Double Tax Treaty Brazil X France

Date of Conclusion: 10 September 1971
Effective Date: 1 January 1973

CONVENTION BETWEEN THE FEDERATIVE REPUBLIC OF BRAZIL AND THE REPUBLIQUE OF FRANCE FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME.

The President of the Federative Republic of Brazil, and

The President of the Republic of France

Desiring to avoid as far as possible the double taxation and to prevent fiscal evasion with respect to taxes on income,

Have agreed as follows:

ARTICLE I

Persons scope

This Convention shall apply to persons who are residents of one or both of the Contracting States.

ARTICLE II

Taxes covered

1. The existing taxes to which this Convention shall apply are:

a) in the case of Brazil:

– the federal income tax, excluding the tax on excess remittances and on activities of minor importance;

(hereinafter referred to as “Brazilian tax”);

b) in the case of France:

– the income tax;

– the Corporate income tax, including any withhold taxes or prepayments (“précompte”) relating to the taxes mentioned above

(hereinafter referred to as “French tax”).

2. The Convention shall also apply to any identical or substantially similar future taxes that are imposed in addition to, or in place of., the existing taxes.

ARTICLE III

General definitions

1. In this Convention:

a) the term “Brazil” means the Federative Republic of Brazil;

b) the term “France” means the European and overseas Departments (Guadeloupe, Guyane, Martinique and Reunion) of the French Republic, including any area outside the territorial sea of France which is, in accordance with international law, an area within which France may exercise rights with respect to the seabed and subsoil and their natural resources;

c) the terms “a Contracting State” and “the other Contracting State” mean Brazil or France, as the context requires;

d) the term “person” includes an individual, a company and any other body of persons;

e) the term “company” means any body Corporate or any entity that is treated as a body Corporate for tax purposes;

f) the terms “enterprise of a Contracting State” and “enterprise of the other Contracting State” mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State;

g) the term “competent authority” means:

I – in Brazil: the Minister of Finance, the Secretary of Federal Revenue or their authorized representatives;

II – in France: the Minister of Economy and Finance or his authorized representative.

2. As regards the application of the Convention by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning that it has under the law of that Contracting State relating the taxes to which the Convention applies.

ARTICLE IV

Fiscal domicile

1. For the purposes of this Convention, the term “resident of a Contracting State” means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature.

2. Where by reason of the provision of paragraph l an individual is a resident of both Contracting States, then his status shall be determined in accordance with the following rules:

a) he shall be deemed to be a resident of the State in which he has a permanent home available to him. If he has a permanent home available to him in both Contracting States, he shall be deemed to be a resident of the State with which his personal and economic relations are closest (center of vital interests);

b) if the State in which he has his center of vital interests cannot be determined, or if he has not a permanent home available to him in either Contracting State, he shall be deemed to be a resident of the State in which he has an habitual abode;

c) if he has an habitual abode in both Contracting States or in neither of them, he shall be deemed to be a resident of the Contracting State of which he is a national;

d) if he is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.

2. Where by reason of the provisions of paragraph l a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident of the Contracting State in which its place of effective management is situated.

ARTICLE V

Permanent establishment

1. For the purposes of this Convention, the term “permanent establishment” means a fixed place of business through which the business of an enterprise is wholly or partly carried on.

2. The term “permanent establishment” includes especially:

a) a place of management;

b) a branch;

c) an office;

d) a factory;

e) a workshop;

f) a mine, a quarry or any other place of extraction of natural resources;

g) a building site or assembly project which exists for more than six months.

3. The term “permanent establishment” shall not be deemed to include:

a) the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise;

b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery;

c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;

d) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting information, for the enterprise;

e) the maintenance of a fixed place of business solely for the purpose of advertising, for the supply of information, for scientific research any other similar activity of a preparatory or auxiliary character, for the enterprise.

4. A person acting in a Contracting State on behalf of an enterprise of the other Contracting State – other than an agent of an independent “status” to whom paragraph 5 applies – shall be deemed to be a “permanent establishment” in the first-mentioned State if he has, and habitually exercises in that State, an authority to conclude contracts in the name of the enterprise, unless his activities are limited to the purchase of goods or merchandise for the enterprise.

5. An insurance company of a Contracting State shall be deemed as having a permanent establishment in the other Contracting State as from the moment that, through a representative, such a company receives premiums in the territory of that other Contracting State or insures risks therein.

