Brazil's Tax and Trade Policies under the Rousseff - Brazil-US ...

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Taxes on Company’s DistributionsDividends• The profits distributed as dividends, by Brazilian resident legal entities to beneficiaries thatare resident in Brazil (corporations or individuals) or abroad, are currently not subject towithholding income tax in BrazilInterest on Net Equity (“INE”)• Brazilian legislation permits a Brazilian corporation to make distributions to shareholdersas INE and treats those payments as a tax deductible, if some requirements are met• For purposes of tax deduction, the payments of INE are limited to the daily pro ratavariation of the long term interest rate (TJLP), as determined by the Central Bank fromtime to time, over the net equity of the company• Also, for purposes of tax deductibility, the amount to be paid may not exceed the greaterof50% of net income (after CSLL but before taking into account IRPJ and theamounts of INE itself) related to the period in which the payment is made and50% of the sum of retained profits and profit reserves as of, as rule, the beginningof the calendar year in which the payment is made
Taxes on Company’s Distributions• INE (continuation)• Payment of INE whether to a Brazilian resident or to a beneficiary located abroad issubject to withholding income tax in Brazil at the rate of 15%• If the beneficiary of the INE is located in a country or location that does not imposeincome tax or where the maximum income tax rate is lower than 20% or yet whereinternal legislation imposes restrictions on the disclosure of shareholdingcomposition or investment ownership (“Favorable Tax Jurisdiction”), the withholdingincome tax rate is increased to 25%
Page 1: Brazil - U.S. Business CouncilBrazi
Page 6 and 7: Limitations to Foreign Investment
Page 8 and 9: Establishing a company in Brazil•
Page 10 and 11: Acquisition of Equity Interest• A
Page 12 and 13: Brazilian Corporate TaxationReal Pr
Page 16 and 17: Other Brazilian Tax Considerations1
Page 18 and 19: Other TaxesOther Federal Taxes• I
Page 20 and 21: Tax Incentives• REIDI - Special R

Brazil's Tax and Trade Policies under the Rousseff - Brazil-US ...

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