Atlanta attorney Robert West, partner and leader of the international practice of the Atlanta office of Womble Carlyle Sandridge & Rice PLLC, and a Miami-based tax consultant are working with their Brazilian counterparts to urge the renegotiation and adoption of a tax treaty between Brazil and the United States, said Mr. West.
A tax treaty would provide efficiency and stability for Atlanta and U.S. companies doing business in Brazil and Brazilian companies doing business here, Mr. West told GlobalAtlanta following a presentation that he and Miami tax consultant Lionel Nobre, Director of Latin American Consulting Services at BDO Seidman LLP, gave at the World Trade Center Atlanta on April 21.
“When a U.S. company does business in Brazil, it needs to know the tax consequences of its business decisions and how to minimize taxes in both the United States and Brazil. A treaty would make the tax treatments of various transactions clearer and help avoid double taxation,” Mr. West said.
U.S. companies doing business in Brazil can currently receive certain foreign tax credits for taxes paid in Brazil. But these credits are a long way from avoiding double taxation, he explained.
Mr. West said he sees Georgian and other U.S. companies increasingly licensing software and other technologies in Brazil, setting up distribution channels and opening manufacturing facilities there. In each such business transaction, tax planning is always required, so a treaty would be helpful, he said.
A treaty would also benefit Brazilian companies, he added, noting that a substantial number of Brazilian firms are doing business in the U.S. Increased trade between Brazil and the U.S., facilitated by an appropriate treaty, would result in an expansion of the Brazilian economy and an increase in the economic resilience of the region, he added.
The two countries negotiated a tax treaty some 25 years ago, but it was never ratified. Now the time is right to reintroduce the idea, Mr. West asserted.
“There is tremendous interest right now on the U.S. side in doing business with Brazil, as well as promoting economic well-being and stabilizing democracy in the region,” he said. “Everybody now perceives Brazil to be an important player as far as the expansion of Brazilian exports to the U.S., the number of U.S. companies exporting to, and doing business in, Brazil and the growth of Brazil as a market.”
He added that it is also an excellent time for Brazil to negotiate a treaty because of its rapidly advancing technological and industrial development and pressure on Brazil’s economy to expand through international trade.
Mr. West and Mr. Nobre are working with their Brazilian counterparts to raise the awareness of Brazilian companies and legislators about the benefits of a tax treaty.
“Our aim is to share information and to make Brazilian businesses more aware of how a treaty would be an advantage for them so there will be increased popular support in Brazil among companies and a desire to ratify a future treaty,” Mr. West added. The tax treaty idea will also be promoted among U.S. groups.
Mr. West and Mr. Nobre are conducting their efforts in coordination with the Brazil-U.S. Business Council.
For more information about the treaty efforts, contact Mr. West at (404) 888-7452 or rwest@wcsr.com. Visit the Brazil-U.S. Business Council Web site at www.brazilcouncil.org