Written by More power to the authorities and less secrecy for taxpayers.
On 9 August 2019, Decree 9,966/2019 was published. This was the last step required for the Protocol amending the double tax agreement (“DTA”) between Brazil and Norway to come into force in Brazil (the Protocol had been signed back in February 2014).
More Information Available to Tax Authorities and Courts
The Protocol replaces article 27 of the DTA, substantially expanding its scope. Specifically, the new article provides that the information that may be exchanged includes:
- information which is “foreseeably relevant” (rather than “necessary”) for carrying out the provisions of the DTA; or
- information which is “foreseeably relevant […] to the administration or enforcement of the domestic laws concerning taxes of every kind and description imposed on behalf of the [member countries], at national or federal levels, insofar as the taxation […] is not contrary to the [DTA]”.
The scope of information that may be exchanged is not restricted to those points above. However, it only covers federal taxes in the case of Brazil.
The Protocol goes even further, allowing a country to seek information that is not gathered for tax purposes. The request cannot be refused simply because it is held by a bank or other type of fiduciary (among others).
Less Secrecy
The information exchanged is no longer given as much secrecy as in the original DTA. Now, the information will be treated “in the same manner” as that provided under the domestic laws of the country where it is located and may be disclosed to courts and administrative bodies involved in tax assessment, collection, enforcement or prosecution.
The information may even be disclosed in public court proceedings or in judicial decisions.
Take care!
The amended DTA will give wide scope for tax authorities to seek information about taxpayers with substantially less protection given to taxpayers.
Taxpayers with dealings in Brazil and Norway should be particularly careful in relation to tax compliance and how the authorities in one country will interpret the information provided to the other’s tax authorities.
For more information contact me.
Brazil Brazilian Federal Revenue Department Double Tax Agreements DTA Norway Receita Federal Skatt Skatteetaten Tax Information Exchange Agreement The Norwegian Tax Administration TIEA
Last modified: August 12, 2019
The site is managed by Fabiano Deffenti, a lawyer admitted to practise in Brazil and Australia, enrolled as a barrister and solicitor in New Zealand and licensed as an attorney-at-law in New York.
