【安永税务】巴西并购——税务尽职调查并非例行公事

Core Insights - Brazil, as the largest economy in Latin America, continues to attract strategic and financial investors due to its vast domestic market, rich natural resources, and strategic location in the Southern Hemisphere [1] - The country is undergoing significant tax reforms, including a comprehensive consumption tax reform that aligns with OECD standards, necessitating forward-looking financial and tax due diligence [1][3] Regulatory Environment - The merger and acquisition process in Brazil is more complex compared to jurisdictions like the US or Europe, requiring extensive documentation, additional regulatory approvals, and longer approval timelines [2] - Specific industries such as media, healthcare, and aviation have restrictions on foreign ownership or require special permits, impacting transaction structures and timelines [2] Tax Due Diligence - Tax due diligence (TDD) is critical in Brazil's evolving tax landscape, with three major structural reforms directly affecting valuation models and transaction agreements [3] - The transition from a fragmented VAT system to a dual VAT system (CBS/IBS) is set to begin in 2026, with significant implications for profit margins and working capital [3][10] Transfer Pricing and Global Minimum Tax - Starting January 1, 2024, Brazil will adopt OECD's arm's length principle for transfer pricing, expanding the scope to include services, intangible assets, and financial transactions [4] - The implementation of a qualified domestic minimum top-up tax (QDMTT) from January 1, 2025, will require companies with revenues exceeding €750 million to model effective tax rates and prepare compliance documentation [4] Employment Tax Risks - The Brazilian Supreme Court has paused litigation regarding the legality of hiring through personal service companies (PJs), which poses significant investment risks for industries reliant on contractors [8] - Potential liabilities related to employment taxes could arise if the court's final ruling is unfavorable, impacting cost structures and compliance obligations [8][15] Legal and Judicial Uncertainty - Court rulings can significantly affect tax treatment outcomes, necessitating careful evaluation of each tax dispute to determine refund eligibility and audit risks [7] - The dynamic nature of the CBS/IBS tax framework highlights the need for flexible pricing models and renegotiation clauses in sale and purchase agreements [7] Industry-Specific Considerations - In the consumer and retail sector, traditional pricing models based on ICMS-ST must be adjusted to comply with new CBS/IBS regulations [11] - The technology and digital industries must address historical risks and outdated contract structures while ensuring compliance with OECD transfer pricing rules [13] - The telecommunications sector will benefit from unified taxation rules under CBS/IBS, but transitional risks remain [14] Conclusion - Brazil's market presents attractive investment opportunities, but success hinges on the ability to navigate complex information and incorporate tax reforms, legal uncertainties, and employment tax risks into pricing considerations [17] - Effective tax due diligence is now a strategic tool that transforms complex situations into clear judgments, supporting decision-making processes [17]