A Discussion on the International Tax Issues Arising in Chinese Enterprises’ Investments to Brazil

Abstract

Brazil is a member state of the Golden BRICS and the biggest economy in South America. China is also a member state of the Golden BRICS and the second biggest economy in the world. To enhance mutual economic cooperation in trading and investment is in line with the interests of both countries. Against this background, this paper discusses a few tax issues arising in the cases concerning Chinese enterprises’ investments in Brazil from the perspective of double tax treaty and the protocol signed in 2022. Due to the differences in double tax treaties and domestic tax systems, for Chinese investors, to invest in the European Union Member States such as Poland and to invest in Brazil will translate into different tax issues. The differences in tax issues would lead to different tax plans. Most of the tax practitioners in China could not speak Portuguese. This is a realistic obstacle preventing Chinese tax experts or Chinese enterprises from managing the tax risks arising in the Brazilian market. Macau as an area once having so close link with Portugal and nowadays still having some residents able to speak Portugal hopefully might build up a bridge between China and Brazil, if Macau has a plan to sign a double tax treaty with Brazil that is attractive to Chinese enterprises, and also if it has a competitive domestic tax regime.