Official Gazette of 20.3.2006
| Concerning the application of provisions of the Convention between the Federative Republic of Brazil and the Spanish State for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income. |
The FEDERAL REVENUE SECRETARY, using the attributions conferred upon him by paragraph 3 of Article 230 of the Federal Revenue Secretariat’s internal regulations, approved by the Minister of Finance’s Ordinance nº 30 of 25 February 2005, and having regard to the provisions of item 4 of the Protocol to the Convention between the Federative Republic of Brazil and the Spanish State, promulgated by Decree nº 76,975 of 2 January 1976, and also the provisions of letter b of paragraph 2 of Article 12 of the Convention between the Federative Republic of Brazil and the State of Israel for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, promulgated by Decree nº 5,576 of 8 November 2005, declares:
Article 1. Subject to more beneficial provisions of the domestic law, taxation at source of dividends shall apply at the maximum rate of 10% on the gross amount of the remittance, whenever the company resident in Spain owns at least 25% of the voting rights of the company that is a resident of Brazil.
Article 2. In the case of
royalties, taxation at source, having as its base the gross amount of the remittance, shall apply at the following rates:I – 15% for the use of, or the right to use, industrial or commercial trademarks;
II – 10% in all other cases.
Article 3. As to royalties and technical services, the following must be observed:
I – for the purposes of the Convention, the term royalties includes all technical services or technical assistance, irrespective of whether or not they imply the transfer of technology, except in the case of the provisions of item II;
II – the provisions of Article 14 of the Convention (‘Independent personal services’) shall apply to technical services of professional nature related to the technical qualification of an individual or a group of individuals;
III – in no case shall the provisions of Article 22 of the Convention (‘Income not expressly mentioned’) apply to technical services rendered by a company that is a resident of a Contracting State in the territory of the other Contracting State;
IV – the scope of
Article 7 of the Convention (‘Business Profits’) is deemed to be restricted concerning services comprised in items I, II and III.Article 4. This Interpretative Declaratory Act shall take effect as from 1 January 2006.
Article 5. Interpretative Declaratory Act SRF 27 of 21 December 2004 is hereby formally revoked, with no interruption of its effects.
JORGE ANTONIO DEHER RACHID