On November 4th, 2022, Brazil signed an international agreement with Norway that, among other things, would eliminate double taxation on income, as well as prevent tax evasion.
The purpose of the new agreement is to update and modernize – based on best international practices – the rules of the tax treaty in force that was signed between the two nations over three decades ago (Decree 86.710/1981).
The new treaty determines specific provision regarding offshore activities and brought about several changes, including a separate article to deal with the taxation of remuneration for technical services.
The novelty brought by the treaty is in article 23 which established that, if an enterprise carries on exploration or exploitation of the seabed or subsoil or their natural resources in a state for a period of more than 30 days within a 12-month period, the activity shall be deemed to be carried on through a permanent establishment, resulting in taxation.
Validity of the new international agreement still depends on the text being ratified by the Brazilian Congress and signed into law by the country’s President.