Brazil: Holding company test
Brazil has placed Dutch holding companies back on its list of privileged tax regimes, as it has determined that such companies that do not have “substantial economic activity” will be subject to adverse Brazilian tax consequences. EY’s Global Tax Alert provides additional details:
Click to access 2015G_CM6098_BR%20places%20Dutch%20holding%20cos%20wout%20substantial%20eco%20activity%20back%20on%20PTR%20list.pdf
Best Practices: All multinationals should review not only Dutch holding companies, but all holding companies to test economic substance. Russia has enacted recent rules on beneficial ownership, also looking at economic substance to determine the availability of treaty benefits. Other countries are expected to be more active in this subjective determination, thus this will be a topic for disputes gong forward.