Interest charges for relatives and persons: no interest is charged on loans and advances granted to related companies. However, some companies choose to charge interest to their related businesses as an opportunity fee if the funds had been invested in other income-generating activities. Interest charges payable to a related company that is a non-resident foreign company are generally subject to the final tax of 20%, unless one of the companies requests tax relief from the BIR. This interest is deductible for income tax purposes, unless it falls under Section 36(B) of the 1997 Tax Code as amended. However, the Federal Office of Finance has published several responses stipulating that such transfers should be subject to taxes (Solução de Consulta Disit / SRRF09 No. 9026 of 29 August 2018). However, it seems to me that this interpretation is more related to the specific case, since it theoretically meets the requirements of an effective cost-sharing agreement. Ideally, the cost base should be determined on the basis of the actual costs associated with the provision of shared services. However, it can be difficult and time-consuming to determine the actual costs incurred. In this case, the estimated costs (a precise approach to actual costs) are acceptable. Estimated costs are predefined or standard costs for the provision of a service under normal conditions and are developed from historical data analysis.

The allocation of costs is essentially an accounting issue and, since the law does not explicitly impose rules applicable to each situation, the method of allocation chosen should, at best, be reasonable, reasonable and consistent. Therefore, an accounting policy that reflects the consistent application of generally accepted principles in a given industry or enterprise, consistent with recognized practices in that activity or activity, is considered an accurate picture of income. The growth of economic groups has led to a general increase in cooperation agreements. According to their modern definition, economic groups often operate through a number of companies in different sectors, both in the domestic market and in the international market. The advent of the new model led to the signing of agreements with the aim of centralizing a large number of non-essential joint business activities in a single company. Cost-sharing is done by a conglomerate to take advantage of the economies of scale inherent in the interaction between these companies. At the same time, it generally offers the tax advantage of being able to recognise a tax deduction for sums transferred by companies as its share of the costs incurred, for example, by the parent company. . .

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