00 establish brazil-brazil-double-taxation-conventions_doc_eb000_prsp_v2

Foreign Direct Investment & Company Formation in Brazil

Establish Brazil | R. Peixoto Gomide, 445 - Jardim Paulista, So Paulo, CEP 01409-001- Brazil

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2ed edition 1

Sao Paulo, 2012 2 3 4 5

Brazil Double Taxation Prevention Treaties 6 7

Double Taxation Conventions 8 9

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11 1. Argentine ..................................................................................................................................................... 3 12

2. Austria ........................................................................................................................................................ 29 13

3. Belgium ...................................................................................................................................................... 56 14

4. Canada ....................................................................................................................................................... 85 15

5. Chile ......................................................................................................................................................... 114 16

6. China ....................................................................................................................................................... 144 17

7. Czech Republic and Slovakia ......................................................................................................... 172 18

8. Denmark ................................................................................................................................................ 199 19

9. Ecuador ................................................................................................................................................... 226 20

10. Finland .................................................................................................................................................... 252 21

11. France ...................................................................................................................................................... 280 22

12. Germany ................................................................................................................................................. 306 23

13. Hungary ................................................................................................................................................. 335 24

14. India ......................................................................................................................................................... 364 25

15. Israel ........................................................................................................................................................ 393 26

16. Italy........................................................................................................................................................... 423 27

17. Japan ........................................................................................................................................................ 451 28

18. Korea ........................................................................................................................................................ 486 29


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19. Luxembourg ......................................................................................................................................... 515 30

20. Mexico .................................................................................................................................................... 546 31

21. Netherlands ........................................................................................................................................... 548 32

22. Norway ................................................................................................................................................... 576 33

23. Peru .......................................................................................................................................................... 607 34

24. Philippines ............................................................................................................................................. 639 35

25. Portugal .................................................................................................................................................. 668 36

26. South Africa .......................................................................................................................................... 703 37

27. Spain ........................................................................................................................................................ 734 38

28. Sweden .................................................................................................................................................... 764 39

29. Ukraine ................................................................................................................................................... 790 40

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Argentine 44 45

Date of Conclusion: 17 May 1980 46 Effective Date: 1 January 1983. 47

CONVENTION BETWEEN 48 THE FEDERATIVE REPUBLIC OF BRAZIL AND THE ARGENTINE REPUBLIC 49

FOR THE AVOIDANCE OF DOUBLE TAXATION AND 50 THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME. 51

The Government of the Federative Republic of Brazil and the Government of the 52 Argentine Republic, 53

DESIRING to conclude a Convention for the avoidance of double taxation and the 54 prevention of fiscal evasion with respect to taxes on income, 55

HAVE AGREED as follows: 56

Article 1 57 Personal scope 58

This Convention shall apply to persons who are residents of one or both of the 59 Contracting States. 60

Article 2 61 Taxes covered 62

1. The existing taxes to which this Convention shall apply are: 63

a) in the Federative Republic of Brazil: 64

- the federal income tax excluding the tax on excess remittances and on activities 65 of minor importance; 66


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(hereinafter referred to as "Brazilian tax"); 67

b) in the Argentine Republic: 68

- the income tax ("impuesto a las ganancias"); 69

- the capital gain tax ("impuesto a los beneficios eventuales") 70

(hereinafter referred to as "Argentine tax"). 71

2. The Convention shall also apply to any identical or substantially similar 72 taxes that are subsequently in addition to, or in place of, the existing taxes. 73 The competent authorities of the Contracting States shall notify each other 74 of any significant changes that have been made in their respective taxation 75 laws. 76

Article 3 77 General definitions 78

1. For the purposes of this Convention, unless the context otherwise requires: 79

a) the term "Brazil" means the Federative Republic of Brazil; 80

b) the term "Argentina" means the Argentine Republic; 81

c) the term "national" means: 82

- any individual possessing the nationality of a 83 Contracting State; 84

- any legal person, partnership or association deriving its 85 status as such from the laws in force in a Contracting State; 86

d) the terms "a Contracting State" and "the other Contracting State" mean Brazil or 87 Argentina, as the context requires; 88


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e) the term "person" includes an individual, a company and any other body of 89 persons; 90

f) the term "company" means any body corporate or any entity that is treated as a 91 body corporate for tax purposes; 92

g) the terms "enterprise of a Contracting State" and "enterprise of the other 93 Contracting State" mean respectively an enterprise carried on by a resident of a 94 Contracting State and an enterprise carried on by a resident of the other 95 Contracting State; 96

h) the term "international traffic" means any transport by a ship or aircraft or 97 automotive vehicle operated by an enterprise that has its place of effective 98 management in a Contracting State, except when such a ship, aircraft or 99 automotive vehicle is operated solely between places in the other Contracting 100 State; 101

i) the term "tax" means Brazilian tax or Argentine tax, as the context requires; 102

j) the term "competent authority" means: 103

i) - in Brazil: the Minister of Finance, the Secretary of Federal Revenue or their 104 authorized representatives; 105

ii) - in Argentine: the Minister of Economy ("Secretaria de Estado de Hacienda"). 106

2. As regards the application of the Convention by a Contracting State, any 107 term not defined therein shall have the meaning that it has under the law 108 of that Contracting State for the purposes of the taxes to which the 109 Convention applies, unless the context otherwise requires. Where the term 110 has contrary or opposed meanings, the competent authorities of the 111 Contracting States shall, by mutual agreement, establish the interpretation 112 to be adopted. 113


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Article 4 114 Resident 115

1. For the purposes of this Convention, the term "resident of a Contracting State" 116 means any person who, under the laws of that State, is deemed to be a resident 117 thereof by reason of domicile or residence, place of management or any other 118 criterion of a similar nature. 119

2. Where by reason of the provisions of paragraph l an individual is a resident of 120 both Contracting States, then his status shall be determined as follows: 121

a) he shall be deemed to be a resident of the State in which he has a permanent 122 home available to him. If he has a permanent home available to him in both 123 Contracting States, he shall be deemed to be a resident of the Contracting State 124 with which his personal and economic relations are closer (centre of vital 125 interests); 126

b) if the Contracting State in which he has his centre of vital interests cannot be 127 determined, or if he has not a permanent home available to him in either State, he 128 shall be deemed to be a resident of the Contracting State in which he has an 129 habitual abode; 130

c) if he has an habitual abode in both Contracting States or in neither of them, he 131 shall be deemed to be a resident of the Contracting State of which he is a national; 132

d) if he is a national of both Contracting States or of neither of them, the 133 competent authorities of the Contracting States shall settle the question by mutual 134 agreement. 135

3. Where by reason of the provisions of paragraph l a person other than an 136 individual is a resident of both Contracting States, then it shall be deemed to be a 137 resident of the Contracting State in which its place of effective management is 138 situated. 139


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Article 5 140 Permanent establishment 141

1. For the purposes of this Convention, the term "permanent establishment" means 142 a fixed place of business through which the business of an enterprise is wholly or 143 partly carried on. 144

2. The term "permanent establishment" includes especially: 145

a) a place of management; 146 b) a branch; 147 c) an office; 148 d) a factory; 149 e) a workshop; 150 f) a mine, a quarry or any other place of extraction of natural resources; 151 g) a building site or construction or installation project which lasts for more than 152 six months. 153

3. The term "permanent establishment" shall be deemed not to include: 154

a) the use of facilities solely for the purpose of storage, display or delivery of 155 goods or merchandise belonging to the enterprise; 156 b) the maintenance of a stock of goods or merchandise belonging to the 157 enterprise solely for the purpose of storage, display or delivery; 158 c) the maintenance of a stock of goods or merchandise belonging to the 159 enterprise solely for the purpose of processing by another enterprise; 160 d) the maintenance of a fixed place of business solely for the purpose of 161 purchasing goods or merchandise or of collecting information, for the enterprise; 162 e) the maintenance of a fixed place of business solely for the purpose of 163 advertising, for the supply of information, for scientific research, or similar 164 activities of a preparatory or auxiliary character for the enterprise. 165

