Amendment Protocol To The Tax Treaty Between Brazil And Argentina. Publication In The Official Gazette

Author:Canosa Abogados
Profession:Canosa Abogados

On May 23, 2018, Law 27441 was published in the Official Gazette, thus approving the Amendment Protocol to the Treaty to Avoid Double Taxation and Prevent Tax Evasion between Brazil and Argentina (the "Protocol"). This Protocol has not been ratified yet by the Brazilian Congress.

The treaty executed in 1980, currently in force, establishes that dividends distributed by a Brazilian company to Argentine taxpayers as well as interests from Brazilian corporate bonds are exempted from the local Income Tax. The Protocol allows both Argentina and Brazil to levy a tax on both income, although it is subject to a cap on withholdings applied by the source country.

In this regard, the Protocol includes maximum withholding rates from 10 to 15% for payment of dividends, interests and royalties, as the case may be. In consequence, Argentina will no longer apply the local 35% rate for payment of interests or 31.5% for the payment of royalties and services to Brazilian taxpayers; while...

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