RIO DE JANEIRO, BRAZIL – Multinationals from the United States, Germany, and the United Kingdom want a Double Taxation Avoidance Agreement (DTAA) with Brazil, with the aim of expanding trade and investment in the country.
This is shown by an unprecedented survey conducted by the National Confederation of Industry (CNI) and the American Chamber of Commerce (AMCHAM) with the 55 largest American, British and German multinationals that have productive investments in Brazil.
Brazil currently maintains a network of agreements to avoid double taxation with 33 countries and four more in the process of ratification. However, none of these agreements includes Germany, the USA, and the United Kingdom, which are major investment destinations or origins involving Brazil.
Together, the three economies have over US$ 250 billion in investment stocks in Brazil. According to the CNI, DTAAs reduce costs for foreign investments in the country by reducing income tax on important revenues such as dividends, trade in services, financing, and royalties.
According to the CNI-Amcham consultation, 86 percent of investors estimate that they could increase trade in services with Brazil. The foreign multinationals’ replies also showed that, for 63 percent of them, a DTAA would contribute to increasing their investments in the country. In addition, 54 percent said that the existence of an anti-dual taxation agreement with these three countries would increase the purchase of technology by Brazil.
“The result of the survey is very clear. The companies claim that signing this agreement would increase their investments in Brazil. Signing DTAAs with the US, Germany and the UK would be a major contribution to improving the business environment in the country and attracting more investment at a time when Brazil needs it most,” said Carlos Eduardo Abijaodi, director of Industrial Development at CNI.
Source: Agência Brasil