4. A person acting in a Contracting State on behalf of an enterprise of the other 166 Contracting State - other than an agent of an independent status to whom 167


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paragraph 5 applies - shall be deemed to be a permanent establishment in the 168 first-mentioned State if he has, and habitually exercises in that State, an authority 169 to conclude contracts in the name of the enterprise, unless his activities are 170 limited to the purchase of merchandise for the enterprise. 171

However, an insurance company of a Contracting State shall be deemed to have a 172 permanent establishment in the other Contracting State if it receives premiums or 173 insures risks in that other State. 174

5. An enterprise of a Contracting State shall not be deemed to have a permanent 175 establishment in the other Contracting State merely because it carries on business 176 in that other State through a broker, general commission agent or any other agent 177 of an independent status, provided that such persons are acting in the ordinary 178 course of their business. 179

6. The fact that a company which is a resident of a Contracting State controls or is 180 controlled by a company which is a resident of the other Contracting State, or 181 which carries on business in that other State (whether through a permanent 182 establishment or otherwise), shall not of itself constitute either company a 183 permanent establishment of the other. 184

7 .An enterprise of a Contracting State shall be deemed to have a permanent 185 establishment in the other Contracting State if it provides in that other State the 186 services of artistes or athletes to whom Article 17 applies. 187

Article 6 188 Income from immovable property 189

1. Income derived from immovable property, including income from agriculture 190 or forestry, may be taxed in the Contracting State in which such property is 191 situated. 192


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2. a) The term "immovable property", subject to the provisions of paragraphs "b" 193 and "c" below, shall have the meaning which it has under the law of the 194 Contracting State in which the property in question is situated. 195

b) the term shall in any case include property accessory to immovable property, 196 livestock and equipment used in agriculture and forestry, rights to which the 197 provisions of general law respecting landed property apply, usufruct of 198 immovable property and rights to variable or fixed payments as consideration for 199 the working of, or the right to work, mineral deposits, sources and other natural 200 resources. 201

c) ships, boats and aircraft shall not be regarded as immovable property. 202

3. The provisions of paragraph 1 shall apply to income derived from the direct 203 use, letting, renting or use in any other form of immovable property. 204

4. The provisions of paragraphs 1 and 3 shall also apply to the income from 205 immovable property of an enterprise and to income from immovable property 206 used for the performance of independent personal services. 207

Article 7 208 Business profits 209

1. The profits of an enterprise of a Contracting State shall be taxable only in that 210 State unless the enterprise carries on business in the other Contracting State 211 through a permanent establishment situated therein. If the enterprise carries on 212 business as aforesaid, the profits of the enterprise may be taxed in the other State 213 but only so much of them as is attributable to that permanent establishment. 214

2. Subject to the provisions of paragraph 3, where an enterprise of a Contracting 215 State carries on business in the other Contracting State through a permanent 216 establishment situated therein, there shall in each Contracting State be attributed 217 to that permanent establishment the profits which it might be expected to make if 218 it were a distinct and separate enterprise engaged in the same or similar activities 219


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under the same or similar conditions and dealing wholly independently with the 220 enterprise of which it is a permanent establishment. 221

3. In determining the profits of a permanent establishment, there shall be allowed 222 as deductions expenses which are incurred for the purposes of the permanent 223 establishment, including executive and general administrative expenses so 224 incurred. 225

4. No profits shall be attributed to a permanent establishment by reason of the 226 mere purchase by that permanent establishment of goods or merchandise for the 227 enterprise. 228

5. Where profits include items of income which are dealt with separately in other 229 Articles of this Convention, then the provisions of those Articles shall not be 230 affected by the provisions of this Article. 231

Article 8 232 Air transport, land transport, shipping and inland waterways transport 233

1. Profits from international traffic by enterprises engaged in the operation of air 234 transport, land transport, shipping and inland waterways transport shall be 235 taxable only in the Contracting State in which the place of effective management 236 of the enterprise is situated. 237

2. If the place of effective management of a shipping enterprise is or of an inland 238 waterways transport enterprise is aboard a ship or boat, then it shall be deemed 239 to be situated in the Contracting State in which the home harbour of the ship or 240 boat is situated, or, if there is no such home harbour, in the Contracting State of 241 which the operator of the ship is a resident. 242

3. The provisions of paragraph 1 shall also apply to profits from the participation 243 in a pool, a joint business or an international operating agency. 244

4. The Convention between Argentina and Brazil of June 21, 1949 for the 245 avoidance of double taxation on income from the operation of shipping and air 246


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transport and the agreement between Argentina and Brazil of March 15, 1972 247 for the avoidance of double taxation on income from the operation of inland 248 transportation in international traffic shall cease to apply as regards taxes 249 covered by this Convention during the period in which this Convention is in 250 force. 251

Article 9 252 Associated enterprises 253

Where 254

a) an enterprise of a Contracting State participates directly or indirectly in the 255 management, control or capital of an enterprise of the other Contracting State, or 256

b) the same persons participate directly or indirectly in the management, control 257 or capital of an enterprise of a Contracting State and an enterprise of the other 258 Contracting State, 259

and in either case conditions are made or imposed between the two enterprises in 260 their commercial or financial relations which differ from those which would be 261 made between independent enterprises, then any profits which would, but for 262 those conditions, have accrued to one of the enterprises, but, by reason of those 263 conditions, have not so accrued, may be included in the profits of that enterprise 264 and taxed accordingly. 265

Article 10 266 Dividends 267

1. Dividends paid by a company which is a resident of a Contracting State to a 268 resident of the other Contracting State may be taxed in that other State. 269

2. However, such dividends may also be taxed in the Contracting State of which 270 the company paying the dividends is a resident and according to the laws of that 271 State. 272


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3. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of 273 the dividends, being a resident of a Contracting State, carries on business in the 274 other Contracting State of which the company paying the dividends is a resident 275 through a permanent establishment or a fixed base situated therein, with which 276 the holding by virtue of which the dividends are paid is effectively connected. In 277 such a case, the provisions of Articles 7 or 14, as the case may be, shall apply. 278

4. The term "dividends" as used in this Article means income from shares, 279 "jouissance" shares or "jouissance" rights, mining shares, founders' shares or other 280 rights, not being debt-claims, participating in profits, as well as income from 281 other corporate rights which is subjected to the same taxation treatment as 282 income from shares by the laws of the Contracting State of which the company 283 making the distribution is a resident. 284

5. Where a company which is a resident of Argentina has a permanent 285 establishment in Brazil, such a permanent establishment may be subject to a tax 286 withheld at source in accordance with Braziian law. 287

6. Where a company which is a resident of a Contracting State derives profits or 288 income from the other Contracting State, that other Contracting State may not 289 impose any tax on the dividends paid by the company, except insofar as such 290 dividends are paid to a resident of that other State or insofar as the holding in 291 respect of which the dividends are paid is effectively connected with a permanent 292 establishment or a fixed base situated in that other State, nor subject the 293 company's undistributed profits to a tax on the company's undistributed profits, 294 even if the dividends paid or the undistributed profits consist wholly or partly of 295 profits or income arising in such other State. 296

Article 11 297 Interest 298

1. Interest arising in a Contracting State and paid to a resident of the other 299 Contracting State may be taxed in that other State. 300


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2. However, such interest may also be taxed in the Contracting State in which it 301 arises and according to the laws of that State. 302

3. Notwithstanding the provisions of paragraphs 1 and 2: 303

a) interest arising in a Contracting State and paid to the Government of the other 304 Contracting State, a political subdivision thereof or any agency (including a 305 financial institution) wholly owned by that Government or political subdivision 306 shall be exempt from tax in the first-mentioned Contracting State; 307

b) interest from securities, bonds or debentures issued by the Government of a 308 Contracting State, a political subdivision thereof or any agency (including a 309 financial institution) wholly owned by that Government or a political subdivision 310 shall be taxable only in that State. 311

