Brazil-Turkey Tax Guide

A newer-generation treaty: the Protocol brings technical services within Article 12, capping IRRF at 10%

The 10% technical services cap is the treaty’s most valuable feature

Under the treaty’s Protocol, payments for technical services and technical assistance are expressly brought within Article 12 (Royalties), capping Brazilian IRRF at 10% instead of the domestic 15% rate, a direct 5-percentage-point saving. This distinguishes the Brazil-Turkey treaty from older Brazilian treaties that leave technical services unaddressed.

CIDE, PIS/COFINS-Import and ISS remain outside the treaty’s scope and apply regardless of the IRRF reduction. The CSLL, though not expressly listed as a covered tax, has generally been treated as covered following Brazilian administrative and judicial developments, allowing Turkish entities to potentially claim credits for CSLL paid in Brazil.

What the Brazil-Turkey treaty covers

The treaty sets reduced withholding rates and allocates taxing rights between Turkey and Brazil. Each item operates independently; satisfying one does not remove the others.

Brazilian withholding income taxes on payments to Turkish recipients

Brazil imposes IRRF on most categories of income paid to non-resident recipients. Where the treaty provides a lower rate, that rate applies and Turkish residency certification is required.

Other Brazilian taxes that apply alongside the IRRF

How Brazilian taxes stack up on a technical services payment

The example below uses a base contract value of USD 100,000 for a technical services fee, the treaty’s flagship benefit.

Structuring considerations for Turkish investors in Brazil

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.