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Saturday, January 28, 2023
HomeEconomyBrazil and the United Kingdom sign an agreement to end double taxation

Brazil and the United Kingdom sign an agreement to end double taxation

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After five months of negotiations, Brazil and the United Kingdom signed this Tuesday (29) an agreement to eliminate double taxation of individuals and companies.

According to the Federal Revenue Service, the measure will increase legal certainty in transactions between the two countries and should increase bilateral trade and investment flows.

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The special secretary of Revenue, Julio Cesar Vieira Gomes, said in a note that the double taxation agreements signed by Brazil are important for the ongoing process of the country’s accession to the OECD (Organization for Economic Cooperation and Development).

Known as “the club of rich countries”, the OECD is an organization that brings together France, Germany, the United Kingdom, Japan and the United States, among others.

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Brazil has been trying to join this team since 2018, still under the Michel Temer (MDB) government. Joining the club became one of the main flags of the Jair Bolsonaro (PL) government and the Minister of Economy, Paulo Guedes.

Throughout the current government, however, the country’s international image has been eroded, especially in the environmental area, which has hindered Brazil’s initiative.

According to the Revenue, the agreement with the United Kingdom is in line with the OECD convention model and with the intentions of the group of countries to avoid erosion of the tax base and the transfer of profits.

“Countries interested in maintaining their investment capacity and attractiveness seek to sign agreements that mitigate or eliminate this double taxation”, says Gomes.

“I hope that the signature will play an important role in increasing trade and investment, the attractiveness, competitiveness of Brazilian products, legal security and long-term stability”, highlighted the secretary.

Data from the Central Bank indicate that Brazilian investments in the United Kingdom totaled US$ 5.2 billion (R$ 27.6 billion) in 2020, with Brazil being the destination for British investments of around US$ 25.2 billion (R$ 133 .7 billion).

The trade flow between the two countries in 2021 reached US$ 5.6 billion (R$ 29.7 billion), according to data from the Foreign Trade Secretariat of the Ministry of Economy.

The ADT signing ceremony was attended by the acting UK ambassador to Brazil, Melanie Hopkins, the executive secretary of the Ministry of Economy, Marcelo Guaranys, and the special secretary of the RFB, Julio Cesar Vieira Gomes.

“Brazil is the largest country with which we have a close bilateral economic relationship and with which we do not yet have a TDA in place. This is a priority for the UK and we are here to address it,” said Hopkins.

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