4. The term "interest" as used in this Article means income from government 312 securities, bonds or debentures, whether or not secured by mortgage and whether 313 or not carrying a right to participate in the debtor's profits, and from debt-claims 314 of every kind, as well as other income assimilated to income from money lent by 315 the tax law of the Contracting State in which the income arises. 316

5. Interest shall be deemed to arise in a Contracting State when the payer is that 317 State itself, a political subdivision thereof or a resident of that Contracting State. 318 Where, however, the person paying the interest, whether it is a resident of a 319 Contracting State or not, has in a Contracting State a permanent establishment or 320 a fixed base in connection with which the indebtedness on which the interest is 321 paid was incurred, and such interest is borne by such a permanent establishment 322 or fixed base, then such interest shall be deemed to arise in the Contracting State 323 in which the permanent establishment or fixed base is situated. 324

6. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of 325 the interest, being a resident of a Contracting State, carries on business in the 326 other Contracting State in which the interest arises through a permanent 327 establishment or a fixed base situated therein and the debt-claim in respect of 328


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which the interest is paid is effectively connected with such a permanent 329 establishment or fixed base. In such a case the provisions of Article 7 or Article 330 14, as the case may be, shall apply. 331

7. Where, by reason of a special relationship between the payer and the beneficial 332 owner or between both of them and some other person, the amount of the 333 interest, having regard to the debt-claim for which it is paid, exceeds the amount 334 which would have been agreed upon by the payer and the beneficial owner in the 335 absence of such relationship, the provisions of this Article shall apply only to the 336 last-mentioned amount. In such a case, the excess part of the payments shall 337 remain taxable according to the laws of each Contracting State, due regard being 338 had to the other provisions of this Convention. 339

Article 12 340 Royalties 341

1. Royalties arising in a Contracting State and paid to a resident of the other 342 Contracting State may be taxed in that other State. 343

2. However, such royalties may also be taxed in the Contracting State in which 344 they arise and according to the laws of that State. 345

3. The term "royalties" as used in this Article means payments of any kind 346 received as a consideration for the use of, or the right to use, any copyright of 347 literary, artistic or scientific work (including cinematograph films, films or tapes 348 for television or radio broadcasting), any patent, trade mark, design or model, 349 plan, secret formula or process, or for the use of, or the right to use, industrial, 350 commercial, or scientific equipment, or for information concerning industrial, 351 commercial or scientific experience. 352

4. Royalties shall be deemed to arise in a Contracting State when the payer is that 353 State itself, a political subdivision or local authority thereof, or a resident of that 354 State. Where, however, the person paying the royalties, whether he is a resident of 355 a Contracting State or not, has in a Contracting State a permanent establishment 356


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or fixed base in connection with which the obligation to pay the royalties was 357 incurred, and such royalties are borne by such permanent establishment or fixed 358 base, then such royalties shall be deemed to arise in the Contracting State in 359 which the permanent establishment or fixed base is situated. 360

5. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of 361 the royalties, being a resident of a Contracting State, carries on business in the 362 other Contracting State in which the royalties arise through a permanent 363 establishment or a fixed base, and the right or property in respect of which the 364 royalties are paid is effectively connected with such a permanent establishment 365 or fixed base. In such a case the provisions of Article 7 or Article 14, as the case 366 may be, shall apply. 367

6. Where, by reason of a special relationship between the payer and the beneficial 368 owner or between both of them and some other person, the amount of the 369 royalties, having regard to the use, right or information for which they are paid, 370 exceeds the amount which would have been agreed upon by the payer and the 371 beneficial owner in the absence of such relationship, the provisions of this Article 372 shall apply only to the last-mentioned amount. In such a case, the excess part of 373 the payments shall remain taxable according to the laws of each Contracting 374 State, due regard being had to the other provisions of this Convention. 375

Article 13 376 Capital gains 377

1. Gains derived from the alienation of property may be taxed in the Contracting 378 State according to the internal law of each State. 379

2. Notwihstanding the provisions of paragraph 1, gains from the alienation of 380 vehicles operated in international traffic, or movable property pertaining to the 381 operation of such vehicles, belonging to an enterprise to which Article 8 applies, 382 shall be taxable only in the Contracting State in which the place of effective 383 management of the enterprise is situated. 384


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Article 14 385 Independent personal services 386

1. Income derived by a resident of a Contracting State in respect of professional 387 services or other activities of an independent character shall be taxable only in 388 that State, unless: 389

a. the remuneration for such services or activities is paid by a company 390 which is a resident of the other Contracting State or is borne by a 391 permanent establishment or fixed base situated in that other State; or 392

b. such services or activities are rendered in the other Contracting State and 393 the beneficial owner 394

i. is present in that other state for a period or periods exceeding in the 395 aggregate 183 days in the fiscal year; or 396

ii) has in that other State a fixed base habitually available to him for the exercise 397 of his activities, but only insofar as the income is attributable to that fixed base. 398

2.The term "professional services" includes especially independent scientific, 399 technical, literary, artistic, educational or teaching activities as well as the 400 independent activities of physicians, lawyers, engineers, architects, dentists and 401 accountants. 402

Article 15 403 Dependent personal services 404

1. Subject to the provisions of Articles 16, 18, 19, 20 and 21, salaries, wages and 405 other similar remuneration derived by a resident of a Contracting State in respect 406 of an employment shall be taxable only in that State unless the employment is 407 exercised in the other Contracting State. If the employment is so exercised, such 408 remuneration as is derived therefrom may be taxed in that other State. 409


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2. Notwithstanding the provisions of paragraph 1, remuneration derived by a 410 resident of a Contracting State in respect of an employment exercised in the other 411 Contracting State shall be taxable only in the first-mentioned State if: 412

a) the recipient is present in the other State for a period or periods not exceeding 413 in the aggregate 183 days in the fiscal year concerned, and 414

b) the remuneration is paid by, or on behalf of, an employer who is not a resident 415 of the other State, and 416

c) the remuneration is not borne by a permanent establishment or a fixed base 417 which the employer has in the other State. 418

3. Notwithstanding the preceding provisions of this Article, remuneration derived 419 in respect of an employment exercised aboard a vehicle operated in international 420 traffic, by an enterprise to which Article 8 applies, shall be taxed only in the 421 Contracting State in which the place of effective management of the enterprise is 422 situated. 423

Article 16 424 Diretors fees 425

Directors' fees and other similar payments derived by a resident of a Contracting 426 State in his capacity as a member of the board of directors or of any other board 427 of a company which is a resident of the other Contracting State may be taxed in 428 that other State. 429

Article 17 430 Artistes and athletes 431

Notwithstanding the provisions of Articles 14 and 15, income derived by an 432 entertainer, such as a theatre, motion picture, radio or television artiste, or a 433 musician, or as an athlete, from his personal activities as such exercised may be 434 taxed in the Contracting State in which the activities are exercised. 435


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Article 18 436 Pensions and annuities 437

1.Pensions and other similar remuneration deriving from the rendering of 438 personal services, as well as the annuities and similar income, shall be taxable 439 only in the Contracting State from which they are derived. 440

2. In this Article 441

a.) the term "pensions and other similar remuneration" means periodic payments 442 made after retirement in consideration of past employment or as a compensation 443 for injuries received in connection with past employment; 444

b.) the term "annuities and similar income" means a stated sum payable 445 periodically at stated times during life, or during a specified or ascertainable 446 period of time, under an obligation to make the payments in return for adequate 447 and full consideration in money or money's worth (other than services rendered). 448

Article 19 449 Government service and social security payments 450

1. a) Remuneration, other than a pension, paid by a Contracting State or a 451 political subdivision or a local authority thereof to an individual in respect of 452 services rendered to that State or subdivision or authority shall be taxable only in 453 that State. 454

b) However, such remuneration shall be taxable only in the other Contracting 455 State if the services are rendered in that State and the individual: 456

i) - is a national of that State; or 457

ii) - not being a national of that State, was a resident of that State during the 458 period preceding the rendering of the services. 459


