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Note: This Treaty may be impacted by the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI). MLI impact on Tax Treaties is available with the Orbitax International Tax Research & Compliance Expert.

PROTOCOL

At the moment of the signature of the Convention between the Federative Republic of Brazil and the United Arab Emirates for the Elimination of Double Taxation with Respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance, the undersigned, duly authorised thereto, have agreed upon the following provisions which constitute an integral part of the Convention.

(1) With reference to Article 4:

  • (a) It is understood that the status of a company as a resident of the United Arab Emirates is conditional on confirmation by the competent authority of the United Arab Emirates, through a certificate of residence, that the conditions mentioned in sub-paragraph (b) of paragraph (1) of Article 4 have been fulfilled, and the acceptance of such confirmation by the competent authority of Brazil. In case of disagreement between the competent authorities of the two Contracting States regarding the fulfilment of such conditions, the procedures under Article 27 shall be applied.
  • (b) If the authorities of either Contracting States have evidence which casts doubt on the statements which have been made by the person to whom the income is allocable and which have been confirmed by the competent authority of the other Contracting State, the competent authorities of the Contracting States shall enter into mutual agreement procedure in order to check the information presented by such person. In the absence of a mutual agreement, such person shall not be entitled to any benefits provided by this Convention (other than a benefit under Article 27).
  • (c) It is understood that wholly government-owned investment entities may be considered government institutions within the meaning of sub-paragraph (b) of paragraph (2) of Article 4, subject to the conditions stated therein. In the case of the United Arab Emirates, the following investment entities shall be considered government institutions:
    • (i) Abu Dhabi Investment Authority;
    • (ii) Mubadala Investment Company;
    • (iii) Investment Corporation of Dubai;
    • (iv) Emirates Investment Authority; and
    • (v) other investment entities, as may be agreed from time to time by the competent authorities of the Contracting States.

The competent authority of United Arab Emirates shall notify the competent authority of Brazil if an investment entity mentioned above no longer meets the criteria provided for in sub-paragraph (b) of paragraph 2 of Article 4.

(2) With reference to Articles 4 and 29:

With respect to the United Arab Emirates, it is understood that regardless of the interposing of companies, persons or entities, ultimately only individuals being residents of the United Arab Emirates, the United Arab Emirates, a political subdivision or local government thereof or a government institution of the United Arab Emirates should enjoy the benefits of this Convention.

(3) With reference to Article 8:

It is understood that paragraph (3)(d) of Article 8 applies to interest on funds temporarily deposited and which constitute an integral part of the operation of ships or aircrafts in international traffic.

(4) With reference to Articles 10 and 11:

It is understood that the benefits provided for in paragraph (2)(a) of Article 10 and paragraph (4) of Article 11 shall also apply to income derived by a company resident of the United Arab Emirates whose capital is beneficially owned, directly or indirectly, exclusively by the United Arab Emirates and/or by a government institution or entity of the United Arab Emirates and/or a political subdivision or local government thereof, provided that such ownership is stated in the certificate of residence of the company.

The competent authority of United Arab Emirates and the aforementioned company shall notify the competent authority of Brazil, any commercial partner and other interested companies or entities in Brazil if such resident no longer meets the criteria provided for in this paragraph.

(5) With reference to Article 11:

It is understood that, in the case of Brazil, interest paid as "interest on the company's equity" ("juros sobre o capital próprio" in Portuguese) in accordance with the Brazilian law is also considered interest for the purposes of paragraph (3) of Article 11.

(6) With reference to Article 12:

It is understood that the provisions of paragraph (3) of Article 12 shall apply to payments of any kind received as consideration for the rendering of technical assistance.

(7) With reference to Article 17:

It is understood that, in the case of Brazil, the provisions of Article 17 apply also to members of the administrative and fiscal councils established under Chapter XII, Section I, and Chapter XIII, respectively, of the Brazilian Corporate Law (Law n. 6,404, of 15 December 1976, as amended).

(8) With reference to Article 26:

  • (a) It is understood that the provisions of paragraph (5) of Article 10 are not in conflict with the provisions of paragraph (2) of Article 26.
  • (b) It is understood that the provisions of the tax law of a Contracting State that do not allow that royalties as defined in paragraph (3) of Article 12, paid by a permanent establishment situated therein to a resident of the other Contracting State that carries on business in the first-mentioned State through such a permanent establishment, be deductible at the moment of the determination of the taxable income of the above referred permanent establishment, are not in conflict with the provisions of paragraphs (2) and (3) of Article 26.

(9) With reference to Article 27:

For purposes of paragraph (3) of Article XXII (Consultation) of the General Agreement on Trade in Services, the Contracting States agree that, notwithstanding that paragraph, any dispute between them as to whether a measure falls within the scope of this Convention may be brought before the Council for Trade in Services, as provided by that paragraph, only with the consent of both Contracting States. Any doubt as to the interpretation of this paragraph shall be resolved under paragraph (3) of Article 27 or, failing agreement under that procedure, pursuant to any other procedure agreed to by both Contracting States.

(10) With reference to Article 28:

With respect to the last sentence of paragraph (2) of Article 28, it is understood that the use of information for other purposes is subject to prior and written consent of the competent authority of the State providing the information.

(11) With reference to Article 29:

  • (a) It is understood that the provisions of paragraph (1) of Article 29 shall not take into account government exemption given by the United Arab Emirates to wholly government-owned, directly or indirectly, investment entities and resident companies.
  • (b) It is understood that the provisions of the Convention shall not prevent a Contracting State from applying its domestic legislation aimed at countering tax evasion and avoidance, including provisions of its tax law regarding "thin capitalisation" or to avoid the deferral of payment of the income tax such as the "controlled foreign corporations/CFCs" legislation or any similar legislation.

IN WITNESS WHEREOF, the undersigned, duly authorised thereto, have signed this Convention.

DONE in duplicate at Brasilia, this 12 day of November 2018, in Portuguese, Arabic and English languages, all texts being equally authentic. In case of divergence of interpretation, the English text shall prevail.

FOR THE FEDERATIVE REPUBLIC OF BRAZIL:

ALOYSIO NUNES FERREIRA

MINISTER OF FOREIGN AFFAIRS

FOR THE UNITED ARAB EMIRATES:

HAFSA ABULLA MOHAMED SHARIF ALULAMA

AMBASSADOR EXTRAORDINARY AND PLENIPOTENTIARY