Brazil and Switzerland signed a Double Tax Treaty (DTT) on May 03, 2018. The treaty was signed in Brasilia by the secretary of the Brazilian Federal Revenue Department, Mr Jorge Rachid, and the Swiss ambassador in Brazil, Mr Andrea Semadeni.
The main objective of the DTT is to define limits and competences of the contracting countries on the taxation of interest, capital, dividends, services, royalties, etc. and minimizing or eliminating double taxation on cross border operations, respectively defining how the taxes are split between the countries in any given operation.
The DTT under discussion follows the latest OECD standards, including Base Erosion and Profit Shifting (BEPS) dispositions and anti-abuse rules.
The signature of the DTT is an important step for both countries and long awaited by the private sector. Switzerland is the sixth biggest investor in Brazil, with USD 22 billion invested according to data from 2016.
Brazil has a relatively small and old DTT network comprising of 34 countries (17 in Europe). Several treaties are not in line with the latest standards and are therefore generating uncertainty about their application and disputes from...