The Spanish Chamber of Commerce in Brazil organized, on June 17, a session for the discussion of the new Income Tax Treaty Brazil – Spain, which was attended by representatives of the Legal and Foreign Commerce committees.
Experts on the matter, the speakers made presentations about income tax treaties between Brazil and Spain.
Fábio Tadeu Ramos Fernandes, lawyer of Almeida Advogados spoke about the treaties in Brazil that revoke or modify the internal tax legislation. “The treaty overlaps the internal legislation”, said Fernandes.
According to him, the article 7 of the Brazilian Treaty says that “the profits of a company of a Signing Country are only taxable in this country, unless this company also carries out businesses in the other Signing Country through a “permanent office” (fixed business office where the company carries out its businesses, or part of it) established in there”, except for the revenues in other articles of the Convention.
The lawyer concluded that, regarding the profits, the remittance to the foreign company as payment for the rendering of services cannot be taxed in Brazil if such foreign company has no permanent office in here.
Another lawyer from Almeida Advogados, Antonio Ramallo Fernandéz, also spoke about Brazil – Spain double taxation.
“The proposed double taxation model favors the exporting countries”, said Ramallo, that reinforced his comment remembering the significant increasing on foreign investments after the signature of the Spanish Double Taxation Convey, known as CDI in Spain.
Ramallo also said that the Spanish law also allows interpretations adverse than those current adopted by the Brazilian government, and can even offer possibilities for reductions or non-taxation, depending on the company’s model and the manner on which its products or services are offered.
In the end of the discussions, it was concluded that the double taxation treaty aims to encourage and facilitate the bilateral commerce between Brazil and Spain, however, it is possible to have more than one interpretation, depending on the laws of each country.
Therefore, it is important to have a detailed analysis of the treaty, the legislation and the legal documents involved in the transaction, in order to avoid conflicts, as such matter is complex, subjected to jurisprudence and which will, probably, create further discussions.