Brazil’s tax authorities published guidance concerning the treatment of social contributions and it related to expenses and cost shared by the taxpayer groups, on 29 October 2013. It is intended to clarify the treatment and apportionment of PIS and COFINS regarding shared costs and expenses among the taxpayer. This guidance normally requires that taxpayers adequately document evidence of compliance with the apportionment requirements.
The treatment of shared costs and expenses for the economic groups has been an area of conflict between the tax authorities and taxpayers and the guidance have concerned, among other items, questions of deductibility. The purpose of the social contribution to coordinated the cost sharing revenue and expenses on the tax basis calculation.
