RFB’s Normative Instruction 1,674/2016 establishes a new option for legal entities headquartered in Brazil to have the profits accrued by their related companies abroad to be consolidated for the purposes of income tax and the social contribution over net assets.
This will allow companies to be taxed based on the actual profit method under accrual accounting principles (up until now companies were forced to account for their foreign profits under the cash method).
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Last modified: November 25, 2017