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2. Any pension paid by, either directly or out of funds created by, a Contracting 460 State or a political subdivision or a local authority thereof to an individual in 461 respect of services rendered to that State or subdivision or authority shall be 462 taxable only in that State. 463

3.The provisions of Articles 15, 16 and 18 shall apply to remuneration and 464 pensions paid in respect of services rendered in connection with a business 465 carried on by a Contracting State or a political subdivision or a local authority 466 thereof. 467

4. Pensions paid out of funds deriving from the Social Security System of a 468 Contracting State shall be taxable only in that State. 469

Article 20 470 Teachers and researchers 471

An individual who is or was immediately before visiting a Contracting State a 472 resident of the other Contracting State and who, at the invitation of the 473 Government of the first-mentioned State or of a university, college, school, 474 museum or other cultural institution of that first-mentioned State or under an 475 official programme of cultural exchange, is present in that State for a period not 476 exceeding two years solely for the purpose of teaching, giving lectures or 477 carrying out research at such institution shall be exempt from tax in that State on 478 his remuneration for such activities, provided that the payment of such 479 remuneration is derived by him from outside that State. 480

Article 21 481 Students and apprentices 482

1. An individual who is, or was immediately before visiting a Contracting State, a 483 resident of the other Contracting State and who is present the first-mentioned 484 Contracting State solely: 485


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a) as a student at a university, college, or school in that first-mentioned 486 Contracting State; 487

b) as a recipient of a scholarship, allowance or award granted by a religious, 488 charitable, scientific or educational organization for the primary purpose of 489 studying or carrying on research; 490

c) as a member of a technical cooperation program developed by the Government 491 of the other Contracting State; or 492

d) "CG Times,Times New Roman"> as an apprentice, 493

shall be exempt from tax in the first-mentioned Contracting State in respect of 494 remittance from abroad for the purpose of his maintenance, education or 495 training. 496

2.An individual who is, or was immediately before visiting a Contracting State, a 497 resident of the other Contracting State and who is present in the first-mentioned 498 Contracting State solely for the purpose of his education or training shall be 499 exempt from tax in the first-mentioned Contracting State for a period not 500 exceeding three consecutive fiscal years in respect of remuneration from 501 employment exercised in that State for the purpose of his maintenance, education 502 or training. 503

Article 22 504 Other income 505

Items of income of a resident of a Contracting State, arising in the other 506 Contracting State and not dealt with in the foregoing Articles, may be taxed in 507 that other State. 508

Article 23 509 Methods for the elimination of double taxation 510


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1. Where a resident of Brazil derives income which, in accordance with the 511 provisions of this Convention, may be taxed in Argentina, Brazil, notwithstanding 512 the provisions of paragraph 2, shall allow, as a deduction from the tax on the 513 income of that resident, an amount equal to the income tax paid in Argentina. 514

However, such deduction shall not exceed that part of the income tax, as 515 computed before the deduction is given, which is attributable to the income 516 which may be taxed in Argentina. 517

2. Dividends which are taxable in Argentina under the provisions of this 518 Convention, paid by a company being a resident of Argentina to a company being 519 a resident of Brazil which holds more than 10 percent of the capital of the paying 520 company, shall be exempt from tax in Brazil. 521

3.Where a resident of Argentina derives income which, in accordance with the 522 provisions of this Convention may be taxed in Brazil, Argentina shall exempt 523 such income from tax, unless it is deemed to arise in Argentina. 524

Article 24 525 Non-discrimination 526

1. Nationals of a Contracting State shall not be subjected in the other Contracting 527 State to any taxation or any requirement connected therewith, which is other or 528 more burdensome than the taxation and connnected requirements to which 529 nationals of that other State in the same circumstances are or may be subjected. 530

2. The taxation on a permanent establishment which an enterprise of a 531 Contracting State has in the other Contracting State shall not be less favourably 532 levied in that other State than the taxation levied on enterprises of that other 533 Contracting State carrying on the same activities. 534

This provision shall not be construed as obliging a Contracting State to grant to 535 residents of the other Contracting State any personal allowances, relief and 536


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reductions for taxation purposes on account of civil status or family 537 responsabilities which it grants to its own residents. 538

3. Enterprises of a Contracting State, the capital of which is wholly or partly 539 owned or controlled, directly or indirectly, by one or more residents of the other 540 Contracting State, shall not be subjected in the first-mentioned State to any 541 taxation or any requirement connected therewith which is other or more 542 burdensome than the taxation and connected requirements to which other 543 similar enterprises of the first-mentioned State, the capital of which is wholly or 544 partly owned or controlled, directly or indirectly, by one or more residents of a 545 third State, are or may be subjected. 546

4. This Article applies only to taxes covered by this Convention. 547

Article 25 548 Mutual agreement procedure 549

1. Where a resident of a Contracting State considers that the actions of one or 550 both of the Contracting States result or will result for him in taxation not in 551 accordance with the provisions of this Convention, he may, irrespective of the 552 remedies provided by the domestic law of those States, present his case to the 553 competent authority of the Contracting State of which he is a resident within two 554 years from the first notification of the action resulting in taxation not in 555 accordance with the provisions of this Convention. 556

2. The competent authority shall endeavour, if the objection appears to it to be 557 justified and if it is not itself able to arrive at a satisfactory solution, to resolve the 558 case by mutual agreement with the competent authority of the other Contracting 559 State, with a view to the avoidance of taxation which is not in accordance with 560 this Convention. 561

3. The competent authorities of the Contracting States shall endeavour to resolve 562 by mutual agreement any difficulties or doubts arising as to the interpretation or 563


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application of the Convention. They may also consult together for cases not 564 provided for in this Convention. 565

4. The competent authorities of the Contracting States may communicate with 566 each other directly for the purpose of reaching an agreement in the sense of the 567 preceding paragraphs. When it seems advisable in order to reach agreement to 568 have an oral exchange of opinions, such exchange may take place through a 569 comission consisting of representatives of the competent authorities of the 570 Contracting States. 571

Article 26 572 Exchange of information 573

1. The competent authorities of the Contracting States shall exchange such 574 information as is necessary for carrying out the provisions of this Convention or 575 of the domestic laws of the Contracting States concerning taxes covered by the 576 Convention and levied under the same Convention. Any information received by 577 a Contracting State shall be treated as secret and shall be disclosed only to persons 578 or authorities (including courts and administrative bodies) concerned with the 579 assessment or collection of the taxes covered by this Convention. 580

2. In no case shall the provisions of paragraph 1 be construed so as to impose on 581 a Contracting State the obligation: 582

a) to carry out administrative measures at variance with the laws and 583 administrative practice of that or of the other Contracting State; 584

b) to supply information which is not obtainable under the laws or in the normal 585 course of the administration of that or of the other Contracting State; 586

c) to supply information which would disclose any trade, business, industrial, 587 commercial or professional secret or trade process, or information, the disclosure 588 of which would be contrary to public policy (ordre public). 589


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Article 27 590 Diplomatic and consular officials 591

Nothing in this Convention shall affect the fiscal privileges of diplomatic consular 592 officials under the general rules of international law or under the provisions of 593 special agreements. 594

Article 28 595 Entry into force 596

1. This Convention shall be ratified and the instruments of ratification shall be 597 exchanged at Brasilia as soon as possible. 598

2. The Convention shall enter into force upon the exchange of instruments of 599 ratification and its provisions shall have effect: 600

- in respect of taxes withheld at source, on amounts paid, remitted on or after of 601 January 1 of the calendar year immediately following the year in which the 602 Convention enters into force; 603

- in respect of other taxes covered by the Convention, to the taxable period 604 beginning on or after of January 1 of the calendar year immediately following the 605 year in which the Convention enters into force. 606

