When structured correctly, a CSA enables the reimbursement of administrative (back-office) expenses across group entities without the tax burdens typically associated with the cross-border “provision of services” (such as high withholding taxes and profit-margin markups).

The Strategic Value of a CSA

In the Brazilian tax landscape, the distinction between a Service Agreement and a Cost-Sharing Agreement is critical. A CSA is not a vehicle for profit; it is a mutual-benefit arrangement where costs and risks are distributed based on the actual or expected benefit to each participant.

Key Requirements for a Robust Structure

To ensure your structure is recognized by the Brazilian Tax Authorities (RFB), the following criteria must be meticulously met:

• Absence of Profit Margin: The essence of a CSA is “reimbursement.” Any markup or profit share will immediately recharacterize the agreement as a service provision, triggering different tax treatments.
• Common Interest & Collective Benefit: The activities must provide a mutual advantage to all participants. These must be middle/administrative activities (e.g., HR, IT, Accounting) and cannot be related to the core business activities of the companies.
• Objective Apportionment Criteria: Costs must be divided using indirect methods (e.g., headcount, login members, time sheet, net revenue and others, depending on each specific cost/expense).
• Actual & Necessary Expenses: All reimbursed amounts must be proven, necessary, and usual for the company’s operations.
• Independent Bookkeeping: Both the centralizing entity and the beneficiaries must maintain separate, detailed accounting records specifically for the apportionment.
• Formalization: Must be agreed upon in advance via a formal written contract, with an unlimited term (isolated or “one-off” services do not qualify).
• Transfer Pricing: Terms must mirror what independent parties would agree to under similar circumstances (“Arm’s Length” principle).
• Risk Allocation: The agreement must objectively indicate the division of both costs and inherent risks.
• Accounting: The centralizing entity must only record its specific portion of the cost/expense, treating the remainder as a recoverable credit/reimbursement.

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Smaller publicly held companies (with annual gross revenue of up to BRL 500 Mi) are exempt from the summary publication of minutes of meetings and financial statements in a printed newspaper.

On the other hand, CVM Resolution 168 regulates several matters:

• Prohibition of positions accumulation of (i) chairman of the board of directors and (ii) chief executive officer (not applicable to companies with annual gross revenue of up to R$500 Mi);
• Requirement of the presence of independent directors in publicly held companies that cumulatively (i) are registered in category A; (ii) have securities admitted to trading on the stock exchange by an organized market management entity; and (iii) have outstanding shares or share deposit certificates;
• The number of independent directors on the board of directors must correspond to at least 20% of the total number of directors;
• Definition of an independent director should consider: (i) his/her relationship with the company, company’s controlling shareholder and managers; and (ii) subsidiaries, affiliates or companies under common control, providing criteria for verifying such independence (they are not considered independent if: him/her is the controlling shareholder, has a vote bound by a shareholders’ agreement, is in any way related to the controlling shareholder, the company’s administrator or also the manager of the controlling shareholder, is or was an employee of the company or of the controlling shareholder or of affiliated/controlled companies or under common control, holds a position of decision-making power, is a founding partner or has significant influence over the company);
• The plural vote shall not apply to votes resolving about transactions with related parties whose value exceeds BRL 50Mi or 1% of the issuer’s total assets.

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In direct interviews, 83% stated that the office is a great place to work, far above the global average of 59% for other assessed companies.

“It is with great joy that we celebrate this achievement and recognize the need for constant evolution of our People Management practices for an even better workplace environment”, said partner Gustavo Viseu.

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The entire process is done through a payment link containing a QR Code of the wallet intended to receive the deposit. Foxbit Pay’s solution updates this wallet with the current value of the cryptocurrency every 30 minutes and, when the payment is made, the company receives the amount into its Foxbit account.

Viseu Advogados saw the need to have a service such as Foxbit Pay due to clients’ demand for this type of payment in bitcoin and other cryptocurrencies.

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