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      On July 15, 2025, the Brazilian Senate (Senado Federal) approved the Brazil-Poland Income Tax Treaty (“the Treaty”), via Draft Legislative Decree No. 261/2024 (decreto legislativo (PDL) 261/2024).1  The Senate’s approval of the Treaty marks a crucial step towards its implementation.  While not yet effective, the Treaty will introduce comprehensive rules to eliminate double taxation, prevent tax evasion, and facilitate cross-border cooperation.

      The Treaty reflects the deepening economic relationship between Brazil and Poland, facilitating trade, investment, and mobility by providing tax certainty and reducing the risk of double taxation.  The agreement incorporates OECD/G20 BEPS standards, including anti-abuse provisions, mutual agreement procedures, and information exchange mechanisms.  Once effective, the Treaty will apply to income paid or arising from 1 January of the year following entry into force, affecting tax planning for 2026 and beyond.

      WHY THIS MATTERS

      Double taxation treaties are generally expected to facilitate cross-border commerce and investments, including the movement of globally-mobile employees between one country and another, in this case Brazil and Poland, by reducing or eliminating double taxation on the same income.

      As such, a double taxation treaty, like this one between Brazil and Poland, can have a substantial impact on international work assignments, as they clarify taxing rights and create rules that help prevent tax evasion and tax abuse with respect to many different sources of income, and thereby help multinational companies – and their tax service providers – manage the tax liabilities of employees working across borders.  Consequently, companies doing business between Poland and Brazil can more effectively plan for the costs of sending employees into each other’s country and foster compliance with the other country’s tax laws while enhancing tax efficiency.

      Context

      Prior to this Treaty, Brazil and Poland did not have a comprehensive double taxation agreement, leading to potential double taxation, increased compliance costs, and uncertainty for cross-border business and investment.  

      The Treaty was concluded on September 20, 2022. 

       

      Key Highlights

      Senate Approval

      On July 15, 2025, the Brazilian Senate approved the Brazil-Poland Income Tax Treaty, via Draft Legislative Decree No. 261/2024.

      Treaty Status

      • The Treaty was signed on September 20, 2022, ratified by Poland on April 12, 2023, but is not yet in force.  Entry into force requires completion of internal procedures by both countries and mutual notification.

      • The Treaty aims to eliminate double taxation and prevent tax evasion and avoidance with respect to income taxes.  It covers federal income taxes and social contributions on net profits in Brazil, and personal and corporate income taxes in Poland.

      • The Treaty addresses residency, permanent establishment, taxation of various income types (dividends, interest, royalties, technical services), mutual agreement procedures, exchange of information, anti-abuse rules, and non-discrimination.

      Withholding Tax Rates

      The Treaty sets maximum withholding tax rates for dividends (10 percent or 15 percent), interest (10 percent or 15 percent), royalties (10 percent or 15 percent), and technical services (10 percent), subject to the most-favoured nation clauses.

      Anti-Abuse Measures

      The Treaty includes limitations on benefits, principal purpose test, and provisions to counter treaty-shopping and tax-avoidance schemes.

      KPMG INSIGHTS

      Considerations for Next Steps

      The Treaty is expected to become effective for tax periods beginning 1 January of the year following entry into force, likely impacting 2026 tax year operations.   

      Considering the upcoming changes, the following are the recommendations:

      • Stakeholders should closely track the final steps toward entry into force and assess the impact of the treaty on their tax obligations;

      • Companies and individuals engaged in Brazil-Poland cross-border activities should review their current arrangements for alignment with the new Treaty provisions;

      • Engage with affected stakeholders, tax and legal advisers, and payroll administrators to prepare for changes in withholding rates, reporting obligations, and anti-abuse measures.

      What’s Next?

      Stakeholders should monitor for further guidance, notifications, and any amendments or protocols that may affect the application of the treaty.

      If assignees and/or their program managers have any questions or concerns about the scope of the Treaty, its application and potential impacts, and appropriate next steps, they should consult with their qualified tax professional or a member of the GMS tax team with KPMG in Brazil (see the Contact Us section).

      FOOTNOTE:

      1  News release from Brazil’s Senate, Da Agência Senado (in Portuguese) "Aprovado acordo com a Polônia para evitar bitributação" (15/07/2025).

      Contacts

      priscilla-rama
      Priscilla Rama

      Partner

      KPMG in Brazil

      danielle-bibbo
      Danielle Bibbo

      Partner Director

      KPMG in Brazil

      janine-goulart
      Janine Goulart

      Brazil Country Leader, Global Mobility Services, KPMG Brazil

      KPMG in Brazil

      More Information

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      The information contained in this newsletter was submitted by the KPMG International member firm in Brazil.

      GMS Flash Alert is a Global Mobility Services publication of the KPMG LLP Washington National Tax practice. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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