Article 29 607 Termination 608

This Convention shall remain in force until terminated by a Contracting State. 609 Either Contracting State may terminate this Convention, through diplomatic 610 channels, by giving notice of termination at least six months before the end of any 611 calendar year as of the third year following its entry into force. In such a case the 612 Convention shall apply for the last time: 613

- in respect of taxes withheld at source on amounts paid before the end of the 614 calendar year in which the notice of termination is given; 615


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- in respect of other taxes covered by this Convention, to amounts received 616 during the taxable period beginning in the calendar year in which the notice of 617 termination is given. 618

In witness whereof the Plenipontentiaries of the two Contracting States have 619 signed this Convention and have affixed hereto their Seals. 620

Done in Buenos Aires on May 17, 1980, in duplicate, in the Portuguese and 621 Spanih languages, each text being equally authentic. 622

For the Government of For the Government of 623

the Federative Republic of Brazil the Argentine Republic 624

PROTOCOL 625

At the moment of the signature of the Convention for the avoidance of double 626 taxation with respect to taxes on income between the Federative Republic of 627 Brazil and the Argentine Republic, the undersigned, duly authorized thereto, have 628 agreed upon the following provisions which constitute an integral part of the 629 Convention. 630

1. With reference to Article 2 631

It is understood that the tax on profit remittances provided for in the Argentine 632 foreign investment law is not covered by the provisions of Article 2 and, 633 therefore, is not an integral part of the Convention. 634


It is understood that cases to which Article V, paragraphs 3 "d" and 4, applies are 636 also covered by paragraph 2 of this Article, where the purchase is followed by 637 exportation of the goods or merchandise. 638

3. With reference to Article 7, paragraph 1 639


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It is understood that in case of amendments in the Brazilian income tax law 640 involving a change in the treatment applicable to branches of Brazilian 641 enterprises located abroad as in force on the date of the signature of this Protocol, 642 Argentina may request the revision of Article 7, paragraph 1, of the Convention. 643


It is understood that, in the case of Brazil, the term "dividends" also covers any 645 distribution corresponding to certificates of an investment fund resident of Brazil. 646

5. With reference to Article 11, paragraph 3 "a" 647

It is understood that, for the purposes of Article 11, paragraph 3 "a", the term "an 648 agency" covers those institutions specified by mutual agreement of the competent 649 authorities and: 650

a) in the case of Argentina: the Central Bank of the Argentine Republic, the 651 National Bank of Development and the National Mortgage Bank; 652

b) in the case of Brazil: the Central Bank of Brazil, the National Bank of Economic 653 Development, the regional and state development banks and the National Bank of 654 Housing. 655


It is understood that: 657

a) in the case of Argentina, interest is deemed to arise in that State when the 658 capital on which the interest is paid is placed or economically used in its 659 territory; 660

b) in the case of Brazil, interest is deemed to arise in that State when it is paid by a 661 person resident or domiciled in Brazil or by a permanent establishment or fixed 662 base situated therein and belonging to non-residents persons or to persons 663 domiciled abroad. 664


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It is understood that the provisions of paragraph 3 of Article 12 apply to income 666 arising from the use or the right to use international news and from the 667 rendering of technical services and of technical, scientific, administrative and 668 similar assistance. 669


It is understood that: 671

a) in the case of Argentina, "royalties" are deemed to arise in that State when the 672 property from the transfer of which they arise is placed or economically used in 673 its territory; 674

b) in the case of Brazil, "royalties" are deemed to arise in that State when they are 675 paid by a person resident or domiciled in Brazil or by a permanent establishment 676 or fixed base situated therein and belonging to non-residents persons or to 677 persons domiciled abroad. 678


It is understood that the provisions of Article 14 shall apply even if the activities 680 are exercised by a company. 681

10.With reference to Article 23 682

It is understood that exemptions and deductions from the Argentine tax on 683 profits, whether total or partial, shall not apply as far as those exemptions or 684 deductions can result in a transfer of revenue to the Brazilian treasury. 685 11. With reference to Article 23, paragraph 3 686

It is understood that income from property situated, placed or economically used 687 in Argentine territory, from performing therein any action or activity that may 688 produce profits, or from events which have ocurred therein, is deemed to arise in 689


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Argentina. 690 12. With reference to Article 24, paragraph 2 691

a. It is understood that the provisions of paragraph 5 of Article 10 are not in 692 conflict with the provisions of paragraph 2 of Article 24. 693

b. Article 24, paragraph 2, is not deemed to cover the provisions of Argentine 694 law regarding the taxation of a permanent establishment that an enterprise 695 of Brazil has in Argentina. 696

13.With reference to Article 24, paragraph 3 697

The provisions of Brazilian tax law which do not allow that royalties as defined in 698 paragraph 3 of Article 12, paid by a company resident of Brazil to a resident of 699 Argentina which holds at least 50 per cent of the voting capital of that company, 700 be deductible in the determination of the taxable profits of the company which is 701 a resident of Brazil, shall be applicable notwithstanding the provisions of 702 paragraph 4 of Article 24 of this Convention. 703

In witness whereof the Plenipontentiaries of the two Contracting States have 704 signed this Protocol and have affixed hereto their Seals. 705

Done in Buenos Aires on May 17, 1980, in duplicate, in the Portuguese and 706 Spanih languages, each text being equally authentic. 707

For the Government of For the Government of 708

the Federative Republic of Brazil the Argentine Republic 709

710

711 712


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713

Austria 714 715


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Date of Conclusion: 24 May 1975 716 Effective Date: 1 January 1977 717

CONVENTION 718

Between the Republic of Austria and the Federative Republic of Brazil for the 719 Avoidance of Double Taxation with Respect to Taxes on Income and on Capital 720

The Republic of Austria and the Federative Republic of Brazil, desiring to 721 conclude a Convention for the avoidance of double taxation with respect to taxes 722 on income and capital, have agreed as follows: 723

Article 1 724 Personal scope 725

This Convention shall apply to persons who are residents of one or both of the 726 Contracting States. 727

Article 2 728 Taxes covered 729

1. The existing taxes to which the Convention shall apply are: 730

a. In the case of Brazil: 731

- the income tax, excluding the tax on excess remittances and on activities 732 of minor importance (hereinafter referred to as " Brazilian tax"). 733

b. In the case of Austria: 734

- 1. the income tax (die Einkommensteuer); 735

- 2. the corporation tax (die Krperschaftsteuer ); 736


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- 3. the contribution from income for the promotion of residential building and 737 for the equalisation of family burdens ( der Beitrag von Einkommen zur 738 Frderung des Wohnbaues and fr Zwecke des 739

Familienlastenausgleiches ); 740

- 4. the contribution from income to the emergency (der 741 Katastrophenfondsbeitrag von Einkommen); 742

- 5. the special tax on income (die Sonderabgabe von Einkommen) 743

- 6. the directors' tax (die Aufsichtsratsabgabe ); 744

- 7. the capital tax (die Vermgensteuer ); 745

- 8. the contribution from capital to the emergency fund (der 746 Katastrophenfondsbeitrag von Vermgen); 747

- 9. the special tax on capital (die Sonderabgabe vom Vermgen); 748

-10. the tax on property eluding death duties (die Abgabe vom Vermgen, die der 749 Erbschaft ssteuer 750

entzogen sind); 751

- 11. the tax on commercial and industrial enterprises, including the tax levied 752 on the sum of wages 753

(die Gewerbesteuer einschliesslich der Lohnsummensteuer); 754

- 12. the land tax (die Grundsteuer ); 755

- 13. the tax on agricultural and forestry enterprises (die Abgabe von land und 756 forstwirtschaftlichen Betrieben); 757


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-14. the contributions from agricultural and forestry enterprises, to the fund for 758 the equalisation.of family burdens (die Beitrge von land- und 759 forstwirtschaftlichen Betrieben zum Ausgleichs fonds fr Familienbeihilfen); 760

-15. the tax on the value of vacant plots (die Abgabe von Bodenwert bei 761 unbebauten Grundstcken). 762

