AmBev was assessed R $ 2 billion by the tax authorities


Folha de S.Paulo, 21/06/2005

A company controlled by AmBev, a brewing group that owns the Skol, Brahma and Antarctica brands, was the target of tax assessments by the Federal Revenue this year, which totaled R $ 2,016 billion.

The amount appears in the company's balance sheet completed in March 2005 and is classified as "possible contingencies" by the brewery. What the IRS alleges is that the company failed to pay IR on profits obtained abroad between 1999 and 2002 and was therefore assessed.

In the first quarter of this year, those assessments raised to just over R $ 3 billion the total amount related to the group's assessments of profits abroad in recent years. The company invoices R $ 12 billion per year.

There is an administrative proceeding at first instance in the Federal Revenue that deals with the case. If it loses, AmBev can appeal to the second instance and even the Judiciary, if necessary. The assessment involves profits obtained by two subsidiaries of a company called Eagle, controlled by AmBev.
The subsidiaries are Jalua, in Spain, and Monthiers, in Uruguay.
The IRS says that Eagle did not pay what it owed and its parent company, Ambev, defends itself. She claims that there is a treaty between Brazil and Spain that gives companies the right to pay the tax due in Spain.

AmBev not only disagrees with the amounts raised by the Revenue, but believes that the tax authorities “disregard the existence of a treaty to avoid double taxation, signed by Brazil with Spain”, he reports in the balance sheet.

From 1995 onwards, Brazilian legislation started to provide for the taxation of profits on a universal basis. Until then, territoriality was in force, whereby companies collected taxes only on profits obtained in Brazil.

"This is a tax issue that is repeated with many companies and the company is fully supported by the determinations of a [1976] treaty that prevails over [Brazilian] domestic law," said Leo Krakowiak, a lawyer for the company.

The group also reinforced, through its communication area, that the company's situation “has no relation to the recent cases that appeared in the press [read Schincariol] and that it acted with total transparency when reporting the case in its balance sheet. ”.

Soon after the publication of the balance sheet for the first quarter, the company went public to explain the matter to the market. The issue comes back to light after Schincariol, the second largest beer producer in the country, the subject of an investigation by the IRS, reported yesterday, in a note, that “other companies, including those in the same industry, have recently suffered serious tax assessments, without , however, had caused repercussions in the penal field ”.