Wednesday, September 10, 2025

N° 2 - Reflections by the Lagoons



The next day, Martín, Valentina, and Diego set out early from Putre again, determined to explore more of Lauca National Park. Their goal was to see the Cotacotani lagoons and later walk to the viewpoint over Lake Chungará.

As they drove higher into the altiplano, the air grew colder, but the sky was crystal clear. Snowy volcanoes appeared in the distance, including Parinacota and Pomerape. “It feels like we’re on top of the world,” Valentina said, watching the road wind up the plateau.

When they reached the Cotacotani lagoons, the view left them speechless. Dozens of small, dark-blue lakes stretched across the landscape, connected by narrow channels. Birds moved gently across the water.

“Look,” Diego pointed, “those must be Andean geese. And over there, flamingos!”

They sat on a rock to rest and noticed a small group of vicuñas grazing nearby. The animals seemed calm, but every few minutes they lifted their heads to check for danger. “They survive here with so little,” Martín whispered. “Just grass and cold wind. Imagine if we had to live like that.”

Valentina smiled. “That’s the lesson, isn’t it? Life adapts, even in the hardest places.”

After a while, they continued toward Lake Chungará. At 4,500 meters, it is one of the highest lakes in the world. The surface was smooth, and the snow of Parinacota Volcano reflected perfectly on the water. The silence was so complete that they could hear the distant call of a bird echoing across the lake.

A park ranger was standing near the viewpoint, watching through binoculars. The friends approached and greeted him.

“Any luck today?” asked Diego.

“Yes,” the ranger said. “I’ve seen giant coots and a couple of Andean foxes near the shore. You should stay quiet, and you might see them too.”

They followed his advice, and soon a fox appeared on the rocks, sniffing the ground. Its thick fur shone in the sunlight. “Incredible,” whispered Valentina.

The ranger added, “These animals are used to the cold, but they are not used to people. Visitors must be careful not to leave food or disturb them. If wildlife gets too close to humans, it can lose its natural instincts.”

That comment made the friends thoughtful. On the way back, Martín said, “It’s strange. We come here to admire the animals, but our presence could hurt them.”

“Exactly,” Valentina replied. “The park exists for them first. We are just guests.”

As the sun began to sink, the water of Chungará turned golden. The volcano’s shadow stretched across the lake. The friends sat together in silence, each reflecting on what they had seen.

Finally, Diego broke the silence: “I used to think national parks were just pretty places for tourists. Now I see they are also schools. They teach us how small we are, and how much we depend on nature.”

Martín nodded. “Maybe that’s why the rangers are so strict with rules. It’s not about control, it’s about respect.”

Valentina smiled softly. “And maybe we should take that respect back home with us, not just leave it here.”

When they drove away, the lights of the setting sun painted the altiplano in orange and purple. The volcanoes stood like guardians over the lagoons, and the friends carried new lessons with them — lessons of balance, silence, and gratitude.




Picture by maxstottrop from Cologne, Deutschland - Near Lago Chungará, Chile, CC BY-SA 2.0, https://commons.wikimedia.org/w/index.php?curid=74206296

N°1 - Hiking Around Acotango



The morning sun was bright, but the air was still cold when Martín, Valentina, and Diego left their small hostel in Putre. Their backpacks were light, but each carried water, coca tea leaves, and layers of clothing. They were going to spend the day on the trails near Acotango Volcano, inside Lauca National Park.

“Look at the volcano,” Valentina said as they drove along the dirt road. Its snow-covered summit rose into the deep blue sky, more than six thousand meters high. “I can’t believe people actually climb to the top.”

“We’re not going that far,” Diego laughed. “We’ll just walk the trails around the base. Even that will be high enough.”

When they parked near the trailhead, the silence of the altiplano surprised them. Only the sound of the wind, and the occasional call of a bird, broke the stillness. A small group of vicuñas ran across the plateau, their thin legs moving gracefully.

Martín checked the trail map. “This path goes to a small wetland. Let’s start there. We might see flamingos.”

As they walked, they felt the effects of the altitude. Every step was a little slower. “I’m used to hiking,” said Valentina, “but here it feels like my lungs are smaller.”

