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Brazil Publishes Ruling that Insurance Premiums Treated as Business Profits Under Tax Treaty with Norway — Orbitax Tax News & Alerts

Brazil has published Ruling No. 138 of 20 September 2021 regarding the treatment of insurance premiums paid for insuring maritime vessels and equipment by a company in Brazil to a company in Norway under the 1980 Brazil-Norway tax treaty, given that such payments are not specifically addressed in the treaty. While it was considered whether insurance premium payments may qualify as payments for technical assistance or services, and generally taxable as royalties, the ruling provides that the premium payments must be considered business profits. As such, they fall under Article 7 (Business Profits) of the treaty and, because the Norwegian company does not have a permanent establishment in Brazil, the insurance premium payments are only taxable in Norway and not subject to withholding tax (IRRF) in Brazil.