2. The Convention shall also apply to any identical or substantially similar taxes 763 which are subsequently imposed in addition to, or in place of, the existing taxes. 764 The competent authorities of the Contracting States shall notify to each other any 765 changes which have been made in their respective taxation laws, especially as far 766 as Article 23, paragraph 7, is concerned. 767

Article 3 768 General definitions 769

1. In this Convention, unless the context otherwise requires: 770

a) the term "Brazil" means the Federative Republic of Brazil; 771

b) the term "Austria" means the Republic of Austria; 772

c) the terms "a Contracting State" and "the other Contracting State" 773 mean Brazil or Austria as the context requires; 774

d) the term "person" comprises an individual, a company and any 775 other body of persons; 776

e) the term "company" means any body corporate or any entity 777 which is treated as a body corporate for tax purposes; 778

f) the terms "enterprise of a Contracting State" and "enterprise of the 779 other Contracting State" mean respectively an enterprise carried on 780 by a resident of a Contracting State and an enterprise carried on by a 781 resident of the other Contracting State; 782


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g) the term "competent authority" means: 783

i) In Brazil: the Minister of Finance, the 784 Secretary of Federal Revenue or their 785 authorized representative; 786

ii) In Austria: the Federal Minister of Finance. 787

2. As regards the application of the Convention by a Contracting State, any 788 term not otherwise defined shall, unless the context otherwise requires, 789 have the meaning which it has under the law of that Contracting State 790 relating to the taxes which are the subject of the Convention. 791

Article 4 792 Fiscal domicile 793

1. For the purposes of this Convention, the term "resident of a Contracting States" 794 means any person who, under the law of that State, is liable to taxation therein by 795 reason of his domicile, residence, place of management or any other criterion of a 796 similar nature. 797

2. Where by reason of the provisions of paragraph 1 an individual is a resident of 798 both Contracting States, then this case shall be determined in accordance with the 799 following rules; 800

a) He shall be deemed to be a resident of the Contracting State 801 in which he has a permanent home available to him. If he has 802 a permanent home available to him in both Contracting 803 States, he shall be deemed to be a resident of the Contracting 804 State with which his personal and economic relations are 805 closest (centre of vital interests). 806

b) If the Contracting State in which he has his centre of vital 807 interests cannot be determined, or if he has not a permanent 808 home available to him in either Contracting State, he shall be 809


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deemed to be a resident of the Contracting State in which he 810 has an habitual abode; 811

c) If he has an habitual abode in both Contracting States or in 812 neither of them, he shall be deemed to be a resident of the 813 Contracting State of which he is a national; 814

d) if he is a national of both Contracting States or of neither of 815 them, the competent authorities of the Contracting States shall 816 proceed according to Article 25. 817

3. Where by reason of the provisions of paragraph 1 a person other than an 818 individual is a resident of both Contracting States, then it shall be deemed to be a 819 resident of the Contracting State in which its place of effective management is 820 situated. 821

Article 5 822 Permanent establishment 823

1. For the purposes of this Convention, the term "permanent establishment" means 824 a fixed place of business in which the business of the enterprise is wholly or 825 partly carried on. 826

2. The term "permanent establishment" shall include especially: 827

a) a place of management; 828

b) a branch; 829

c) an office; 830

d) a factory; 831

e) a workshop; 832

f) a mine, quarry or other place of extraction of natural resources; 833


Page 35 of 814

g) a building site or construction or assembly project which exists for more than 834 six months. 835

3. The term "permanent establishment" shall not be deemed to include: 836

a) the use of facilities solely for the purpose of storage, display or delivery of 837 goods or merchandise belonging to the enterprise; 838

b) the maintenance of a stock of goods or merchandise belonging to the 839 enterprise solely for the purpose of storage, display or delivery; 840

c) the maintenance of a stock of goods or merchandise belonging to the 841 enterprise solely for the purpose of processing by another enterprise; 842

d) the maintenance of a fixed place of business solely for the purpose of 843 purchasing goods or merchandise or for collecting information, for the 844 enterprise; 845

e) the maintenance of a fixed place of business solely for the purpose of 846 advertising, for the supply of information, the scientific research or for similar 847 activities which have a preparatory or auxiliary character, for the enterprise. 848

4. A person acting in a Contracting State on behalf of an enterprise of the other 849 Contracting State - other than an agent of an independent status to whom 850 paragraph 5 applies - shall be deemed to be a permanent establishment in the 851 first-mentioned Contracting State if he has, and habitually exercises in that State, 852 an authority to conclude contracts in the name of the enterprise, unless his 853 activities are limited to the purchase of goods or merchandise for the enterprise. 854

5. An enterprise of a Contracting State shall not be deemed to have a permanent 855 establishment in the other Contracting State merely because it carries on business 856 in that other State through a broker, general commission agent or any other agent 857 of an independent status, where such persons are acting in the ordinary course of 858 their business. 859


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6. An insurance company of a Contracting State shall furthermore be deemed to 860 have a permanent establishment in the other State provided that, through a 861 representative, it receives premiums or secures risks in that other State. 862

7. The fact that a company which is a resident of a Contracting State controls or is 863 controlled by a company which is a resident of the other Contracting State, or 864 which carries on business in that other State 865

(whether through a permanent establishment or otherwise), shall not of itself 866 constitute either company a permanent establishment of the other. 867

Article 6 868 Income from immovable property 869

1. Income from immovable property may be taxed in the Contracting State in 870 which such property is situated. 871

2. a) The term "immovable property" shall, subject to the provisions of sub-872 paragraphs b) and c) below, be defined in accordance with the law of the 873 Contracting State in which the property in question is situated. 874

b) The term "immovable property" shall in any case include property accessory to 875 immovable property, livestock and equipment used in agriculture and forestry, 876 rights to which the provisions of general law respecting immovable property 877 apply, usufruct of immovable property and rights to variable or fixed payments 878 as consideration for the working of, or the right to work, mineral deposits, 879 sources and other natural resources. 880

c) Ships and aircraft shall not be regarded as immovable property. 881

3. The provisions of paragraph 1 shall apply to income derived from the direct 882 use, letting, or use in any other form of immovable property. 883


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4. The provisions of paragraphs 1 and 3 shall also apply to the income from 884 immovable property of an enterprise and to income from immovable property 885 used for the performance of professional services. 886

Article 7 887 Business profits 888

1. The profits of an enterprise of a Contracting State shall be taxable only in that 889 State unless the enterprise carries on business in the other Contracting State 890 through a permanent establishment situated therein. If the enterprise carries on 891 business as aforesaid, the profits of the enterprise may be taxed in the other State 892 but only so much of them as is attributable to that permanent establishment. 893

2. Where an enterprise of a Contracting State carries on business in the other 894 Contracting State through a permanent establishment situated therein, there shall 895 in each Contracting State be attributed to that permanent establishment the 896 profits which it might be expected to make if it were a distinct and separate 897 enterprise engaged in the same or similar activities under the same or similar 898 conditions and dealing wholly independently with the enterprise of which it is a 899 permanent establishment. 900

3. In the determination of the profits of a permanent establishment, there shall be 901 allowed as deductions expenses which are incurred for the purposes of the 902 permanent establishment including executive and general administrative 903 expenses so incurred. 904

4. No profits shall be attributed to a permanent establishment by reason of the 905 mere purchase by that 906

permanent establishment of goods or merchandise for the enterprise. 907

5. Where profits include items of income which are dealt with separately in other 908 Articles of this 909


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Convention, then the provisions of those Articles shall not be affected by the 910 provisions of this Article. 911

6. The provisions of paragraphs 1 to 5 shall also apply to income derived by the 912 "Stille 913

Gesellschafter'' of a "Stille Gesellschaft" of the Austrian law. 914

Article 8 915 Shipping and air transport 916

Profits from the operation of ships or aircraft in international traffic shall be 917 taxable only in the Contracting State in which the place of effective management 918 of the enterprise is situated. 919

