A zero percent withholding income tax rate on remittances to beneficiaries resident or domiciled abroad has been granted under Ordinance 70/97, dated 31 March 1997. The application of the nil rate will be applied to certain cases and will be applicable to obligations entered into after 1 January 1997. These include:
- commissions paid to exporters or agents abroad, provided the payment has been documented in the export register or similar document.
- remittances made for promotional advertising of Brazilian products, including rental of stands, exposition places and the opening and maintenance of commercial and representative offices.
- remittances made abroad for payment of hedge agreements
- payments of income arising from loan agreements made with parties domiciled in countries which have tax treaty relationships with Brazil.
- payment of discount interest offshore in connection with certain trade bills due abroad.
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.
For further information contact Carlos S Romero, Deloitte Touche Tohmatsu, Sao Paulo, Brazil on Tel: +55 11 257 0122, Fax: +55 11 258 8456