On 10 December 2017, Brazil’s Federal Revenue Department’s (“RFB‘s”) Private Ruling DISIT/SRRF06 6,603/2017 was published addressing the applicable taxes on commissions payable to foreign agents of Brazilian companies. The ruling confirmed that:
- Withholding income tax (“IRRF”) is zero rated, unless the beneficiary of the commissions is located in a tax haven (if that is the case, the rate will be 25%);
- the Contribution on the Intervention on the Economic Domain (“CIDE”) is not charged on the payment of commissions; and
- PIS-Import and COFINS-Import are payable.
For the benefits above to apply the commissions must be for export sales and be registered on the export registration document (registro de exportação, known as the “RE”).
Note that in certain circumstances the benefits may be available for market research conducted abroad, foreign trade fairs outside of Brazil and advertising published in other countries.
Last modified: March 20, 2019