Article 9 920 Associated enterprises 921

Where 922

a) an enterprise of a Contracting State participates directly or indirectly in the 923 management, control or capital of an enterprise of the other Contracting State, or 924

b) the same persons participate directly or indirectly in the management, control 925 or capital of an enterprise of a Contracting State and an enterprise of the other 926 Contracting State, 927

and in either case conditions are made or imposed between the two enterprises in 928 their commercial or financial relations which differ from those which would be 929 made between independent enterprises, then any profits which would, but for 930 those conditions, have accrued to one of the enterprises, but, by reason of those 931 conditions, have not so accrued, may be included in the profits of that enterprise 932 and taxed accordingly. 933


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Article 10 934 Dividends 935

1. Dividends paid by a company which is a resident of a Contracting State to .a 936 resident of the other Contracting State may be taxed in that other State. 937

2. However, such dividends may also be taxed in the Contracting State of which 938 the company paying the dividends is a resident, but the tax so charged shall not 939 exceed 15 per cent of the gross amount of the dividends. 940

This paragraph shall not affect the taxation of the company in respect of the 941 profits out of which the dividends are paid. 942

3. The provisions of paragraphs 1 and 2 shall not apply if the recipient of the 943 dividends, being a resident of a Contracting State, has in the other Contracting 944 State, of which the company paying the dividends is a resident, a permanent 945 establishment with which the holding by virtue of which the dividends are paid is 946 effectively connected. In such a case, the provisions of Article 7 shall apply. 947

4. The term "dividends" as used in this Article means, income from shares, 948 "jouissance" shares or "jouissance" rights, mining shares, founders' shares or other 949 rights, not being debt-claims, participating in profits, as well as income from 950 other corporate rights assimilated to income from shares by the taxation law of 951 the State of which the company making the distribution is a resident. 952

5. Where a company which is a resident of Austria has a permanent 953 establishment in Brazil that permanent establishment may be subject to a tax 954 withheld at source in accordance with Brazilian law. However such a tax cannot 955 exceed 15 per cent of the gross amount of the profits of that permanent 956 establishment determined after the payment of the corporate tax related to such 957 profits. 958

6. The tax rate limitation foreseen in paragraphs 2 and 5 shall not apply to 959 dividends or profits paid or remitted from Brazil before the 1st of January, 1976. 960


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Article 11 961 Interest 962

1. Interest arising in a Contracting State and paid to a resident of the other 963 Contracting State may be taxed in that other State . 964

2. However, such interest may be taxed in the Contracting State in which it arises 965 but the tax so charged shall not exceed l5 per cent of the gross amount of the 966 interest. 967

3. Notwithstanding the provisions of paragraphs 1 and 2: 968

a) Interest arising in a Contracting State and paid to the Government. of the other 969 Contracting State, a political subdivision or a public community thereof, or any 970 agency (including a financial institution) wholly owned by that Government, 971 political subdivision or public community, shall be exempt from tax in the first-972 mentioned Contracting State. 973

b) Interest arising from securities, bonds or debentures issued by the Government 974 of a Contracting State or any agency (including a financial institution) owned by 975 that Government, and paid to a resident of the other Contracting State shall be 976 taxable only in the first mentioned State. 977

4. The term "interest" as used in this Article means income from Government 978 securities, bonds or debentures, whether or not secured by mortgage and whether 979 or not carrying a right to participate in profits, and debt-claims of every kind as 980 well as other income assimilated to income from money lent by the taxation 1aw 981 of the Contracting State, in which the income arises. 982

5. The provisions of paragraphs 1 and 2 shall not apply if the recipient of the 983 interest, being a resident of a Contracting State, has in the other Contracting State 984 in which the interest arises a permanent establishment with which the debt-985 claim from which the interest arises is effectively connected. In such a case the 986 provisions of Article 7 shall apply. 987


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6. The limitation established in paragraph 2 shall not apply to interest arising in a 988 Contracting State and paid to a permanent establishment of an enterprise of the 989 other Contracting State which is situated in a third State. 990

7. Interest shall be deemed to arise in a Contracting State when the payer is that 991 Contracting State itself, a political subdivision, a public community or a resident 992 of that State. Where, however, the person paying the interest, whether he is a 993 resident of a Contracting State or not, has in a Contracting State a permanent 994 establishment in connection with which the indebtedness on which the interest is 995 paid was incurred, and such interest is borne by such a permanent establishment, 996 then such interest shall be deemed to arise in the Contracting State in which the 997 permanent establishment is situated. 998

8. Where, owing to a special relationship between the payer and the recipient or 999 between both of them and some other person, the amount of the interest paid, 1000 having regard to the debt-claim for which it is paid, exceeds the amount which 1001 would have been agreed upon by the payer and the recipient in the absence of 1002 such relationship, the provisions of this Article shall apply to the last-mentioned 1003 amount. In that case, the excess part of the payments shall remain taxable 1004 according to the law of each Contracting State, due regard being had to the other 1005 provisions of this Convention. 1006

Article 12 1007 Royalties 1008

1. Royalties arising in a Contracting State and paid to a resident of the other 1009 Contracting State may be taxed in that other State. 1010

2. However, such royalties may be taxed in the Contracting State in which they 1011 arise, but the tax so charged shall not exceed: 1012

a) 10 per cent of the gross amount of royalties arising from the use 1013 of, or the right to use, any copyright of literary, artistic or scientific 1014


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work, but not including cinematograph films, films or tapes for 1015 television or radio broadcasting; 1016

b) 25 per cent of the gross amount of royalties arising from the use or the right to 1017 use trade marks; 1018

c)15 per cent in all other cases. 1019

3. The term "royalties" as used in this Article means payments of any kind 1020 received as a consideration for the use of, or the right to use, any copyright of 1021 literary, artistic or scientific work (including cinematograph 1022

films, films or tapes for television or radio broadcasting), any patent, trade marks, 1023 design or model, plan, secret formula or process, as well as for the use of, or the 1024 right to use, industrial, commercial or scientific equipment, or for information 1025 concerning industrial, commercial or scientific experience. 1026

4. Royalties shall be deemed to arise in a Contracting State when the payer is that 1027 State itself, a political subdivision, a public community or a resident of that State. 1028 However, where the person paying the royalties, whether he is a resident of a 1029 Contracting State or not, has in a Contracting State a permanent establishment in 1030 connection with which the obligation to pay the royalties was incurred, and such 1031 royalties are borne by such a permanent establishment, then such royalties shall 1032 be deemed to arise in the Contracting State in which the permanent establishment 1033 is situated. 1034

5. The provisions of paragraphs 1 and 2 shall not apply if the recipient of the 1035 royalties, being a resident of a Contracting State, has in the other Contracting 1036 State in which the royalties arise, a permanent establishment with which the right 1037 or property giving rise to the royalties is effectively connected. In such a case, the 1038 provisions of Article 7 shall apply. 1039

6. Where, owing to a special relationship between the payer and the recipient or 1040 between both of them and some other person, the amount of the royalties paid, 1041


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having regard to the use, right or information for which they are paid exceeds 1042 the amount which would have been agreed upon by the payer and the recipient 1043 in the absence of such relationship, the provisions of this Article shall apply only 1044 to the last-mentioned amount. In that case, the excess part of the payments shall 1045 be taxable according to the law of each Contracting State, due regard being had 1046 to the other provisions of this Convention. 1047

Article 13 1048 Capital gains 1049

1. Gains from the alienation of immovable property, as defined in paragraph 2 of 1050 Article 6, may be taxed in the Contracting State in which the immovable property 1051 is situated. 1052

2. Gains from the alienation of movable property forming part of the business 1053 property of a permanent establishment which an enterprise of a Contracting State 1054 has in the other Contracting State or of movable property pertaining to a fixed 1055 base available to a resident of a Contracting State in the other Contracting State 1056 for the purpose of performing professional services, including such gains from 1057 the alienation of such a permanent establishment (alone or with the whole 1058 enterprise) or of such a fixed base, may be taxed in the other State. However, 1059 gains from the alienation of ships or aircraft operated in international traffic or 1060 movable property pertaining to the operation of such ships or aircraft shall be 1061 taxable only in the Contracting State in which the place of effective management 1062 of the enterprise is situated. 1063