“That’s why people chew coca leaves,” Diego replied. “Locals are used to it, but for us it’s harder.”

The trail reached a lagoon where pink flamingos stood in the shallow water. The reflection of Acotango was clear on the surface. The friends stopped to rest and drink tea, amazed by the view.

On the way back, they decided to visit a small community nearby. The road passed through a cluster of adobe houses with brightly painted doors. A hand-painted sign read: Artesanía Local. Curious, they entered a little shop where a woman was selling woven blankets and small carved llamas.

“Buenos días,” she greeted them warmly. “Do you want to see alpaca wool products? Everything here is handmade.”

Valentina touched a soft scarf. “It’s beautiful. Did you make this?”

“Yes,” the woman smiled. “My family has worked with alpaca wool for generations.”

Martín asked, “Do many tourists come here?”

“Some,” she answered. “They can see the volcano, but they also learn about our traditions. For us, it is important that visitors respect the land. The volcano is not only a mountain; it is part of our culture.”

Later, they walked to a small marketplace, where stalls displayed potatoes, quinoa, and herbs. Diego bought roasted corn from an older man, who explained how families in the highlands farm at such altitudes.

“You must be strong and patient,” the farmer said. “The land gives food, but only if you take care of it.”

By the end of the day, the friends were tired but full of new impressions. As the sun set, Acotango’s snowy summit turned pink and orange.

“This was more than a hike,” said Martín quietly. “We didn’t just see nature. We also met people who live with the mountain every day.”

Valentina nodded. “That’s why I like traveling. You think you’re just going to walk a trail, but you end up learning stories you never imagined.”






Picture from: https://www.wikiexplora.com/Volc%C3%A1n_Acotango

Saturday, September 6, 2025

Mini-Unit: Mergers & Acquisitions in Brazil



Story: Beatriz Meets a Bigger Partner

After five years of success, Beatriz & Co. Consulting receives an offer. A larger international consulting group, GlobalSolutions Ltd., wants to acquire 60% of Beatriz’s company.

Beatriz is excited but also nervous. She meets Mr. Silva, her trusted accountant.

“Mr. Silva, I never thought about selling part of my company. What does it mean for taxes?”


Step 1: Due Diligence

Mr. Silva explains the first step: tax due diligence.

  • The buyer’s accountants will review all of Beatriz & Co.’s past tax payments.

  • They want to check if there are hidden liabilities: unpaid taxes, penalties, or mistakes.

  • If they find problems, it can reduce the value of the deal.

Beatriz sighs with relief:

“Good thing we always kept compliance strong.”

Step 2: Tax Credits and Carryforwards

Mr. Silva continues:

  • Companies sometimes accumulate tax credits (for example, unused ICMS credits).

  • In a merger, the buyer wants to know if these credits can be used in the future.

  • Some credits are transferable, others are not.

Beatriz writes in her notebook: “Credits = possible advantage, but rules are complex.”

Step 3: Withholding and Capital Gains

When GlobalSolutions buys 60% of her shares, Beatriz will personally receive money.

Mr. Silva explains:

  • This money is considered capital gains.

  • In Brazil, capital gains are taxed when an individual sells company shares.

  • The tax is withheld and paid to the government before Beatriz even receives the funds.

“So even my sale is taxed,” Beatriz says.
“Exactly,” Mr. Silva answers. “In M&A, taxes appear on both the company side and the shareholder side.”

Step 4: The Bigger Picture

Finally, Mr. Silva points out:

  • Large mergers may need approval from CADE (Brazil’s competition authority).

  • International mergers may also trigger withholding taxes on cross-border payments.

  • “It’s not just about buying and selling—it’s also about proving to the government that the deal is transparent and fair.”

Beatriz nods. “I see. A merger is not only about opportunity—it’s also about responsibility.”


Authentic Element: Legal Note

Beatriz reads a short excerpt from the draft acquisition contract:

“The Buyer shall withhold applicable taxes on capital gains arising from the transfer of shares, and the Seller shall provide all necessary documentation proving tax compliance for the previous five years.”

