Brazil and China: double taxation agreement explained
A practical guide for Chinese businesses, investors and advisers dealing with Brazil. What the treaty covers, what it does not, and what Brazilian taxes still apply.
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Not yet familiar with the Brazilian tax system? We recommend reading our practical guide first. It covers every major tax that may apply to cross border transactions with Brazil.
Read the GuideBrazil and China have a double taxation agreement in force but it does not eliminate Brazilian withholding taxes.
The Brazil China Convention entered into force in 1991, one of the earlier treaties in Brazil’s network, reflecting the source country taxation approach of that era. It may reduce Brazilian withholding rates for qualifying Chinese recipients but does not eliminate them.
China is Brazil’s largest trading partner and a leading source of foreign direct investment, with exposure across energy, mining, infrastructure, agribusiness and manufacturing. At the transaction sizes typical of Chinese investment in Brazil, small differences in withholding rates or credit eligibility represent substantial sums.
CIDE, ISS and IOF are generally outside the treaty’s scope. Chinese enterprises benefit from a 95% exemption on qualifying dividends from foreign subsidiaries under China’s participation exemption; Brazil’s new 10% dividend IRRF from 2026 alters that dynamic.
Although not expressly listed in the treaty text, the CSLL has generally been treated as a covered tax for treaty purposes following Brazilian administrative and judicial developments.
What the Brazil China treaty covers
What Chinese businesses need to know
Domestic vs treaty rates at a glance
Treaty may reduce the IRRF component. China may credit Brazilian tax paid subject to its per country and per category credit limits.
Treaty may reduce the IRRF rate for qualifying Chinese corporate recipients. Where China’s participation exemption applies, the Brazilian withholding is largely a final cost. Tax sparing credit may apply where Brazilian incentives reduce the effective IRRF below the treaty rate.
Questions about the Brazil China treaty? We can help.
Our team advises on Brazilian tax and treaty issues for foreign businesses and investors.
This guide is a general overview only and does not constitute legal or tax advice. Tax laws in both countries change frequently. The specific tax treatment of any transaction depends on the facts, the structure adopted and the current state of the law in each jurisdiction. Obtain specific legal and tax advice before structuring any cross-border transaction.
Brazilian lawyers for foreign companies, investors and law firms.