Brazil: Tax Treaty Series: The Bilateral Income Tax Treaty Between Brazil And The Netherlands

This is the second of our series of posts on Brazilian tax treaties. In each post we provide an overview of a specific tax treaty between Brazil and a particular foreign country, as well as comments on any Brazilian administrative or judicial precedents applying the treaty, and highlights on the impact of the OECD Base Erosion and Profit Shifting ("BEPS") project in its application.

Overview of the Treaty

Decree 355, published on December 03, 1991, contains the text of the Bilateral Income Tax Treaty signed by Brazil and the Netherlands ("Treaty"). This Treaty is aimed at preventing double imposition and double non-imposition of income taxes in cross-border operations between the two countries.

For Brazilian purposes, as of December 09, 2015, the treaty applies not only to the Individual and Corporate Income Taxes ("IRPF" and "IRPJ") and to the Withholding Income Tax ("WHT"), but also to the Social Contribution on Net Profits ("CSLL").

With regard to CSLL, this tax is not expressly mentioned in the Treaty, because it was created after its signature, and as a partial replacement of IRPJ. However, recent Law 13,202/2015 clarifies that Bilateral Income Tax Treaties signed by Brazil include CSLL:

Art. 11. For purposes of interpretation, the international agreements and conventions signed by the Government of the Federative Republic of Brazil to avoid double taxation include CSLL.

(...)

Please note that our reference to the Withholding Income Tax ("WHT") in the next paragraphs does not describe the entire tax burden imposed on certain income streams, such as royalties, for example. Other taxes may be imposed on cross-border royalty payments (such as the Special Tax on Royalties ("CIDE"), the Municipal Tax on Services ("ISS") and the Tax on Foreign Exchange Transactions ("IOF-FX")), but because these taxes do not qualify as "income taxes", they are outside of the scope of the Treaty.

It is also important to highlight that although the Netherlands are one of our Treaty partners, they are also included in our list of favorable fiscal regimes ("graylist"). Specifically, Brazilian authorities consider that the Dutch regime "applicable to legal entities incorporated as holding companies that do not perform substantial economic activities" is a graylisted regime.1 In this section, we will address the interplay between the terms of the treaty and the potential qualification of the Dutch beneficiary as a graylisted company.

The Treaty was generally based on the OECD Draft Convention available at the time (1977, with amendments), as well as on Brazilian tax treaty practice prior to 2000. Key aspects of this Treaty from a Brazilian perspective are:

  • Source Taxation

Dividends, interest and royalties earned are generally subject to WHT in Brazil, and may either be exempt from taxation or subject to a WHT credit in the Netherlands. Specifically:

  • For dividends received by a beneficial owner resident in a Contracting State, the maximum WHT is 15%. A tax sparing credit may be available for the Dutch recipient (see below).

For dividends received by a beneficial owner who has a permanent establishment in the source country, if the receipt of these dividends is related to the activities of this permanent establishment, the remittance is exempt from WHT. Please note:

If the recipient is resident in the Netherlands, these dividends may be exempt in the Netherlands. 

If the recipient is resident in Brazil, these dividends will be subject to a WHT credit, which may be used to offset applicable Corporate Income Tax ("IRPJ") and Social Contribution on Net Profits ("CSLL").

Under current Brazilian Law, dividends paid to Brazilian or foreign recipients are exempt from WHT.2

  • For interest received by a beneficial owner resident in a Contracting State, the maximum WHT is 10%, if the recipient is a bank and if the loan is granted for a minimum term of 07 (seven) years, related with the purchase of industrial equipment, or with the study, acquisition or installation of industrial or scientific units, or with the financing of public works. In all other cases, safe for the exception below, the maximum WHT is 15%.

These two types of remittances may be subject to a tax sparing credit for the Dutch recipient (see below).

For interest received by a beneficial owner who has a permanent establishment in the source country, if the receipt of the interest is related to the activities of this permanent establishment, the remittance is exempt from WHT. Please note:

If the recipient is resident in the Netherlands, the interest may be exempt in the Netherlands.

If the recipient is resident in Brazil, the interest will be subject to a WHT credit, which may be used to offset applicable IRPJ and CSLL.

Under current Brazilian Law, interest paid to foreign recipients is subject to a WHT of 15%.3

  • For royalties derived from trademark use, the maximum WHT rate is 25%. In all other cases (including payments for technical services and technical assistance), safe for the exception below, the maximum WHT rate is 15%.