6. An enterprise of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business.

7. The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other.

ARTICLE VI

Income from immovable property

1. Income from immovable property may be taxed in the Contracting State in which such property is situated.

2. a) The term “immovable property” shall have the meaning which it has under the law of the Contracting State in which the property in question is situated.

b) the term “immovable property” shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources; ships, boats and aircraft shall not be regarded as immovable property.

3. The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immovable property.

4. The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of professional services.

ARTICLE VII

Business profits

1. The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that permanent establishment.

2. Where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities, under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment.

3. In determining the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the permanent establishment, including executive and general administrative expenses so incurred.

4. No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.

5. Where profits include items of income which are dealt with separately in other Articles of this Convention, then the provisions of those Articles shall not be affected by the provisions of this Article.

ARTICLE VIII

Shipping and air transport

1. Profits from the operation of ships or aircraft in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.

2. If the place of effective management of a shipping enterprise is aboard a ship, then it shall be deemed to be situated in the Contracting State in which the home harbor of the ship is situated, or, if there is no such home harbor, in the Contracting State of which the operator of the ship is a resident.

ARTICLE IX

Associated enterprises

Where:

a) an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, or

b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State,

and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly.

ARTICLE X

Dividends

1. Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State.

2. However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State, but the tax so charged shall not exceed 15 per cent of the gross amount of the dividends.

3. a) The dividends paid by a company who is a resident of France, which would entitle a tax credit (“avoir fiscal”) if they were received by an individual who has his actual residence or social seat in France, shall entitle, when paid to beneficial owners who are residents of Brazil, to a gross payment, by the French Treasury, equal to such credit (“avoir fiscal”), subject to the deduction provided for in paragraph 2 above.

b) The provisions of subparagraph (a) shall be applicable to the following beneficiaries which are residents of Brazil:

i) individuals subject to Brazilian tax on the total amount of dividends distributed by a company which is a resident of France, and on the gross amount referred to in subparagraph (a);

ii) companies subject to Brazilian tax on the total amount of dividends distributed by a company which is a resident of France, and on the amount referred to in subparagraph (a).

4. Unless he is not a beneficial of the prepayment (“précompte”) provided for in paragraph 3, a person resident of Brazil who receives dividends distributed by a company resident of France is entitled to the refund of the prepayment (“précompte”) with respect to such dividends, paid, in such a case, by the company making the distribution.

5. a) The term “dividends” as used in this Article means income from shares, “jouissance” shares or “jouissance” rights, mining shares, founders’ shares or other rights, not being debt-claims, participating in profits, as well as income from other Corporate rights assimilated to income from shares by the taxation laws of the State of which the company making the distribution is a resident.

(b) The “avoir fiscal” payment provided for in paragraph 3, and the gross sums paid as a refund of the prepayment referred to in paragraph 4 shall also be deemed to be dividends paid by a company which is resident in France.

6. The provisions of paragraph 2 shall not affect the taxation of a company with respect to the income giving rise to the distributed dividends.

7. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident through a permanent establishment situated therein, and the holding by virtue of which the dividends are paid is effectively connected with such a permanent establishment. In such a case the provisions of Article VII shall apply.

8. a) Where a company which is a resident of Brazil has a permanent establishment in France, such a permanent establishment may be subject to a tax withheld at source in accordance with the French internal law, however, such a tax shall be calculated according to the rate provided in paragraph 2 of Article X, on a base corresponding to 2/3 of the profits of that permanent establishment determined after the payment of the Corporate income tax related to such profits.

b) Where a company which is a resident of France has a permanent establishment in Brazil, such a permanent establishment may be subject to a tax withheld at source in accordance with Brazilian internal law, however, such a tax shall not exceed 15 per cent of the gross amount of the profits of that permanent establishment determined after the payment of the Corporate income tax related to such profits.

9. The limitations on the tax rate provided for paragrah 2 and subparagraph “b” of paragraph 8 above, shall not apply to profits which are paid or transferred before the expiration of the third calendar year following the year of signature of this Convention.

ARTICLE XI

Interest

1. Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

2. However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, but the tax so charged shall not exceed 15 per cent of the gross amount of the interest.

3. Notwithstanding the provisions of paragraph 2:

a) interest from loans or credit granted by the Government of a Contracting State shall be exempt from tax in the Contracting State in which the interest arises;

b) the tax rate may not exceed 10 per cent on interest from loans and credits granted for a minimum period of 7 years by banking establishments with participation from public bodies of specialized financing which are tied to the sale of equipment, or to the study, installation or supplying of industrial or scientific complexes, as well as public works.

