Brazil and Uruguay sign an agreement to avoid double taxation

Brazil’s foreign minister Ernesto Araújo, and Uruguay’s Rodolfo Nin Novoa, signed a bilateral agreement aimed at avoiding double taxation on transactions between the two countries. The bill still needs to go through Congress before being brought into effect. The agreement, called the ‘Convention to Eliminate Double Taxation in Relation to Taxes on Income and Capital and to Prevent Tax Evasion and Elim,’ limits the tax jurisdiction of the two countries by eliminating or minimizing the possibilities of double taxation of income.

The convention also incorporates the Organization for Economic Cooperation and Development’s (OECD) Project on Erosion of the Tax Base and Profit Transfer (BEPS), as well as other relevant recommendations of the project. The agreement also includes a specific article to combat tax evasion and abuse of the convention. Brazil has agreements to avoid double taxation with 37 countries, of which 33 are already in force.

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