On June 15, the Brazilian Senate ratified the agreement to eliminate double taxation between Uruguay and Brazil (the “Agreement”). However, the promulgation by the Lula government is still pending.
These agreements usually cap the tax rates that the signatory countries can apply to certain income (dividends, interest, royalties and fees for technical services). In the case of the Agreement with Brazil, it offers certain advantages for individuals and companies that generate income in Uruguay, but this depends on the category of said income.
Next, we will review the ceilings on the rates provided for in the Agreement. We clarify that, in some cases, these ceilings will not have as much practical relevance, and this because the ceiling, provided for in the Agreement, exceeds the tax rate (Non-Resident Income Tax – IRNR) established by local regulations.