4. The term “interest” as used in this Article means income from Governement securities, bonds or debentures, whether or not secured by mortgage and whether or not carrying a right to participate in profits and debt-claims of every kind as well as other income assimilated to income from money lent by the tax law of the Contracting State in which the income arises.

5. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises through a permanent establishment situated therein and the debt-claim in respect of which the interest is paid is effectively connected. In such a case the provisions of Article VII shall apply.

6. The tax rate limitation provided for in paragraphs 2 and 3 shall not apply to interest arising in a Contracting State and paid to a permanent establishment of an enterprise of the other Contracting State which is situated in a third State.

7. Interest shall be deemed to arise in a Contracting State when the payer is that State itself, a political subdivision, a local authority or a resident of that State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such a permanent establishment, then such interest shall be deemed to arise in the State in which the permanent establishment is situated.

8. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the interest, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such a case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention.

ARTICLE XII

Royalties

1. Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

2. However, such royalties may also be taxed in the Contracting State in which they arise and according to the laws of that State, but the tax so charged shall not exceed:

a) 10 percent of the gross amount of “royalties” arising whether from the use or the right to use literary, artistic or scientific works, or from the use or the right to use cinematograph films, as well as films or tapes for television or radio broadcasting, as long as such films or tapes are produced by a resident of one of the Contracting States;

b) 25 per cent of the gross amount of the royalties arising from the use trade marks;

c) 15 per cent in all other cases.

3. The term “royalties” as used in this Article means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work, including cinematograph films, any patent, trade mark, design or model, plan, secret formula or process, or for the use of, or the right to use, industrial, commercial, or scientific equipment, or for information concerning industrial, commercial or scientific experience.

4. Royalties shall be deemed to arise in a Contracting State when the payer is that State itself, a political subdivision, a local authority or a resident of that State. Where, however, the person paying the royalties, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment in connection with which the obligation to pay the royalties was incurred, and such royalties are borne by such a permanent establishment, then such royalties shall be deemed to arise in the State in which the permanent establishment is situated.

5. The provisions of paragraphs 1 and 2 shall not apply if the recipient of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise through a permanent establishment situated therein, and the right or property in respect of which the royalties are paid is effectively connected. In such a case the provisions of Article VII shall apply.

6. Where, by reason of a special relationship between the payer and the recipient or between both of them and some other person, the amount of the royalties, having regard the services rendered for which they are paid, exceeds the amount which would have been agreed upon by the payer and the recipient in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such a case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention.

ARTICLE XIII

Capital gains

1. Gains from the alienation of immovable property referred to in paragraph 2 of Article VI, or from the alienation of shares or similar interests of a corporation whose assets consist principally of immovable property, shall be taxed in the Contracting State in which such property is situated.

2. Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State, including such gains from the alienation of such a permanent establishment (alone or with the whole enterprise), may be taxed in that other State. However, gains derived from the alienation of ships or aircraft operated in international traffic or movable property pertaining to the operation of such ships or aircraft shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated

3. Gains from the alienation of any property or right other than those referred to in paragraphs 1 and 2, may be taxed in either Contracting States.

ARTICLE XIV

Independent personal services

1. Income derived by a resident of a Contracting State in respect of professional services or other independent activities of a similar character shall be taxable only in that State, unless the remuneration is paid by a permanent establishment or a company situated therein. In a such case, the income may also be taxed in that other State.

2. The term “professional services” includes especially independent scientific, technical, literary, artistic, educational or teaching activities as well as the independent activities of physicians, lawyers, engineers, dentists and accountants.

ARTICLE XV

Dependent personal services

1. Subject to the provisions of Articles XVI, XVIII, and XIX, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.

2. Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if:

a) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in any twelve month period commencing or ending in the fiscal year concerned, and

b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State, and

c) the remuneration is not borne by a permanent establishment or by a fixed base which the employer has in the other State.

3. Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised aboard a ship or aircraft operated in international traffic may be taxed in the Contracting State in which the place of effective management of the enterprise is situated.

ARTICLE XVI

Diretors’ fees

Directors’ fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors or of a supervisory board of a company which is a resident of the other Contracting State may be taxed in that other State.

ARTICLE XVII

Artistes and sportmen

Notwithstanding the provisions of Articles XIV and XV, income derived by public entertainers, such as a theatre, motion picture, radio or television artistes, and musicians, and by a sporstman, from their personal activities as such may be taxed in the Contracting State in which these activities are exercised.

ARTICLE XVIII

Pensions

1. Subject to the provisions of paragraph 1 of Article XIX, pensions and similar remuneration paid to a resident of a Contracting State in consideration of past employment, may be taxed only in that State.