These two types of remittances may be subject to a tax sparing credit for the Dutch recipient (see below).

For royalties received by a beneficial owner who has a permanent establishment in the source country, if the receipt of the interest is related to the activities of this permanent establishment, the remittance is exempt from WHT. Please note:

If the recipient is resident in the Netherlands, royalties may be exempt in the Netherlands.

If the recipient is resident in Brazil, royalties will be subject to a WHT credit, which may be used to offset applicable IRPJ and CSLL.

Under current Brazilian Law, royalties paid to foreign recipients (including payments for technical services and technical assistance) are subject to a WHT of 15%.4

  • Capital gains, differently from the OECD Model Convention, are taxable in both Contracting States, and there is no WHT limitation in the Treaty. The only exception is Article 13, paragraph 2, which determines that gains obtained from alienation of ships and aircrafts are taxable only in the country where the headquarters of the company are located.

Under current Brazilian Law, capital gains obtained by foreign residents (not located in a tax haven) are subject to a WHT of 15%.5 Source taxation is applicable even in case of non-resident seller and buyer – in this case, the buyer is required to withhold the corresponding amount, nominate an attorney-in-fact in Brazil and cause this attorney-in-fact to collect the WHT due.

There is intention to increase the WHT from 15% to 22.5% according to the most recent version of the law project proposed by the Government to the Brazilian Congress. This bill, if approved, will be enforceable as of the following calendar year.

  • Beneficial Ownership

Though the expression "beneficial owner" is mentioned in Articles 10, 11 and 12 of the Treaty, the Treaty does not define what "beneficial ownership" means (only in recent treaties has Brazil acquiesced to a specific Limitation on Benefits clause, and only in broad terms).

Brazilian tax authorities view the absence of a treaty definition of "beneficial ownership", as is the case with the Treaty between Brazil and the Netherlands, as a permission for tax authorities of the State applying the treaty to interpret the expression as they see fit. This position is supported by Article 3rd, paragraph 2, of the Treaty, which states:

Article 3rd, Paragraph 2: For the application of this Treaty by a Contracting State, any term not defined herein shall, unless the context otherwise requires, have the meaning that it has at that time under the law of that State for the purposes of the taxes to which the Convention applies.

  • Tax sparing

The Treaty contains a tax sparing clause, which is a treaty provision that requires the Netherlands to grant tax credits at a deemed WHT rate for specific payments made by Brazilian residents (not by Dutch residents to Brazilian recipients, even though this reciprocal provision does exist in other treaties signed by Brazil, such as the one with Ecuador).

The tax sparing credit is usually greater to the WHT rate applicable under the treaty or domestic law. In the Treaty with the Netherlands, they are:

  • For dividends not subject to an exemption, a tax sparing credit of 25%, if they are paid to a Dutch company that holds at least 10% of the voting shares of the Brazilian payor. In all other cases not subject to an exemption, the credit drops to 20%.
  • For interest not subject to an exemption, a tax sparing credit of 20%.
  • For royalties not subject to an exemption, a tax sparing credit of 25%, if they are paid to a Dutch company that holds, either directly or indirectly, at least 50% of the voting shares of the Brazilian payor, as long as these royalties are not deductible for the payor. In all other cases not subject to an exemption, the credit drops to 20%.
  • Income derived from technical assistance and technical services

In accordance with Item 5 of the Protocol of the Treaty, income derived from technical assistance and technical services is regarded as royalties (Article 12) for Treaty purposes.

This classification is important because Brazilian taxpayers have challenged the imposition of WHT on payments for services to recipients resident in Treaty countries (at the time, Germany and Canada), claiming that the business profits provision of the corresponding agreements (Article 7th) would prohibit taxation at source. The landmark case on this subject, REsp 1161467/RS, was decided in 2012 by the Second Chamber of the Superior Court of Justice ("STJ"), and it was favorable to taxpayers.

Nonetheless, Interpretative Declaratory Act 05, issued on June 16, 2014, by the Federal Revenue Secretariat of Brazil ("RFB"), states that if "income derived from technical assistance and technical services" is regarded as royalties in any particular Treaty, its treatment shall be the one attributed to royalties (Article 12), and not to business profits (Article 7th). Besides, RFB has adopted a very broad concept of "technical services", considering as such any services in which the provider needs "skills, technique and training".

