It can therefore be concluded that federal revenues do not have a clear guideline against non-taxation of foreign transfers when it comes to a cost-sharing agreement. In this context, it is worth answering, for example, the question of the tax rush No. 21 – General Office for Tax Coordination in Brazil (COSIT) 2015, which distinguishes between the mere reimbursement and the actual provision of information services under an ancillary obligation called Siscoserv: to take into account the impact of the purchase payment, let us change the previous example by assuming that the parent company and Sub would have been admitted on January 1, 2007, so that they were together for one year before establishing the cost-sharing agreement. Let us also assume that in 2007, the parent company spent $400 million on the development of intangible assets and that each of the parent company`s profits and the lower part of the parent company in 2007 was $30 million per year. Both companies will continue to share the costs of intangible assets developed after January 1, 2008, but in addition, the portion will be required to make a one-time payment to the parent company for the present value of the intangible asset prior to purchase.4 Based on the same data as before, this payment amounts to USD 300 million, cash value ($30 million/10%) intangible sub-assets before purchase. In summary, cost-sharing agreements have the potential to significantly reduce a taxpayer`s tax debt. Are there situations that reduce their desire? If the revenues from the evolution of intangible assets are uncertain – and the market value of intangible assets is less than their development costs – a cost-sharing agreement is not desired. Cost-sharing agreements may also be unattractive if most of a company`s intangible assets are developed by a subsidiary operating in a low-tax sector. In this case, the U.S. parent company would be required to make a subfund payment for the parent company`s share in the cost of intangible assets developed by underdevelopment. This is less desirable than the (generally higher) use of market-based transfer prices, because in this case, market-based transfer prices would have the advantage of transferring a higher share of the taxpayer`s world income to a lower tax sovereignty of the party than a cost-sharing agreement.
It is important to point out from this judgment that in the event of cost-sharing as a result of the central company`s commitment of a third-party service provider, such an assumption would not be an easy refund and would, as a service, lead to taxing transfers sent abroad. On the other hand, with respect to cost-sharing agreements with foreign-based companies, the federal product has generally positioned itself using the transfer by IRFONTE (15%), pis/COFINS-Import (9.65%), CIDE (10%) Taxed. AND the ISS. Although decisions generally find that they have not found an effective distribution in some cases, this is a reason for the application of taxes. Conversely, the federal product recognized the deduction or the right of credit for these expenses and expenses. (iii) service agreements (there is often compensation with a profit margin, while cost-sharing agreements are not entitled to profit, but only to reimbursement). Under the cost-sharing agreement, sub must pay $40 million to the parent, since the share of the patent benefits is 40% – 2/5 of the company`s total benefit over the patent and the total cost of the parent for the development of the patent was $100 million. In the absence of a cost-sharing agreement, the subcontractor would have had to pay the parent company $200 million in present value, i.e. the market value in present value ($20 million/$0.10) of the party`s future revenues generated by the patent.
A cost-sharing agreement is concluded when, with common interests, the costs of executing the assets and rights of one of the group`s entities – which it will make available to others