2. Alimony and annuities paid to a resident of a Contracting State shall be taxable only in that Contracting State.

3. The term “annuity”, as used in this Article, means a stated sum payable periodically at stated times, during life or during a specified or ascertainable period of time, under an obligation to make the payments in return for adequate and full consideration in money or money’s worth.

4. The term “pensions”, as used in this Article, means periodic payments made after retirement in consideration of past employment or by way of compensation for injuries received in connection with past employment.

ARTICLE XIX

Public remuneration

1. Remuneration, including pensions, paid by, or out of funds created by, a Contracting State, a political subdivision or local authorities thereof, or a public establishment of that State, either directly or through funds created by them, to an individual relating to services rendered to that State, subdivision, local authority or public establishment thereof to an individual in respect of functions of a governmental nature may be taxable only in that State.

However, such provision shall not be applied if the remuneration is granted to an individual who is a national of that other State.

2. The provisions of Articles XV, XVI and XVIII shall apply to remuneration or pensions, in respect of services rendered in connection with any trade or business carried on by a Contracting State, political subdivision, local authority or public establishment thereof.

ARTICLE XX

Teachers

An individual who is a resident of a Contracting State at the beginning of his stay in the other Contracting State, and who is present in that other Contracting State at the invitation of the Government of the other Contracting State, or of a university or another institution of learning or of research officially recognized by that other State, solely for the purpose of teaching or carrying out research, or both, shall be exempted from tax in that State for a period not exceeding two years from the date of his arrival in the mentioned State, relating to income received for such teaching or research activities.

ARTICLE XXI

Students

1. Payments which a student or business apprentice who is or was immediately before visiting a Contracting State a resident of the other Contracting State and who is present in the first-mentioned State solely for the purpose of his education or training receives for the purpose of his maintenance, education or training shall not be taxed in that State, provided that such payments arise from sources outside that State.

The same applies to remuneration received by a student or business apprentice in consideration for employment exercised in the Contracting State where he carries on his studies or training, as long as that remuneration is strictly necessary for his maintenance.

2. A student attending a university or another establishment of higher education or technical training of a Contracting State who takes up employment in the other Contracting State solely for the purpose of obtaining practical training in connection with his studies shall not be subject to tax in the last-mentioned State in respect of remuneration paid in connection with that employment, provided that the said employment does not last more than two years.

ARTICLE XXII

General rules of taxation

Double taxation shall be avoided as follows:

1) In the case of Brazil:

Where a resident of Brazil derives income which, in accordance with to its internal law, may be taxed in Brazil, and that income is taxed in France in accordance with the provisions of this Convention, Brazil shall allow, as a deduction from its tax an amount equal to the tax paid in France.

Such deduction shall not, however, exceed that part of the Brazilian tax which is appropriate to that income.

2) In the case of France:

a) income other than referred to in subparagraphs “b” and “c” shall be exempt from the French taxes mentioned in Article II, paragraph 1, “a”, when such income is taxed in Brazil according the provisions of this Convention.

b) dividends which a corporation resident of France receives from a corporation which is resident of Brazil, in which the former corporation has a participation of at least 10 percent of the capital, and which have been subject to tax in Brazil by virtue of this Convention, shall not be subject to the French tax on their gross amount, but instead on a pro-rata share of the expenses limited to 5 percent of the gross amount.

c) as regards income referred to in Articles X, XI, XII, XIII, XIV, XVI, and XVII which has borne Brazilian tax in accordance with the provisions of those Articles, France shall grant to its residents receiving such income deriving from arrive in Brazil a tax credit corresponding to the tax paid in Brazil, within the limits which the French tax establishes in such income.

d) as regards income referred to in Articles X, XI and paragraph 2, “c” of Article XII, the Brazilian tax shall be considered as being levied at a minimum rate of 20 percent.

e) notwithstanding the provisions of subparagraph “a”, the French tax may be calculated on the income taxable in France in accordance with this Convention at a rate corresponding to the total amount of income which would be taxable under French law.

ARTICLE XXIII

Terms of application

The competent authorities of the Contracting States shall, in common agreement, issue regulations on the terms of application of the present Convention.

ARTICLE XXIV

Non-discrimination

1. Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connnected requirements to which nationals of that other Contracting State in the same circumstances are or may be subjected.

