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Legal Guides / Bilateral Tax

Brazil and Ukraine: double taxation agreement explained

A practical guide for Ukrainian businesses, investors and advisers dealing with Brazil. What the treaty covers, what it does not, and what Brazilian taxes still apply.

Brazil and Ukraine have a double taxation agreement in force, but it does not eliminate all Brazilian taxes.

The Brazil-Ukraine treaty allocates taxing rights on income such as dividends, interest, royalties and capital gains. It may reduce the Brazilian withholding rate below the domestic rate of 15% or 25% for qualifying recipients. However, CIDE, ISS and IOF are generally outside the treaty’s scope and continue to apply under Brazilian domestic law.

Ukraine businesses dealing with Brazil often encounter a multi-layered tax stack even where the treaty applies. Classification of the payment, whether it is a service fee, royalty or dividend, determines which treaty article applies and which Brazilian domestic taxes remain in place. Beneficial ownership and substance requirements must also be satisfied to access treaty benefits.

Treaty Analysis

What the Brazil-Ukraine treaty covers

The treaty sets reduced withholding rates and allocates taxing rights between Ukraine and Brazil. The main issues for Ukraine businesses dealing with Brazil are set out below.

Dividends

From 1 January 2026, Brazil imposes a 10% IRRF on dividends paid to non-residents. The treaty may reduce or cap this for qualifying Ukraine recipients depending on shareholding thresholds and beneficial ownership.

Interest

The treaty typically reduces Brazilian withholding on interest below the domestic 15% rate. Confirm the applicable treaty rate and the beneficial ownership status of the recipient.

Royalties

Royalties from Brazil attract IRRF plus CIDE (10%). The treaty may reduce the IRRF component. CIDE is generally outside the treaty’s scope and continues to apply.

Technical services

Technical service fees from Brazil to Ukraine may attract IRRF, CIDE, PIS/COFINS-Import and ISS. The treaty may reduce IRRF but typically does not eliminate the other levies.

Capital gains

Brazil generally retains the right to tax gains from the sale of shares in Brazilian companies. Domestic progressive rates (15% to 22.5%) apply unless the treaty provides otherwise.

Beneficial ownership and substance

Treaty benefits require the Ukraine recipient to be the beneficial owner of the income and to satisfy any anti-abuse provisions in the treaty and Brazilian domestic law.

Treaty analysis is fact-specific. The applicable rate depends on the nature of the income, the relevant treaty article, the transaction structure and the residence and substance of the recipient. Confirm before pricing.

Practical Issues

What Ukraine businesses need to know

CIDE is not covered by the treaty

CIDE at 10% applies to royalties, technology transfers and certain services regardless of the treaty, borne by the Brazilian payer.

ISS is municipal

ISS at 2%-5% is set by each municipality and is outside the treaty’s scope. It must be verified for each transaction and location.

IOF on wire transfers

IOF at 0.38% applies to wire transfer remittances and is not reduced by the treaty.

Classification is decisive

Whether a payment is a royalty, service fee or dividend determines which treaty article applies and which Brazilian taxes remain. Invoice wording and contract classification matter.

The Brazilian payer withholds

The Brazilian company making the payment is responsible for withholding and remitting IRRF at the correct rate. Errors create liability for the payer.

Price with the full tax stack in mind

Brazilian taxes can add 25%-40% to a cross-border payment. Confirm the treaty position and full domestic tax stack before agreeing a commercial price.

Indicative Rates

Domestic vs treaty rates at a glance

IRRF on services (indicative)

Domestic rate (no treaty)15%

CIDE (treaty does not reduce)10%

PIS/COFINS-Import9.25%

ISS2%-5%

Indicative stack (domestic)~29%-39%+

Treaty may reduce the IRRF component. Confirm the applicable article and rate before pricing.

IRRF on royalties (indicative)

Domestic rate (no treaty)15%

CIDE (not covered by treaty)10%

IOF on wire transfer0.38%

Indicative stack (domestic)~25%+

Treaty may reduce IRRF. CIDE and IOF remain regardless of treaty.

Deffenti Lawyers

Questions about the Brazil-Ukraine treaty? We can help.

Our team advises on Brazilian tax and treaty issues for foreign businesses and investors. Contact us before finalising pricing or structure.

More bilateral tax guides

All Guides →

Brazil Tax Guide

Brazil-Denmark Tax Treaty

Brazil-Netherlands Tax Treaty

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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