling also provides the main characteristics expected by the tax authority with respect to such agreements, and the transfer pricing implications.
Administrative expenses incurre…