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4.4. PE Risk Grid for Foreign Entities Involved in Business Activities

The following grid depicts the potential PE risk under domestic law for foreign entities engaged in business activities. Note that the determination of the existence or not of a taxable presence in Brazil must be ascertained on a case by case basis, taking into account the facts and circumstances of each specific situation.

ACTIVITY                               POTENTIAL PE RISK
                                      High Moderate Remote
Market research (through a fixed place of business)                        
Solicitation (through a fixed place of business)             
Procurement (through a fixed place of business)                 
Provision of services                             
Secondment of personnel                    
Commissionaire and similar                      
Post-restructuring low-risk activity                       
Ownership, rental/operation of real estats                 
FORCE OF ATTRACTION                                            YES/NO
BRANCH PROFITS TAX                             YES/NO RATE/BASE