On June 18, 2014, Brazilian Tax Authorities enacted Normative Ruling No. 1,474, including certain Swiss companies incorporated as holding company, domiciliary company, auxiliary company, mixed company and administrative company as privileged tax regimes, when the corporate income tax collected by those entities is below 20%.

Companies that are treated as benefiting from privileged tax regimes are subject to Brazilian Transfer Pricing Rules and Thin Capitalization Rules (debt: equity ratio 0.3:1).

Such change eliminates the discussion on whether Switzerland would be maintained in the blacklist of tax haven countries. Up to this moment, the effects of such inclusion had been suspended by the Declaratory Act No. 11/2010, which was revoked by the Normative Ruling No. 1,474.

We remain at your entire disposal to provide any clarification that might be required.