Beatriz underlines “withhold applicable taxes” and asks:

“So they take the tax before paying me?”
“Yes,” Mr. Silva says. “That’s withholding. It ensures the government gets its share.”


Glossary (Plain English → Portuguese + Term)

  • M&A – Mergers & Acquisitions (Fusões e Aquisições)

  • Due Diligence – Auditoria de Conformidade (review of records before a deal)

  • Tax Liability – Obrigação Tributária (unpaid taxes or debts)

  • Tax Credits – Créditos Tributários

  • Capital Gains – Ganho de Capital (profit from selling shares)

  • Withholding Tax – Imposto Retido na Fonte

  • CADE – Conselho Administrativo de Defesa Econômica (competition authority)


Discussion

  1. Why do you think tax due diligence is so important in mergers?

  2. What risks might a foreign company face when buying a Brazilian business?

Unit 4: Growth, Compliance & the Bigger Picture



Story: Beatriz & Co. Keeps Growing

Three years later, Beatriz & Co. Consulting is no longer a small firm. She now has a team of ten consultants, many clients across Brazil, and even some foreign partners. Her annual revenue is close to R$6 million.

One morning, Beatriz meets with Mr. Silva to discuss the future.

“Congratulations, Beatriz,” he says. “You are no longer a micro or small business. This means new challenges, especially in taxation.”

Beatriz takes a deep breath. “Tell me what I need to know.”


Moving Between Tax Regimes

Mr. Silva explains:

  • Since her revenue is now above R$4.8 million, she can no longer use Simples Nacional.

  • She must switch to Lucro Presumido. This regime is more complex, with separate calculations for IRPJ, CSLL, PIS, and COFINS.

Beatriz asks: “And what happens if we keep growing?”

Mr. Silva answers:

  • If her company ever reaches R$78 million per year, she will move to Lucro Real.

  • “In Lucro Real, taxes are based on your actual profit. It’s the most demanding regime, but also the only option for very large businesses.”

Beatriz writes in her notebook: “Growth = more opportunity + more responsibility.”


Compliance and Audits

Mr. Silva continues:

“As your company grows, the government pays more attention. You must keep all your accounts, invoices, and tax reports in perfect order. This is called compliance.”

Beatriz nods. “What happens if I make a mistake?”

“Penalties,” Mr. Silva says seriously. “Fines, interest, even legal problems. That’s why many big companies hire tax specialists and auditors.”


The International Dimension

Beatriz recently signed a contract with a client from Portugal. Payments now arrive from abroad.

Mr. Silva explains that cross-border business means new rules:

  • Withholding Taxes: Part of the payment from abroad may be withheld for taxes.

  • Double Taxation Treaties: Brazil has agreements with some countries to avoid taxing the same income twice.

But there’s more. Mr. Silva shares news from the OECD (Organization for Economic Cooperation and Development):

“Many countries, including Brazil, are discussing a minimum effective tax rate for large multinational groups. The idea is that even if companies move profits abroad, they must pay at least a certain percentage in taxes.”

Beatriz is fascinated. “So even if my company opens a branch in another country, Brazil will still make sure I pay fair taxes?”
“Exactly,” Mr. Silva replies.


Authentic Element: News Article Extract

Beatriz reads a short news piece:

“From 2024, Brazil will adopt new international tax rules in line with the OECD. Multinational enterprises must respect a minimum effective tax rate of 15%. The measure aims to prevent tax avoidance and ensure fair competition.”

Beatriz underlines “minimum effective tax rate” and smiles.

“Mr. Silva, maybe one day this will apply to me!”
“Who knows, Beatriz,” he laughs. “You are growing fast.”


Glossary (Plain English → Portuguese + Acronym)

  • Compliance – Conformidade (following all legal and tax rules)

  • Audit – Auditoria (official inspection of accounts)

  • Withholding Tax – Imposto Retido na Fonte

  • Double Taxation Treaty – Tratado para Evitar Bitributação

  • OECD – Organização para a Cooperação e Desenvolvimento Econômico

  • Minimum Effective Tax Rate – Alíquota Efetiva Mínima


Discussion

  1. Imagine Beatriz & Co. opens a branch in Europe. How might the minimum effective tax rate affect her company?