In relation to Brazil, the convention will apply to Income Tax (IR) and Social Contribution on Net Profit (CSLL). In Uruguay, it will apply to income tax from economic activities, personal income tax, non-resident income tax, social security assistance tax and wealth tax.
In general, the text of the convention provides for traditional provisions that aim to maintain the power to tax at the source of income, albeit not exclusively, especially with regard to technical services, technical assistance and capital gains.
The convention establishes limits on taxation gambling data pakistan at source of dividends, interest, royalties and technical services and technical assistance at levels compatible with the network of agreements already signed by Brazil.
Furthermore, the convention defines tax jurisdictions. For example, for the taxation of income obtained from real estate, there is a provision that such income may be taxed by the country where the property is located.
Regarding corporate profits, only their country of origin will be competent to tax their profits, unless they are permanently established in the other signatory country.
The agreement is seen as a way to establish greater cooperation between the tax administrations of Brazil and Uruguay, to provide an improvement in the business and investment environment between the countries, to combat abusive tax planning and to prevent tax evasion.
Conclusion
As can be seen, countries have been moving towards making the business environment more dynamic and global, enabling companies to break down territorial boundaries and develop from a more market-based and less geographic perspective.
In this sense, it is extremely important that businesspeople are aware of the new frontiers that are being created for the business environment. The global economy is increasingly guided by the formation of large economic blocs and bilateral agreements that seal the communion of their economic interests.
Therefore, this dynamic of treaties that impact business, especially in relation to tax aspects, deserves special attention. Thus, professional support is essential, even so that these updates are always on the radar of companies, otherwise great opportunities for business expansion may go unnoticed.