On May 4, 2018 the Swiss Federal Department for Finance issued a press release announcing that on May 3, 2018 the Swiss Confederation and the Federative Republic of Brazil concluded an Agreement for the Elimination of Double Taxation with respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance (Hereafter: the DTA).

Although the DTA has been signed, it has not entered into force yet. For the new DTA to enter into force, the respective ratification procedures have to have been finalized in both countries.

Under the DTA the dividend withholding tax that a source state will be allowed to withhold over dividend distributions is limited to 10% of the gross amount of the dividends in qualifying situations (a minimum shareholding of 10% in the distributing company that has been held for a period of at least 365 days) and to 15% of the gross amount of the dividends in all other cases.

Under the DTA the withholding tax that a source state will be allowed to withhold over interest is limited to 10% of the gross amount of the interest if the beneficiary is a bank and if the loan has been granted for a period of at least five years to finance the purchase of equipment or investment projects; and to 15% of the gross amount of the interest in all other cases.

Under the DTA the withholding tax that a source state will be allowed to withhold over royalties is limited to 15% of the gross amount of the royalties for use or right to use a trademark and to 10% of the gross amount of the royalties in all other cases.

Click on the language of your choice to be forwarded to the text of the Swiss – Brazilian DTA as concluded on May 3, 2018 (German or Portuguese).

 

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