Originally published in the July 28 edition of World Tax Daily (Copyrights Tax Analysts – www.taxanalysts.com)
The Finance and Taxation Committee of the Brazilian Chamber of Deputies (lower house of Congress) on July 9 approved the pending income tax treaty with Peru.
The tax convention, signed in Lima on February 17, 2006, was submitted to Brazil’s Congress on May 31, 2006.
The treaty generally follows the OECD model tax convention, but includes some specific provisions related to air, terrestrial, sea, and river transport. It also includes tax provisions concerning independent and dependent professionals, students and apprentices, athletes, pensions, annuities, and social security payments.
The treaty has already been approved by the chamber’s Commission of Constitution and Justice (April 24, 2007) and now moves to the full chamber for review and vote. Thereafter, it will be forwarded to the Senate.
For the treaty to become effective in Brazil, both the Chamber of Deputies and the Senate must approve it and issue a legislative decree. President Luiz Inácio Lula da Silva must then issue a presidential decree incorporating the treaty into Brazilian law.
David Roberto R. Soares da Silva