3. Gains from the alienation of any property or right other than those mentioned 1064 in paragraphs l and 2 may be taxed in both Contracting States. 1065

Article 14 1066 Independent personal services 1067

1. Income derived by a resident of a contracting State in respect of professional 1068 services or other independent activities of a similar nature shall be taxable only in 1069


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that State, unless the payment of such services and activities is borne by a 1070 permanent establishment situated on the other Contracting State or a company 1071 resident therein. In such a case that income may be taxed in the other State. 1072

2. The term "professional services" includes especially independent scientific, 1073 literary, artistic, educational, technical or teaching activities, as well as 1074 independent activities of physicians, lawyers, engineers, architects, dentists and 1075 accountants. 1076

Article 15 1077 Dependent personal services 1078

1. Subject to the provisions of Articles 16, 18 and 19, salaries, wages and other 1079 similar remuneration derived by a resident of a Contracting State in respect of an 1080 employment shall be taxable only in that State unless the employment is exercised 1081 in the other Contracting State. If the employment is so exercised, such 1082 remuneration as is derived therefrom may be taxed in that other State. 1083

2. Notwithstanding the provisions of paragraph 1, remuneration derived by a 1084 resident of a Contracting State in respect of an employment exercised in the other 1085 Contracting State shall be taxable only in the first-mentioned State if: 1086

a) the recipient is present in the other State for a period or periods not 1087 exceeding in the aggregate 1088

183 days in the fiscal year concerned, and 1089

b) the remuneration is paid by, or on behalf of, an employer who is not a 1090 resident of the other State, and 1091

c) the remuneration is not borne by a permanent establishment or a fixed 1092 base which the employer has in the other State. 1093

2. Notwithstanding the preceding provisions of this article, remuneration in 1094 respect of an employment exercised aboard a ship or aircraft in 1095


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international traffic, may be taxed in the Contracting State in which the 1096 place of effective management of the enterprise is situated. 1097

Article 16 1098 Directors' fees 1099

Directors' fees and similar payments derived by a resident of a Contracting State 1100 in his capacity as a member of the board of directors or of any council of a 1101 company which is a resident of the other Contracting State may be taxed in that 1102 other State. 1103

Article 17 1104 Artistes and athletes 1105

1. Notwithstanding the provisions of articles 14 and 15, income derived by public 1106 entertainers, such as theatre, motion picture, radio or television artistes, and 1107 musicians, and by athletes, from their personal activities as such, may be taxed in 1108 the Contracting State in which these activities are exercised. 1109

2. Notwithstanding the other provisions of this Convention, income derived 1110 by an enterprise of a Contracting State from the activity of providing the 1111 services within the other Contracting State of a person referred to in 1112 paragraph 1, whether this person is a resident of a Contracting State or 1113 not, may be taxed in the Contracting State in which these services are 1114 performed. 1115

Article 18 1116 Pensions 1117

Subject to the provisions of Article 19, pensions and other similar remuneration 1118 arising in a Contracting State and paid to a resident of the other Contracting State 1119 in consideration of past employment shall be taxable only in the first-mentioned 1120 State. 1121


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Article 19 1122 Governmental and other public functions .'. 1123

1. Remuneration, including pensions, paid by, or out of funds created by, a 1124 Contracting State or a political subdivision thereof to any individual in respect of 1125 services rendered to that State or to a political subdivision thereof in the 1126 discharge of functions of a governmental or other public nature shall be taxable 1127 only in that State. 1128

2. Pensions paid from Social Security funds of a Contracting State shall be taxable 1129 only in that State. 1130

3. The provisions of paragraph 1 shall apply to remuneration, received by the 1131 members of the staff of the Austrian Delegation of Commerce in Brazil, if the 1132 recipient is not a national of Brazil. 1133

2. The provisions of Articles 15, 16 and 18 shall apply to remuneration or 1134 pensions in respect of services rendered in connection with any trade or 1135 business carried on by one of the Contracting States or a political 1136 subdivision thereof. 1137

Article 20 1138 Students 1139

1. Payments which a student or business apprentice who is or was formerly a 1140 resident of a Contracting State and who is present an the other Contracting State 1141 solely for the purpose of his education or training receives for the purpose of his 1142 maintenance, education or training shall not be taxed in that other State, 1143 provided that such payments are made to him from sources outside that other 1144 State. 1145

2. Remuneration which a student or business apprentice who is or was formerly a 1146 resident of a Contracting State derives from an employment which he exercises in 1147 the other Contracting State for the purpose of practical training for a period or 1148


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periods not exceeding in the aggregate 183 days in the year concerned shall not 1149 be taxed in that other State. 1150

Article 21 1151 Income not expressly mentioned 1152

Items of income of a resident of a Contracting State which are not expressly 1153 mentioned in the 1154

foregoing Articles of this Convention shall be taxable only in that State. Such 1155 income may, however, be 1156

taxed in the other Contracting State, if it is paid by a resident of that other State or 1157 a permanent 1158

establishment situated in that other State. 1159

Article 22 1160 Capital 1161

1. Capital represented by immovable property, as defined in paragraph 2 of 1162 Article 6, may be taxed in the Contracting State in which such property is 1163 situated. 1164

2. Capital represented by movable property forming part of the business property 1165 of a permanent establishment of an enterprise, or by movable property pertaining 1166 to a fixed base used for the performance of professional services, may be taxed in 1167 the Contracting State in which the permanent establishment or fixed base is 1168 situated. 1169

3. Ships and aircraft operated in international traffic and movable property 1170 pertaining to the operation of such ships and aircraft, shall be taxable only in the 1171 Contracting State in which the place of effective management of the enterprise is 1172 situated. 1173


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4. All other elements of capita1 of a resident of a Contracting State shall be 1174 taxable only in that State. 1175

Article 23 1176 Methods for the elimination of double taxation 1177

1. Subject to the provisions of Article 11, paragraph 3b, and Articles 18 and 19, 1178 where a resident of Brazil derives income which, in accordance with the 1179 provisions of this Convention, may be taxed in Austria, Brazil shall allow as a 1180 deduction from the tax on the income of that person, an amount equal to the 1181 income tax paid in Austria. 1182

The deduction shall not, however, exceed that part of the income tax as computed 1183 before the deduction is given which is appropriate to the income which may be 1184 taxed in Austria. 1185

2. Dividends paid by a company which is a resident of Austria to a company 1186 which is a resident of Brazil which owns at least 25 per cent of the share capital 1187 of the paying company shall be exempt from corporation tax in Brazil. 1188

3. Where a resident of Austria derives income which, in accordance with the 1189 provisions of this Convention, may be taxed in Brazil, Austria shall, subject to the 1190 provisions of paragraphs 2 till 5 exempt such income from tax but may, in 1191 calculating tax on the remaining income of that person apply the rate of tax 1192 which would have been applicable if the exempted income had not been so 1193 exempted. 1194

4. Subject to the provisions of Article 11, paragraph 3b, where a resident of 1195 Austria derives income which, in accordance with the provisions of Articles 10, 1196 11, 12 and 13 paragraph 3, may be taxed in Brazil, Austria shall allow as a 1197 deduction from the tax on the income of that person amount equal to the tax paid 1198 in Brazil. Such a deduction shall not, however, exceed that part of the tax, as 1199 computed before the deduction is given, which is appropriate to the income 1200 .derived from Brazil. 1201


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5. For the application of paragraph 4 the tax which has been paid on dividends, 1202 interest or royalties derived from Brazil is to be considered to have been paid at a 1203 rate of 25 percent of the gross amount of the income. 1204

6. Dividends paid by a company which is a resident of Brazil to a company which 1205 is

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