On the other hand, the Federal Office of Finance has generally taken a position on cost-sharing agreements concluded with companies established abroad by taxing the transfer via IRFONTE (15%), imports pis/COFINS (9.65%), cide (10%) and ISS. However, the decisions generally stipulate that, in some cases, they have not established an effective allocation, which explains the application of taxes. Conversely, the Federal Tax Office has recognised the deduction or entitlement to the credit in respect of such expenses and costs. If it is intended that the apportionment between the parties is only a compensation of costs, it is not possible to collect taxes such as: Finally, it is worth mentioning that cost-sharing agreements can give rise to additional disputes between a taxable person and the IRS. In the example above, there is a clear distinction between the profits made by the parent company and the subcontractor on intangible assets before the redemption and the profits generated by the parent company and the subcontractor on intangible capital expenditures after the cost-sharing agreement came into effect. In practice, the income from these temporal intangible assets is often not easy to distinguish. In this case, there are potentially difficult allocation problems, for example. B to determine the amount of the subcontractor`s post-buy-in profits attributable to the parent company`s pre-buy-in intangible assets. It`s a bit ironic: based on the conversations I`ve had with IRS staff, one of the reasons the Department of Finance rules were changed to include cost-sharing agreements, eliminating discrepancies between the IRS and taxpayers on what constitutes a reasonable assessment of the market value of license payments for transferred intangible assets. Although cost-sharing agreements create the elimination of many disputes with the tax administration over intangible assets developed after the agreements came into force, new disputes over the amount of redemptions are also ongoing. And since (1) buybacks are potentially very large – and are supposed to be based on the present value of all intangible assets before the buy-in and (2) force the taxpayer to answer potentially controversial questions about the share of a subcontractor`s post-buy-in profits resulting from intangible assets developed up to the buyback date, cost-sharing agreements have a source of disagreement about immaterial Assets are replaced by another source of disagreement on intangible assets.
In order to reduce the company`s administrative and other costs to support its executives and employees who are not associated with the service, the company intends to use offices in the offices of the service on its premises and certain administrative services provided by or on behalf of the service. The Parties wish to provide for a cost-sharing agreement for the use by the Service of certain overhead costs in the premises such as space, utilities and other administrative services. However, many managers may be less familiar with how they can sometimes reduce their tax bill by implementing a “cost-sharing agreement” between departments that deal with the internal transfer of intangible products or services. As the name suggests, a cost-sharing agreement between, for example, a U.S.-based parent division and a foreign-based subsidiary defines the apportionment between them of the costs of intangible assets developed by the parent company and the sub-company. . . .