INTERNATIONAL TAX PLAZA - Switzerland and Brazil sign a TIEA

The Swiss Federal Department of Finance has issued a press release announcing that on November 23, 2015 Switzerland and Brazil signed a Tax Information Exchange Agreement (TIEA). Although signed, the TIEA has not yet entered into force. For the TIEA to enter into force, the respective ratification procedures have to have been finalized in both countries.

The TIEA arranges for the Exchange Of Information Upon Request.

Below we will discuss a selection of regulations included in the TIEA of which we think they might interest our readers.

According to Article 3, Paragraph 1 of the TIEA (“Taxes Covered”), the taxes which are the subject of this Agreement are:

a) in Switzerland,

i) the federal, cantonal and communal taxes on income (total income, earned income, income from capital, industrial and commercial profits, capital gains, and other items of income);

ii) the federal, cantonal and communal taxes on capital;

iii) the cantonal and communal inheritance and gift taxes;

b) in Brazil,

i) the individual and the corporate income tax (IRPF and IRPJ, respectively);

ii) the industrialized products tax (IPI);

iii) the financial transactions tax (IOF);

iv) the rural property tax (ITR);

v) the contribution for the program of social integration (PIS);

vi) the social contribution for the financing of social security (COFINS);

vii) the social contribution on net profits (CSLL); and

viii) any other taxes administered by the Secretariat of the Federal Revenue of Brazil.

Article 3, Paragraph 2 of the TIEA subsequently arranges that the TIEA shall apply to any identical taxes imposed after the date of signature of the TIEA in addition to or in place of the existing taxes. It furthermore arranges that the TIEA shall also apply to any substantially similar taxes imposed after the date of signature of the TIEA in addition to or in place of the existing taxes if the competent authorities of the Contracting Parties so agree.

Article 5 of the TIEA contains regulations regarding the Exchange of Information upon Request.

The TIEA doesn’t contain an article regarding the possibility to conduct Tax Examinations Abroad.

Article 10 of the TIEA contains regulations regarding a Mutual Agreement Procedure.

In the press release the Swiss Federal Department of Finance states that Switzerland will also be permanently removed from Brazil's blacklist of countries with an insufficient exchange of tax-related information.

Click here to be forwarded to the (English) text of the TIEA as available on the website of the Swiss Federal Department of Finance, which will open in a new window.

Stay informed: Subscribe to International Tax Plaza’s Newsletter! It’s completely FREE OF CHARGE!

and

Follow International Tax Plaza on Twitter (@IntTaxPlaza)