Guide to m&a tax 2021

a. Use of Hybrid Entities and Instruments
There is no Brazilian legislation dealing with hybrid entities or consideration of hybrid instruments in post-acquisition integration.
b. Principal/Limited Risk Distribution or Similar Structures
There is no specific legislation for principal or limited risk distribution. See above the discussion regarding the Brazilian Transfer Pricing rules.
c. Intellectual Property
The Brazilian legislation does not provide specific rules on the licensing of intellectual property. However, there are specific local rules regarding the rights 
and obligations related to intellectual and industrial properties, as well as the requirement of proper documentation formalising the registry of intangible 
property with the Brazilian National Institute of Industry Property (INPI).
TAXAND GLOBAL GUIDE TO M&A TAX 2021
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BRAZIL

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The remittance of royalties to a beneficiary abroad is generally subject to WHT at the standard rate of 15% (25% for entities established in tax haven jurisdictions) and 
to the CIDE, at the rate of 10% (please refer to our detailed comments above regarding these taxes). IOF is also applied on the remittance of the royalty funds abroad.
Since the Brazilian Transfer Pricing rules do not follow the international standards adopted by OECD Guidelines, the remittance of royalties abroad is not subject to 
such rules, having a specific deductibility methodology for CIT purposes.
In this regard, if the royalties are considered as a necessary and ordinary expense for the Brazilian entity, they may be deducted for CIT purposes, subject to a limit 
varying from 1% up to 5% on net revenue (directly linked with the patent, technology or technical assistance), according to the royalties’ nature and the applicable 
legislation. Royalties exceeding these thresholds are not considered a deductible expense in the CIT calculation basis.