The issue of whether RFB exceeded the limits of its interpretive authority by issuing an Interpretive Declaratory Act that effectively restricted the scope of a court decision by STJ (albeit a non-binding one) is yet to be resolved.

In the meantime, strict compliance with treaty provisions and domestic law would indicate that "income derived from technical assistance and technical services" should be subject to a WHT of 15%, the domestic WHT rate applicable to payments of royalties and technical services.

  • Interplay between the Treaty and the Dutch graylisted regime

The relationship between Brazilian persons and graylisted entities is subject to several tax restrictions under domestic law. Transactions before graylisted entities are automatically subject to transfer pricing rules (irrespective of whether the foreign entity is actually related to its Brazilian counterpart). Thin capitalization limits are decreased from a 2:1 to a 0.3:1 debt/equity ratio. Also, specific Controlled and Affiliated Foreign Company Rules ("CFC") prevent cross-company consolidation and deferred taxation.

Another tax implication of negotiating with a graylisted company is that expenses incurred with such company are only deductible if it is demonstrated (a) who the beneficial owner is; (b) the economical substance and operational capacity of the graylisted company; and (c) price payment and actual delivery of goods or services rendering.6

In general, graylisted entities are not subject to increased levels of WHT in Brazil (this increased tax burden is applicable to tax havens, popularly known as our "blacklist"). The exception to this rule are payments for a list of specific services – their remuneration, if paid to a non-graylisted (and non-blacklisted) entity, is subject to a WHT of zero. However, if paid to a graylisted entity, the rate is increased to 15%:7

  • Services of assessment of compliance, metrology and normalization.
  • Services of sanitary and phytosanitary inspection.
  • Services of homologation and registration.
  • Other procedures required by the Importing Country, under the scope of the agreements dealing with sanitary and phytosanitary measures ("SPS"), and with technical barriers to trade ("TBT"), both as provided by the World Trade Organization ("WTO").

The services in this list are decidedly technical services under Brazilian Law, because the same legal provision used to reduce WHT to zero for non-graylisted (and non-blacklisted) entities also reduces CIDE to zero, and this tax is only applicable to technical services. The question in this case would be: could the Treaty be used to prevent Brazil from imposing WHT on payments to Dutch graylisted entities?

Since the payments remunerate technical services, RFB would claim that these are qualified as "royalties" pursuant to Interpretive Declaratory Act RFB 05/2014, and therefore may be taxed in Brazil. Future court cases in STJ and the Federal Supreme Court ("STF") will assess whether Article 7th of the Treaty would apply in this case, to prevent WHT at source, irrespective of the qualification of payments for technical services as royalties in Item 5 of the Protocol.

With regards to which Dutch entities are included in the graylist, Normative Instruction RFB 1,037/2010 determines the inclusion into the graylist of the legal entities incorporated under the form of holding companies that do not exercise substantive economic activity. Even though we are aware that in the Netherlands there is not a specific type of legal entity called "holding company", the rule may be interpreted as any legal entity that "serves as holding company".

Another point to be observed in this rule is whether the entity is a "legal entity" – i.e. has legal personality or not. The rule refers specifically to legal entities, which could lead one to defend that unincorporated entities, without legal personality, would not be under the scope of the graylist. However, as the Brazilian tax authorities are progressively adopting substance over form and business purposes analysis approaches, there is a risk of this characterization being challenged by such authorities.

Still as part of the definition of entities subject to graylist inclusion, we have "substantive economic activity", which has no specific definition in either the law or the regulations, leaving space for the tax authorities to interpret as they think fit.

The other matter that worth reflecting about is in what extent this could be considered a treaty override, since the Treaty does not provide for any differentiation between companies that serve as holdings and other companies. By adopting the graylist for certain Dutch entities, seems to us that Brazil could be disrespecting Article 24 (Non-discrimination), whose application is even broader than the rest of the Treaty: it applies to nationals of both countries, regardless the actual tax residence.

  • Interaction with Brazilian CFC rules

In 2013, a binding decision issued by STF in ADI 2588/DF defined that Brazilian CFC rules could apply to controlled foreign companies in blacklisted jurisdictions ("tax havens") and could not apply to affiliated foreign companies out of blacklisted jurisdictions.

