Ratification update in Brazil | KPMG Global
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Brazil: Ratification update; income tax treaty with Russia

Ratification update in Brazil

An income tax treaty between Brazil and Russia has been ratified in Brazil when, on 1 August 2017, a presidential decree was published in the official gazette.


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The income tax treaty (signed in 2004) includes provisions regarding permanent establishments (PEs) that are a building site, construction, assembly or installation project or that concern connected supervisory activities—the PE status is determined with reference to a period of nine months. 

Withholding tax rates

  • The withholding tax rate for dividends under the treaty is: (1) a general rate of 15%; or (2) a rate of 10% if the beneficial owner holds directly 20% of the voting authority of the company paying the dividends. [Currently, Brazilian domestic legislation does not levy withholding tax on dividend remittance made abroad.]
  • The withholding tax rate on payments of interest is a maximum rate of 15% (with certain exemptions provided such as payments to governments). Brazilian interest on net equity is treated as interest, under the Protocol to the treaty.
  • The withholding tax rate on royalties is a maximum rate of 15% regarding payments for the use of, or the right to use, industrial, commercial or scientific equipment). The Protocol states that fees for technical services are to be treated as royalties.

Professional services article

The Brazil-Russia income tax treaty has a professional services article, focused mainly at independent activities of scientific, literary, artistic, educational as well as independent activities of doctors, lawyers, architects, dentists and accountants. The income of such individuals is to be taxed at their country of residence (with certain exceptions, such as payments made by residents of the other contracting state and/or PEs for activities are rendered in the other contracting state for a period of more than 183 days in a 12-month period).

Limitation of benefits

A provision does not allow treaty benefits to anyone or any transaction when the treaty would be used in an “abusive form.”


Read an August 2017 report (English) or (Portuguese) prepared by the KPMG member firm in Brazil

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