BRASILIA Oct 18 Brazil's multinational
companies will have up to eight years to pay taxes on their
foreign profits, the country's top tax official said on Friday,
in a rule that will encourage the growth of their investments
Brazilian companies will be allowed to compensate profits
and losses between their foreign subsidiaries for four years,
Federal Revenue Secretary Carlos Alberto Barreto said.
Companies based in tax havens will not benefit from the new
rules, he told a press conference.
The companies affected are some of Brazil's biggest
including miner Vale SA, state oil company Petroleo
Brasileiro SA and steelmaker Gerdau SA.
The measure should give a boost to tax collection of several
billion reais at a time when the government is struggling to
meet its fiscal savings goal for 2013.
In a deal reached last week, the companies will be allowed
to pay back taxes on their foreign profits in installments,
which should help resolve a dispute over taxes owed on their
operations abroad, which Barreto estimated at between 70 billion
and 100 billion reais. ($32 billion - $46.25 billion)
Companies that pay up front will not be charged fines and
interest on the tax debts.
Barreto said the tax rate applied to foreign profits and
dividends will be maintained at 34 percent.
President Dilma Rousseff will enact the rules in a
provisional law that Congress will have 120 days to modify or
Brazil has one of the world's most complex taxation systems,
according to the World Bank, and companies frequently dispute
the government's accounting of what they owe.
($1 = 2.1623 reais)
(Reporting by Luciana Otoni; Writing by Anthony Boadle; Editing
by Leslie Gevirtz)