Among the questions not answered by STF in the 2013 decision is whether controlled foreign companies in Treaty countries would be exempt from CFC rules. Decisions issued by STJ and by the Administrative Court of Tax Appeals ("CARF") have already dealt with this subject, mostly in favor of the taxpayers, but STF is yet to confirm that position from a constitutional perspective.

While STF does not issue a final ruling on this subject, Brazilian tax authorities rely on references in the text of treaties (or the absence thereof) to impose CFC rules. Though there are treaties that either exempt undistributed profits (such as our Treaty with Denmark) or dividends (such as our Treaty with Spain), this particular Treaty is not a member of that group. Safe for a systematic interpretation of Article 7th, there is no provision in the text of the Treaty between Brazil and the Netherlands that would specifically prevent the application of Brazilian CFC rules.

Administrative and judicial case law

There are a few important administrative precedents applying the Treaty (to date, STJ and STF have not issued decisions on the terms of the Treaty with the Netherlands). Please find a detailed list of these rulings below:

CARF has so far issued four decisions that apply the STF ruling on Brazilian CFC rules (ADI 2588/DF). Their approach to the Treaty varies depending on factual elements of each case.

In Ruling 1402-001.733, the Brazilian entity had an affiliate in the Netherlands (with a participation of 21.20% in 2005 and 20.13% in 2006), and the tax authorities assessed both IRPJ and CSLL on profits earned, but not distributed, by the Dutch company. By the time the case got to CARF, STF had already declared that taxing profits of affiliated companies outside of tax havens is unconstitutional, and therefore the tax assessment was cancelled. In this particular ruling, CARF did not base its position on Article 7th of the Treaty, because the decision of STF is not based on any Treaty, but on a constitutional analysis of the concept of "income" for Brazilian tax purposes.8

In Ruling 1302-001.629, the issue was whether the profits of foreign entities in the Netherlands and the Cayman Islands could be deemed as taxable profits of their controlling entity in Brazil. The taxpayer lost in both fronts, but with regard to the profits of the Dutch CFC, the Third Chamber of the First Section of CARF took the peculiar position that (i) Article 7th of the Treaty does not apply to profits earned by CFCs in any jurisdiction, but only in Brazil, and that (ii) the profits of the Dutch CFC are not equivalent to the revenue derived from the stock ownership of its Brazilian controller.9 Though tax authorities argued that the OECD Commentary explains that Article 7th of the Model Convention and CFC rules are not incompatible,10 CARF itself did not use this argument to uphold the tax assessment.

In Ruling 1302-001.630, the same issue was presented to the Third Chamber of the First Section of CARF (application of CFC rules to the profits of a controlled entity in the Netherlands), and the taxpayer lost once more. This time, however, the argument used by the court to uphold the tax assessment was the equality in tax treatment between CFC profits (fictitiously made available to the Brazilian controller) and dividends (subject to taxation at residence under Article 10). Again, CARF could have used the OECD Commentary to support its position, but the court failed to do so.11

In Ruling 1103-001.122, the Brazilian entity controlled two Dutch companies and had one affiliate in Argentina. With regard to the Dutch CFCs, the First Chamber of the First Section of CARF cancelled the tax assessment in the part corresponding to IRPJ (the court decided that CSLL was not within the scope of the Treaty). The court based its decision on two key arguments: (i) there are Brazilian tax treaties (with Mexico and Peru) that specifically allow the imposition of CFC rules, and the Treaty does not have a clause with that particular text; and (ii) to allow the imposition of Brazilian income taxes on profits earned by a Dutch entity without any nexus to Brazil would be contrary to the meaning and purpose of Article 7th of the Treaty.12

So far, different Chambers of the First Section have interpreted the STF decision in ADI 2588/DF and the Treaty in different ways, sometimes bending the terminology of Article 7th (as seen in Ruling 1302-001.629), or equating CFC profits to dividends (as seen in Ruling 1302-001.630), and other times denying the imposition of CFC rules due to an interpretation of the main purpose of the Treaty (as seen in Ruling 1103-001.122). At this point, taxpayers are still waiting for a binding decision of the Superior Chamber of CARF ("CSRF") on this matter.