2. The term “national” means:

a) any individual possessing the nationality of a Contracting State;

b) any legal person, partnership or association deriving its status as such from the laws in force in a Contracting State;

3. The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favorably levied in that other Contracting State than the taxation levied on enterprises of that Contracting State carrying on the same activities

These provisions shall not be construed as obliging a Contracting State to grant to residents of the other Contracting State any personal allowances, relief and reductions for taxation purposes on account of civil status or family responsibilities which it grants to its own residents.

4. Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of the first-mentioned State are or may be subjected.

5. In this Article, the term “taxation” means taxes of every kind and description.

ARTICLE XXV

Mutual agreement procedure

1. Where a resident of a Contracting State considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with the provisions of this Convention, he may, irrespective of the remedies provided by the domestic law of those States, present his case to the competent authority of the Contracting State of which he is a resident.

2. The competent authority shall endeavor, if the objection appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation which is not in accordance with the Convention.

3. The competent authorities of the Contracting States shall endeavor to resolve by mutual agreement any difficulties or doubts arising as to the application of the Convention. They may also consult together for the elimination of double taxation in cases not provided for in the Convention.

4.The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs. When it seems advisable in order to reach an agreement to have an oral exchange of opinions, such exchange may take place through a commission consisting of representatives of the competent authorities of the Contracting States.

ARTICLE XXVI

Exchange of information

1. The competent authorities of the Contracting States shall exchange such information as is necessary for carrying out the provisions of this Convention and of the domestic laws of the Contracting States concerning taxes covered by the Convention insofar as the taxation thereunder is in accordance with the Convention. Any information so exchanged shall be treated as secret and shall only be disclosed to persons or authorities concerned with the assessment or collection of the taxes which are the subject of this Convention.

2. In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting State the obligation:

a) to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State;

b) to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State;

c) to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy (public order).

ARTICLE XXVII

Diplomatic officials and international organizations

1. The provisions of this Convention shall not affect the fiscal privileges of members of diplomatic missions or consular posts under the general rules of international law or under the provisions of special agreements.

2. The Convention shall not apply to international organizations, to organs or officials thereof and to persons who are members of a diplomatic or consular mission of a third State, being present in a Contracting State and which are not considered residents of one or the other Contracting State in respect of taxes on income and capital.

ARTICLE XXVIII

Area of application and territorial extension

1. The scope of application of the present Convention may be extended by means of an agreement between the Contracting States by exchange of diplomatic notes, or any other procedure in keeping with their respective constitutional provisions.

2. Unless both Contracting States agreed otherwise, the termination of the Convention by one of the Contracting States under the provisions of Article XXX shall also terminate the application of the Convention to any territory to which it has been extended under this Article.

ARTICLE XXIX

Entry into force

1. This Convention shall be ratified and the instruments of ratification shall be exchanged in Paris as soon as possible.

2. The Convention shall enter into force thirty days after the date of exchange of the instruments of ratification and its provisions shall have effect for the first time:

a) in respect of taxes withheld at source, the fact giving rise to them appearing on January 1st of the calendar year next following that in which the Convention enters into force;

b) in respect of other taxes on income arising on January 1st of the calendar year next following that in which the Convention enters into force.

ARTICLE XXX

Termination

This Convention shall remain in force indefinitely. However, either Contracting State may denounce the Convention, through diplomatic channels, by giving notice of termination six months before the end of a calendar year as of the third year after its entry into force.

In such a case the Convention shall apply for the last time:

a) in respect of taxes withheld at source, the fact giving rise to them appearing before the end of the calendar year during which the notice is given;

b) in respect of other taxes on income, as to income relating to the calendar year in which the denunciation is notified and to the tax ears ending during that year.

In witness whereof the Plenipotentiaries of the two States have signed this Convention and have affixed thereto their seals.

Done, in duplicate, in Brasilia on the 10th day of September, 1971, in the Portuguese and in the French languages, both texts being equally authentic.

P R O T O C O L

At the moment of the signature of the Convention for the avoidance of double taxation between the Federative Republic of Brazil and the Republic of France, the undersigned plenipotentiaries have agreed upon the following provisions:

1. For the application of subparagraph “b”, paragraph 3 of Article XI:

a. loans and credits granted by the French Foreign Trade Bank, acting in its capacity as public financing body, shall be treated as loans and credits granted by the French Government, as provided for by subparagraph “a” of the same paragraph;

b. it is understood that the minimum period of seven years shall begin on the date of the financing contract, as it has been approved by the authorities of the State of the beneficiary.

2. The provisions of Article XX shall apply to experts and technicians who are placed at the disposition of one of the States by the other State pursuant to the Technical and Scientific Cooperation Agreement concluded between both countries on January 16, 1967.


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