Tax Agreement Between Us And Brazil

Brazil has approved and implemented a Tax Information Exchange Agreement (TIEA) with the United States. The agreement provides that from 2014, the United States will have to exchange all the information listed. With regard to Brazil, the IGA stipulates that: (2) paragraph 1 of Article 28, where the competent authorities of the two contracting states agree to do so, they deny contractual benefits to a particular person or institution where, in the view of those authorities, the granting of contractual benefits would constitute an abuse of the purpose and purpose of the treaty. Contrary to the provisions of point 1, this refusal appears to require a formal prior agreement between the contracting states. Article 1 contains several definitions that must be used for the correct interpretation of the IGA. Among them, at the “dd” point, is the definition of “account holder.” For the purposes of the IGA, “account holder” means the person identified or identified as the holder of the financial account by the financial institution that manages the account. Given that the word “person” is used in the English version of the IGA, it is clear that the agreement applies to both individuals and corporations. Article 2, which explicitly states that information relating to legal entities is also exchanged between the relevant authorities, makes this clearer. Article 11.

For interpretation, international conventions and conventions to avoid double taxation are signed by the Government of the Federal Republic of Brazil. The inclusion of this proposal in Article 1 of the Treaty between Brazil and Mexico (possibly through a multilateral instrument) may affect WHT reductions, which may be partially denied if the person who ultimately receives the income is not Mexican or vice versa. Unlike most of Brazil`s tax treaties (which solve residency problems in favour of the place of effective management), Article 4, paragraph 3, of the Treaty between Brazil and Mexico already contains a provision in line with the OECD recommendation. For more comments on the application of the contract between Brazil and Mexico, please feel free to contact our company. The AIA is not expressly provided for in the TIEA, but as stated by the following IGA in 2015: “Article 1 of the TIEA allows the exchange of information between the two countries, including [AIA].” Article 1 of the TIEA refers to Article 10, which provides that the competent authorities put in place procedures to facilitate the implementation of the TIEA, “including forms for the exchange of additional information that promote the most efficient use of information.” There is a clear difference between the level of tax information to which the two competent authorities are entitled. In general, the U.S. government is asking the Brazilian government for a much more detailed information list than the other way around.