BEPS highlights

Both the Netherlands and Brazil (respectively a member and an associate country of the OECD) have actively participated in the drafting of the final reports for the 15 Actions of the Base Erosion and Profit Shifting ("BEPS") project. The two countries have distinct tax systems and tax treaty networks, but the OECD expects that both of them, as well as the entire G20 community, are able to implement BEPS proposals in a consistent and seamless manner.

Among the BEPS aspects associated with the application of the Treaty between Brazil and the Netherlands, we would like to highlight the following:

  • Hybrid Mismatches (Action 2)

The OECD proposals on treaty issues associated with hybrid mismatches are mainly focused on two separate areas: (i) treaty residence of dual-resident entities; and (ii) a clarification of the entitlement to benefits of transparent entities.

According to the OECD,13 tax authorities should be able to decide, on a case-by-case basis, the State of residence of so-called dual-resident entities (entities that either by virtue of treaty provisions, domestic law, or a combination of both, are regarded as resident in two separate jurisdictions). If tax authorities are not able to reach an agreement, the taxpayer would not be entitled to any treaty benefit (except for the ones agreed upon by competent authorities of both States).

In the Treaty between Brazil and the Netherlands, the clause that would have to be modified (or overridden) for this proposal to become effective is Article 4th, paragraph 3, which currently establishes that dual-residency issues will be resolved in favor of the State in which the legal entity has its place of effective management.

Also, according to the OECD,14 "income derived by or through an entity or arrangement that is treated as wholly or partly fiscally transparent under the tax law of either Contracting State" should be regarded as "income of a resident of a Contracting State", but only to the extent that the income is treated, for purposes of taxation by that State, as the income of a resident of that State.

The inclusion of this proposal in Article 1st of the Treaty between Brazil and the Netherlands (possibly through a Multilateral Instrument) would affect not only WHT reductions (which could be partially denied if the person ultimately receiving the income is not a resident from the Netherlands), but also the entitlement to tax sparing credits, established in Article 23, paragraph 4, as explained earlier.15

  • Entitlement to Treaty Benefits (Action 6)

The final report of Action 6 recommends the adoption of an "Entitlement to Benefits" clause, inspired by the Limitation on Benefits clause present in the United States Model Income Tax Convention.16

The purpose of the new "Entitlement to Benefits" clause would be to prevent granting treaty benefits to persons that should not be entitled to them, either because doing so is not in the interest of either Contracting State, or because the relevant taxpayer has employed a structure completely devoid of economic substance for the sole or main purpose of enjoying protection under the treaty. The proposed clause is divided into a set of objective and subjective criteria (the "principal purpose test", or PPT section), and if its text is included in the Multilateral Instrument of Action 15, taxpayers wishing to enjoy treaty benefits must comply with both criteria.17

At this stage, it is difficult to forecast whether Brazil will sign up or not for a Multilateral Instrument containing this proposed clause. Remember that the majority of Brazilian treaties either (i) do not have a Limitation on Benefits clause, but do mention the expression "beneficial owner", or (ii) have a Limitation on Benefits clause that is significantly broader than the already quite broad proposal issued by the OECD. Would Brazil be willing to relinquish its all-encompassing interpretive power of "beneficial ownership" in favor of a streamlined clause that would supersede provisions in all of its existing treaties? As implementation of BEPS proposals goes on, Brazilian policymakers will be compelled to provide a clear answer to this question.

  • Effectiveness of Dispute Resolution Mechanisms (Action 14)

The OECD has proposed a number of adjustments not only to the text of Article 25 of tax treaties in existence, but to the application of its terms by Contracting States around the world. According to the OECD, a minimum standard for Dispute Resolutions would include (i) a commitment to the timely resolution of treaty disputes,18 (ii) the publication of decisions on treaty issues for the benefit of taxpayers,19 and (iii) a commitment to mandatory arbitration (which, admittedly, is not a consensus among G20 countries).20

Article 25 of the Treaty with the Netherlands is, in general terms, a feature of the totality of tax treaties signed by Brazil. It does not compel Brazilian tax authorities to reach a decision on the claim presented by the taxpayer, nor does it require that this resolution, if reached, is communicated in a timely fashion. Brazilian tax practice with Dispute Resolution Mechanisms is virtually non-existent: anecdotal evidence points to either a blatant disregard for requests for the application of Article 25 or to formal communications stating that the position of Brazilian Law is not subject to debate before treaty partners. Implementation of BEPS, therefore, will possibly show whether Brazil is willing to modify its historical position of indifference or deficient application of Article 25.

