• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 10/29/2013

Brazil - Treatment of taxes on shared costs among taxpayers 

October 29:  Brazil’s tax authorities issued guidance concerning the treatment of social contributions (PIS and COFINS) relating to costs and expenses shared by members of taxpayer groups.

Divergência COSIT n° 23/2013 (14 October 2013) is intended to clarify the treatment and apportionment of PIS and COFINS with respect to shared costs and expenses among members of taxpayer groups. The guidance generally requires that taxpayers adequately document evidence of compliance with the apportionment requirements.


For economic groups, the treatment of shared costs and expenses—from both income tax and social contribution (PIS and COFINS) aspects—has been an area of dispute between taxpayers and the tax authorities. The issues have concerned, among other items, questions of deductibility.

Concerning costs and expenses incurred by economic groups, it has been a practice of the tax authorities to focus on one of the group companies and then to prorate and apportion the amounts among other companies that are members of the group.

With respect to PIS and COFINS, the tax authorities have integrated these social contribution amounts for purposes of cost-sharing revenue and expenses in the tax base calculation.

Read an October 2013 report (Portuguese) prepared by the KPMG member firm in Brazil: TaxNews: Tratamento tributário aplicável ao compartilhamento de custos e despesas

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