The Interpretative Declaratory Act SRF (Federal Revenue and Customs Administration) nº 4, from 17th March 2006, made changes concerning the rate of Withholding Tax on remittances of Royalties from Brazil to residents in Spain. According to said Act, the Withholding Tax shall be of: (I) – fifteen per cent, in case of license or concession of industrial or commercial trademark use; and (II) – ten per cent, in the other cases (instead of twelve and a half per cent, as stated in the previous Declaratory Act). Despite other changes, the Declaratory Act states that the concept of royalties includes all technical services or technical assistance services, not being relevant if they suppose or not transfer of technology at their own. Besides Royalties payment, the Declaratory Act also stated that withholding tax on dividends shall be carried at the maximum rate of ten per cent over the remittance’s gross value, whenever the Company with headquarters in Spain has at least twenty five per cent of the capital and voting rights at the company with headquarters in Brazil, except in case of a more favorable treatment in the domestic law. These rules are in force since January 2006.
06Apr 2006