Brazil’s Official Gazette on 3 March 2026 published Decree 12.863, promulgating the first protocol that modernises the 2001 Brazil–Chile Double Taxation Agreement (DTA). Orbitax and other specialist services reported the development on 6 March 2026, confirming that the protocol actually entered into force on 30 October 2025 and applies to income earned from 1 January 2026 onward.
Key mobility-relevant changes include a reduction of the maximum withholding-tax rate on cross-border dividends to 10 % (from 15 %), a new 10 % cap on interest paid to recognised banks, and a 10 % ceiling on royalties. The protocol also introduces an Article on capital-gains taxation that exempts shares held for more than one year when the seller owns under 10 % of the company—welcome news for Brazilian assignees who receive equity in Chilean subsidiaries and vice-versa.
If the modernised rules have you rethinking upcoming moves, VisaHQ can streamline the visa paperwork on both sides of the border. Their online platform offers fast, expert-reviewed processing for Brazilian and Chilean business, work and project visas, letting mobility teams focus on tax planning rather than red tape; full details are available at https://www.visahq.com/brazil/
![Brazil publishes decree giving force to amended tax treaty with Chile]()
Importantly, the agreement adds OECD-aligned anti-abuse wording (Principal Purpose Test) and a Mutual Agreement Procedure that sets a three-year clock for presenting cases. Multinationals using short-term assignments and cross-border commuters between São Paulo and Santiago should revisit gross-up policies: lower treaty rates can cut assignment costs by 5-10 % once payroll vendors update the tables.
Tax directors should also note that Brazil’s transfer-pricing reform—effective for FY 2024 but elective until FY 2028—interacts with the treaty. Intercompany loan interest that now falls under the arm’s-length principle benefits directly from the new 10 % withholding cap, provided substance tests are met. Employers are advised to adjust their shadow-payroll instructions and communicate the upgraded certificate-of-coverage procedure to assignees to avoid double taxation.
The protocol’s swift promulgation underlines Brasília’s push to refresh its bilateral network to match OECD standards ahead of the country’s anticipated OECD accession. The change simplifies life for roughly 20 000 Brazilian and Chilean professionals posted under intra-company and project visas each year and strengthens the corridor for mining, agritech and fintech investment between the two Pacific-facing economies.
Key mobility-relevant changes include a reduction of the maximum withholding-tax rate on cross-border dividends to 10 % (from 15 %), a new 10 % cap on interest paid to recognised banks, and a 10 % ceiling on royalties. The protocol also introduces an Article on capital-gains taxation that exempts shares held for more than one year when the seller owns under 10 % of the company—welcome news for Brazilian assignees who receive equity in Chilean subsidiaries and vice-versa.
If the modernised rules have you rethinking upcoming moves, VisaHQ can streamline the visa paperwork on both sides of the border. Their online platform offers fast, expert-reviewed processing for Brazilian and Chilean business, work and project visas, letting mobility teams focus on tax planning rather than red tape; full details are available at https://www.visahq.com/brazil/
Importantly, the agreement adds OECD-aligned anti-abuse wording (Principal Purpose Test) and a Mutual Agreement Procedure that sets a three-year clock for presenting cases. Multinationals using short-term assignments and cross-border commuters between São Paulo and Santiago should revisit gross-up policies: lower treaty rates can cut assignment costs by 5-10 % once payroll vendors update the tables.
Tax directors should also note that Brazil’s transfer-pricing reform—effective for FY 2024 but elective until FY 2028—interacts with the treaty. Intercompany loan interest that now falls under the arm’s-length principle benefits directly from the new 10 % withholding cap, provided substance tests are met. Employers are advised to adjust their shadow-payroll instructions and communicate the upgraded certificate-of-coverage procedure to assignees to avoid double taxation.
The protocol’s swift promulgation underlines Brasília’s push to refresh its bilateral network to match OECD standards ahead of the country’s anticipated OECD accession. The change simplifies life for roughly 20 000 Brazilian and Chilean professionals posted under intra-company and project visas each year and strengthens the corridor for mining, agritech and fintech investment between the two Pacific-facing economies.
