Brazilian tax authorities ("RFB") clarified today
that, in relation to Austria, the inclusion in the so-called
"gray list" – i.e., list of beneficial tax regimes,
which implies in more severe rules of thin capitalization and
deduction of expenses, and application of transfer pricing rules
– will only apply to holding companies that do not perform
"substantial economic activity", as it occurs with
Denmark and the Netherlands.
Thus, Austrian companies that serve to hold participation in
other companies, but with substantial economic activity, will be
excluded from the Gray List.
Please note that, company with "substantial economic
activity" is defined by Sole Paragraph to Art. 2nd of
Normative Instruction no. 1,037/2010 as the one that has, "in
its country of domicile, operational capacity appropriate to its
means, evidenced, among other factors, by the existence of own
qualified employees and in sufficient number and adequate
facilities to performance of management
