On August 1st, 2017, it was published the Executive Decree no. 9,115/2017, which internalized the Convention for the Avoidance of Double Taxation between Brazil and Russia (“Brazil-Russia Treaty” or “Convention”), signed in Brasilia on November 22nd, 2004. We have focused on the most relevant points, considering most usual queries of taxpayers.

According to article 2 of the Convention, the rules to avoid double taxation shall apply to the Brazilian income  tax of individuals and corporations and the Russian tax on profits of organizations and Russian income tax on individuals. There is no mention regarding Brazilian Social Contribution on Net Profits (CSLL), but it can be interpreted that the aforementioned contribution is covered by the Brazil-Russia Treaty by virtue of section 11 of Law no. 13,202/2015.

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This publication first appeared as a Latin America Alert on www.dlapiper.com.

Several countries in Latin America have established new transfer pricing documentation obligations associated with the OECD’s Base Erosion and Profit Shifting (BEPS) initiative.

In this new year, Mexico, Colombia and Peru have included in their local legislation new documentation requirements that follow a three-tiered approach: country-by-country (CbC) report, master file, and local file. These requirements are based on the revised Chapter V of the OECD’s Transfer Pricing Guidelines for Multinational Enterprises and Tax Administration.  Below is a summary of those requirements.


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As part of the 2017 economic budget and proposed tax reform, the Mexican government intends to incentivize a couple of activities that may be intertwined: first, by allowing information technology (IT) services to qualify as an export subject to 0 percent value added tax (VAT), as opposed to the 16 percent general VAT rate; and second, by reintroducing a tax credit for research and development (R&D) activities carried out in the country.

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In the midst of a complicated fiscal situation, Puerto Rico continues to attract investors and companies through two extant tax incentive packages: Puerto Rico’s Act 20 – the Promotion of Export Services Act – and Act 22 – the Act to Promote the Relocation of Individual Investors to Puerto Rico.

Act 20 and Act 22 were enacted in Puerto Rico in 2012 to promote the exportation of services by companies and individuals providing such services from Puerto Rico and the relocation of high-net-worth individuals to Puerto Rico. Both laws aim to provide attractive incentives to encourage investors to relocate to Puerto Rico, while also encouraging local service providers to expand their businesses by offering their services to clients located outside Puerto Rico. The laws strive to contribute to the growth of the Island’s economy and, since their enactment over four years ago, have been embraced on a bipartisan basis on the Island as an important part of the government’s economic development plan.

At the heart of these incentives is Puerto Rico’s unique tax status: even though Puerto Rico is a territory of the United States (and generally subject to all US. federal laws), it is treated as a “foreign country” for US federal income tax purposes, and a special tax treatment applies to its residents. This unique situation has allowed Puerto Rico to enact tax incentives that are geared to promote its economic development and that may be attractive to US persons. These incentives promote the establishment of manufacturing operations, tourism activities, international banking operations, international insurance operations and production of films in Puerto Rico, among others.

In this alert, we summarize the tax benefits available under Act 20 and Act 22 that may be of interest to individuals and companies seeking a general understanding of the potential tax benefits of moving to or relocating all or part of their operations to Puerto Rico.


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