The Federal Administrative Council of Tax Appeals (Conselho Administrativo de Recursos Fiscais, CARF) decided on 14 March 2017 that taxation in Brazil of profits of indirect controlled foreign companies (CFCs) under CFC rules is not prevented by tax treaties.
Accordance with the reporting of administrative judge, a tax treaty does not allow taxation in Brazil of profits of CFCs situated in a treaty partner’s territory, but does not prevent taxation in Brazil of profits realized by a Brazilian company through those CFCs.
