Brazil Gazettes Interpretative Declaratory Act on Income Taxation of Specified Interest Under DTA With Spain

The Brazilian Official Gazette March 12 published Interpretative Declaratory Act No. 3, on the income tax treatment of specified interest on equity, under the 1974 DTA and protocol with Spain. The act includes measures: 1) specifying that interest a legal entity pays to its holders, partners, or shareholders on equity, and that the entity can deduct under Law No. 9,249/1995, is regarded under the DTA as income from debt claims; and 2) stating that contrary conclusions in previously issued consultation or divergence solutions are modified, regardless of communication to consultants. [Brazil, Official Gazette, 03/12/26]

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