For further comments on the application of the Treaty between Brazil and the Netherlands, please do not hesitate to contact our firm.

(*) With collaboration of the associate lawyer Lucas de Lima Carvalho (lcarvalho@tozzinifreire.com.br)

Footnotes

1 See Article 2nd, item IV, of Normative Instruction RFB 1,037/2010.

2 See Article 10 of Law 9,249/1995.

3 See Article 28 of Law 9,249/1995.

4 See Article 3rd of Provisional Measure 2,159-70/2001.

5 See Article 685, item I, of Decree 3,000/1999 (Income Tax Regulations, or "RIR/99"). See also Article 21 of Normative Instruction RFB 1,455/2014.

6 For further comments on the tax implications of the inclusion of the Dutch regime for "holding companies without substantial economic activities" in the Brazilian graylist, please see our post "The Netherlands are back into the Brazilian list of Privileged Fiscal Regimes". Available at: http://tozzinifreire.com.br/blog/tax/2015/12/23/the-netherlands-are-back-into-the-brazilian-list-of-pri vileged-fiscal-regimes.

7 See Article 18 of Law 12,249/2010. See also Article 15 of Normative Instruction RFB 1,455/2014.

8 See CARF. Ruling 1402-001.733. First Section, Second Chamber, Fourth Ordinary Group. Session of July 29, 2014. Published on October 1st, 2014.

9 See CARF. Ruling 1302-001.629. First Section, Third Chamber, Second Ordinary Group. Session of February 03, 2015. Published on March 11, 2015.

10 See Item 14 of the Commentary on Article 7th. OECD. Commentaries on the Articles of the Model Tax Convention. OECD: 2010, p. 133. Available at: http://www.oecd.org/berlin/publikationen/43324465.pdf.

11 See CARF. Ruling 1302-001.630. First Section, Third Chamber, Second Ordinary Group. Session of February 04, 2015. Published on February 10, 2015.

12 See CARF. Ruling 1103-001.122. First Section, First Chamber, Third Ordinary Group. Session of October 21, 2014. Published on March 31, 2015.

13 OECD. Neutralising the Effects of Hybrid Mismatch Arrangements, Action 2 – 2015 Final Report. OECD/G20 Base Erosion and Profit Shifting project. OECD: 2015, pp. 137-138. Available at: http://dx.doi.org/10.1787/9789264241138-en.

14 See note 1 above. OECD: 2015, pp. 139-143.

15 The final report provides an example that illustrates the interplay between hybrid mismatch rules and a tax sparing clause, such as the one in the Treaty between Brazil and the Netherlands, in the proposed item 26.7 to the OECD Commentary: "[Brazil] and [the Netherlands] have concluded a treaty identical to the Model Tax Convention. [Brazil] considers that an entity established in [the Netherlands] is a company and taxes that entity on interest that it receives from a debtor resident in [Brazil]. Under the domestic law of [the Netherlands], however, the entity is treated as a partnership and the two members in that entity, who share equally all its income, are each taxed on half of the interest. One of the members is a resident of [the Netherlands] and the other one is a resident of a country with which [Brazil] and [the Netherlands] do not have a treaty. The paragraph provides that in such case, half of the interest shall be considered, for the purposes of Article 11, to be income of a resident of [the Netherlands]." In this example, only half of the interest received would be associated with a tax sparing credit of 20%, in line with Article 23, paragraph 3, of the Treaty.

16 OECD. Preventing the Granting of Treaty Benefits in Inappropriate Circumstances, Action 6 – 2015  Final Report. OECD/G20 Base Erosion and Profit Shifting project. OECD: 2015, p. 11. Available at: http://dx.doi.org/10.1787/9789264241695-en.

17 See note 3 above. OECD: 2015, pp. 21-69.

18 OECD. Making Dispute Resolution Mechanisms More Effective, Action 14 – 2015 Final Report. OECD/G20 Base Erosion and Profit Shifting project. OECD: 2015, pp. 15-16. Available at: http://dx.doi.org/10.1787/9789264241633-en.

19 See note 18 above. OECD: 2015, p. 17.

20 See note 18 above. OECD: 2015, p. 41.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.