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6.5.11. Non-Deductible Expenses

The following expenses are not deductible:

  • Interest and other financial expenses owed to parent companies. This restriction does not apply to (i) debts owed by financial entities subject to the surveillance of the Financial Supervisor, and (ii) short-term debts for the import of raw materials and merchandise and when the taxpayer duly complies with the transfer pricing regime.
  • expenses related to tax-exempt income and revenues;
  • payments made to entities or individuals incorporated, located or operating in jurisdictions qualified as tax havens, unless they were subject to withholding tax. This rule is not applicable to transactions registered before the Central Bank.
  • capital losses stemming from disposal of assets between related parties; and
  • capital losses derived from disposal of shares or quotas.