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Brazil: Payments for trademark use to French entity subject to withholding tax

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The Federal Brazilian tax authority (RFB) has confirmed that payments for the right to use trademarks and know-how to a French entity should be subject to income withholding tax and CIDE.

The RFB published Solução de Consulta – Cosit 180/2018 (dated September 28 2018) on October 2 2018, confirming that remittances abroad in relation to the right to use a trademark and know-how should be classified within the meaning of Article 12 of the double tax agreement between Brazil and France (DTA). As such, this transaction would be subject to withholding tax at a rate of 15%. Further, the payment should be subject to the contribution for the intervention in the economic domain (CIDE) at a rate of 10%.

The opinion confirmed the RFB’s understanding of the operation of the application of the DTA in relation to royalty payments on the right to use the trademark and know-how. More specifically, such remittances should be subject to an income withholding tax rate of 15% under the ‘catch all’ paragraph of Article 12(2)(c), the RFB stated. Similarly, the decision confirmed the application of the CIDE rules on the remittances of such royalties abroad.

While a Solução de Consulta does not represent law or a legal precedent, it does provide further support and guidance for Brazilian entities in relation to how the RFB are treating these types of remittances.


Fernando Giacobbo

Mark Conomy

Fernando Giacobbo ( and Mark Conomy (



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