Brazil has enacted its income tax treaty with Poland, capping withholding taxes on dividends, interest, royalties, and technical services fees while incorporating OECD-aligned anti-avoidance measures — with the agreement taking effect from 1 January 2026.
Brazil has issued Decree No. 12.865, dated 2 March 2026, promulgating the income tax treaty with Poland.
Signed on 20 September 2022, the agreement aims to prevent double taxation and tax evasion.
The decree entered into force on 3 March 2026 and confirms that the treaty itself entered into force on 5 November 2025.
The treaty follows the OECD model and covers business profits, dividends, interest, royalties, technical services, capital gains, and employment income.
Dividend withholding is capped at 10% for qualifying corporate shareholders with at least a 25% stake and 15% otherwise. Interest is generally capped at 15%, reduced to 10% for long-term bank loans on equipment or investment projects. Royalties attract 15% for trademarks, and 10% for other types, with technical services fees also capped at 10%.
The treaty includes anti-avoidance provisions, a principal purpose test, and limitations on benefits to prevent treaty shopping, as well as information exchange and mutual agreement procedures.
It applies from 1 January 2026.
Earlier, the income tax treaty between Brazil and Poland took effect on 5 November 2025, applying from 1 January 2026.
