Article 1 contains several definitions that must be used for the correct interpretation of the IGA. Among them, at the “dd” point, is the definition of “account holder.” For the purposes of the IGA, “account holder” means the person identified or identified as the holder of the financial account by the financial institution that manages the account. Given that the word “person” is used in the English version of the IGA, it is clear that the agreement applies to both individuals and corporations. Article 2, which explicitly states that information relating to legal entities is also exchanged between the relevant authorities, makes this clearer. This is a special contribution from our series on Brazilian tax agreements. In this article, we will discuss the details of the Tax Information Exchange Agreement (TIEA) and the Intergovernmental Agreement (IGA) between Brazil and the United States. Decree 8.003, issued on 16 May 2013, contains the text of the Agreement on the Exchange of Tax Information (“TIEA”) between the Government of the United States of America and the Brazilian Government. TIEA facilitates the exchange of information that may be useful to tax authorities in both countries for the purposes (i) of the determination, taxation, enforcement or collection of taxes on persons subject to TIEA Section 3 taxes, and (ii) the identification or continuation of tax cases. 2.
Article 28, paragraph 1: where the competent authorities of the two contracting states agree to do so, they deny contractual benefits to a particular person or institution where, in the opinion of those authorities, the granting of contractual benefits would constitute an abuse of the purpose and purpose of the treaty. Contrary to the provisions of point 1, this refusal appears to require a formal prior agreement between the contracting states. This classification is important because Brazilian taxpayers challenged the imposition of WHT for services to beneficiaries in contracting countries (then Germany and Canada) and argued that determining corporate profits in the corresponding agreements (Article 7) would prohibit taxation at source. The pioneering case in this regard, REsp 1161467/RS, was decided in 2012 by the Second Chamber of the Supreme Court (STJ) and was favourable to taxpayers. Many tax experts believe that TIEA is the first step towards approving not only FATCA, but also a tax agreement between the United States and Brazil, which would prevent or minimize double taxation. Negotiations on such a contract are not yet complete after several years. Decree 6,000, issued on 27 December 2006, contains the text of the bilateral income tax agreement signed by Brazil and Mexico (“treaty”).Originally published on April 12, 2021