Dow Jones | Tuesday December 9th, 2008
Brazil, US Draw Nearer To Bilateral Tax Treaty
By Tom Murphy, Dow Jones
SAO PAULO -(Dow Jones)- Brazil and the United States are closer than ever to signing a bilateral tax treaty, although a similar accord to protect investments in the two countries is a bit further off, officials of both countries said Tuesday.
"We’re not going to sign a tax treaty tomorrow, but we have made considerable progress," said Bill Block, U.S. Treasury attache to the American embassy in Brazil. "Both sides have shown considerable willingness to be flexible."
Brazil’s ambassador to the U.S., Antonio de Aguiar Patriota, said negotiations on the tax treaty and related issues were continuing "within an environment of much greater bilateral coordination than before."
Block and Patriota spoke in Sao Paulo at the annual meeting of the Brazil-United States Business Council, which represents major companies from both countries.
Bilateral tax treaties protect multinational companies from dual taxation when they conduct business in the two countries signing the treaty.
Thomas Catania, co-chairman of the council, said Brazil is the largest U.S. trading partner without a bilateral tax treaty with it. He said such treaties are crucial to boosting bilateral investment.
A bilateral investment protection treaty, which offers broader guarantees for the safety of investments in signatory countries, may be "a little further off," said U.S. Ambassador to Brazil Clifford Sobel. He urged the Brazilian government, in particular, to take a closer look at such a treaty.
"Brazil competes for investment just like other countries do," said Sobel. "A tax treaty and an investment treaty will help attract investments."