We refer to the wrongful decision of the highest level of
Brazil's tax administrative court1 (CSRF,
Decision 9101-001.908 of May 13, 2014) against the deductibility
for income tax purposes (IRPJ)2 of any
royalties3 whatsoever (e.g. copyright royalties
regarding software, books, songs, movie, magazine and cartoon
characters) paid by a Brazilian company to its partners
(individuals or legal entities, foreigners or not, with any
shares), with the exception of royalties for patents and trademarks
(forgetting that know-how is also included) regarding agreements
signed from 1992 on with its foreign parent company. The case
refers to software royalties.
Nowadays intellectual property licensing agreements (e.g. patent,
trademark, know-how) – import of technology – are still
subject to strict regulations regarding necessary clauses of the
agreements and, specially, the amount to be paid/remitted/deducted
for tax purposes (limited to royalties of 5% instead of other
transfer
