The U.K. and Brazil signed a double taxation convention on 29 November 2022.1 This follows an earlier announcement that negotiations would be taking place during September 2022.2
The treaty is not yet in force; this will only occur once both countries have completed the procedures required by their domestic law to bring the convention into force, which could be a matter of months (or even years).
The U.K. has an extensive network of double taxation treaties, however, Brazil represented one of the major jurisdictions where there was a gap in that network. Businesses and professional bodies have previously stated to HMRC’s Tax Treaty Team that agreeing a double taxation treaty with Brazil should be one of their main priorities.3 As such, the announcement that a treaty has been agreed, thereby helping to prevent the double taxation of employment income inter alia, could be very welcome for both employers and employees.
This GMS Flash Alert considers the impact that the new double taxation treaty will have on globally-mobile employees and their employers.