Company: PAX
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001628280-25-025640
Chunk: 91

Company: Patria Investments Ltd
Filing Date: 2025-05-15
Form: 20-F
Item: Item 3
Chunk 91
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 of Brazil, Chile and the other jurisdictions in which we operate. These tax rules are complex and subject to different interpretations by the taxpayer, relevant governmental taxing authorities and courts, leading to disputes which are sometimes subject to prolonged evaluation periods until a final resolution is reached. In making investment decisions or in establishing a provision for income tax expense and filing returns, we must make judgments and interpretations about the application of these inherently complex tax rules. If the judgment, estimates and assumptions we use in making our investment decisions or in preparing our tax returns are subsequently found to be incorrect, there could be a material adverse effect on us. The interpretations of Brazilian and Chilean taxing authorities and/courts and the other jurisdictions in which we operate are unpredictable and frequently involve disputes, which introduces further uncertainty and risk leading to increased tax burden.

Changes in taxes, including the corporate tax rate, in the countries in which we operate, may have an adverse effect on us and our portfolio companies.

Changes in tax laws, regulations, related interpretations, and tax accounting standards in the jurisdictions where we operate may result in a higher tax rate on our earnings, which could significantly reduce our profits and cash flows from operations.

The Chilean Government enacted various tax reforms in 2014, 2016 and 2020 in order to finance greater social expenditures. The most relevant change was the rise of the corporate tax rate to 27% in 2018. On October 24, 2024, the congress approved a new tax reform aimed at increasing tax revenues by 1.5% of GDP. This reform includes measures to strengthen the tax authorities’ powers to combat tax avoidance and evasion, such as changes to Chile’s GAAR provisions, corporate reorganizations, the statute of limitations, and audit powers and procedures. The government has announced that it will propose another tax reform in 2025 to finance social spending, which is expected to include a comprehensive reform of Chilean income taxes. We cannot predict at this time if these reforms or discussions will have a material impact on our business or portfolio companies or if further tax reforms will be implemented in the future. In addition, the effective corporate tax rate of our portfolio companies located in Chile could rise in the future, which may have an adverse impact on our results of operations.

In Brazil, Congress is advancing tax reform proposals, with the federal government signaling its intent to enact some of these changes soon. In December 2023, Constitutional Amendment No. 132/2023 was passed, initiating an overhaul of Brazil’s consumption tax system. This