Originally published in the July 24 edition of World Tax Daily (Copyrights Tax Analysts – www.taxanalysts.com)
Brazil’s official gazette of July 16 published Legislative Decree 188/2008, which brings into force the Brazil-U.K. agreement to avoid double taxation on air and maritime transport. For the treaty to become effective in Brazil, President Luiz Inácio Lula da Silva must issue a presidential decree incorporating the treaty into Brazil’s legal system.
The agreement, signed in Brazil on July 27, 2005, was submitted to the Brazilian Congress on December 16, 2005.
Article 1 of the agreement grants a full tax exemption to income earned by U.K. companies with international maritime and air transport operations in Brazil, including exemption from the corporate income tax and the 9 percent social contribution on net income. Article 2 grants a similar tax exemption to Brazilian companies operating in the United Kingdom.
Article 4 provides that the tax exemptions are retroactive as of January 1, 1967.
David Roberto R. Soares da Silva