The tax authorities issued Private Ruling 501 of 2017 to confirm that remittances to beneficiaries domiciled in France as consideration for technical services are not subject to Withholding Income Tax (WHT). This decision is based on the Brazil-France Double Taxation Treaty. Most double taxation treaties signed by Brazil stipulate that Withholding Income Tax is levied on technical services, which are classified as royalties. The Treaty signed with France, however, has a more limited scope and classifies technical services as business profits.
Technical services imported from France are still subject to the 10% CIDE and, in most cases, the 9.25% PIS/COFINS and ISS, ranging from 2% to 5%.
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