Brazil-United Kingdom Tax Guide
A practical guide to the tax framework governing transactions, investments and individuals operating between Brazil and the United Kingdom.
Cross-border taxation · No double tax agreement in force · Updated 2026
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New to doing business in Brazil? Our Brazil Tax Guide covers the complete Brazilian tax system: corporate taxes, indirect taxes, employment taxes and the tax reform transition.
Brazil Tax GuideThe UK does not withhold on dividends. That is the most significant structural feature of the Brazil-UK relationship.
Brazil and the United Kingdom have no bilateral tax treaty in force. Each country taxes cross-border income under its own domestic rules, without treaty-reduced withholding, PE safe harbours, or a mutual agreement procedure. Two features of UK domestic law significantly reduce the effective double tax burden compared with other non-treaty jurisdictions: the UK imposes no dividend withholding tax, and the Substantial Shareholding Exemption may exempt gains on qualifying Brazilian shareholdings entirely.
This guide covers Brazilian withholding taxes on outbound payments, how those taxes stack on a single transaction, UK corporation tax on Brazil-sourced income (including the CFC regime), transfer pricing and structuring considerations. Brazil’s 10% IRRF on dividends under Law 15,270/2025 remains the primary withholding cost on the Brazilian side. For advice specific to your situation, contact us.
Having no DTA does not mean being double-taxed, but it does mean paying more attention
Despite the scale of UK-Brazil trade, no comprehensive tax treaty has been concluded. The consequences are more limited than they appear, because two features of UK domestic law, zero dividend withholding and the Substantial Shareholding Exemption, provide structural relief. The more significant constraint is the absence of a mutual agreement procedure: transfer pricing disputes must be resolved through domestic proceedings in each country, and only unilateral APAs are available.
The main taxes that affect cross-border operations
Each of the following arises independently in virtually every substantive Brazil-UK business relationship.
Brazilian withholding income taxes on payments to UK recipients
The UK is not on Brazil’s list of low-tax jurisdictions, so standard rates apply. With no DTA, UK recipients cannot reduce these rates.
How Brazilian taxes stack up on a single transaction
Examples use a base contract value of USD 100,000. UK corporation tax figures use a simplified 25% rate.
UK taxation of Brazil-sourced income
The UK taxes residents on worldwide income at 25% (main rate). Two reliefs are especially significant for Brazil-sourced income: the dividend exemption and the Substantial Shareholding Exemption (SSE).
Two OECD-aligned systems, no MAP
Both countries apply OECD arm’s-length rules, Brazil’s under Law 14,596/2023, the UK’s under Part 4 TIOPA 2010. Without a mutual agreement procedure, disputes between HMRC and the Federal Revenue Department cannot be resolved bilaterally; only unilateral APAs are available.
Thin capitalisation. The UK applies an earnings-stripping rule limiting net interest deductions to 30% of tax EBITDA. Brazil limits related-party interest deductions under Law 12,249/2010. Intercompany loans must satisfy both regimes simultaneously.
Structuring considerations for UK investors in Brazil
Need advice on your Brazil-UK tax structure? We can help.
The interaction of Brazilian and UK tax rules in the absence of a DTA requires careful, transaction-specific analysis.
More bilateral tax guides
All Guides →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.
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