By Blaine Deolindo*
On May 13, 2025, Brazil’s Federal Revenue Service (RFB) Normative Instruction No. 2,265 amended Normative Instruction RFB No. 1,037/2010, removing the United Arab Emirates from the list of preferential tax jurisdictions (PTJs), commonly known as the “tax haven list.” This measure, in accordance with the tax transparency standards of the Organization for Economic Cooperation and Development (OECD) and the Brazil-UAE Double Taxation Avoidance Agreement (DTA), signed in 2018 and enacted by Decree No. 10,705/2021, eliminates restrictions established under Articles 24 of Law No. 9,430/1996 and Articles 17 to 22 of Law No. 12,973/2014. In a global context marked by trade barriers, such as the recent tariffs imposed by the United States, this change positions the UAE as a strategic destination for Brazilian investors, fostering greater bilateral economic integration.
Tax and economic impacts
The removal of the UAE from the PTJ reduces significant tax burdens. Payments of income abroad (interest, royalties, technical services) are now subject to a 15% withholding income tax (IRRF) instead of 25% (Art. 685, Decree No. 9,580/2018), generating a 10% savings. Thin capitalization rules (Art. 24, §1, Law No. 9,430/1996) no longer limit the deductibility of interest on intragroup loans, and the transfer pricing regime (Arts. 18 to 24) is simplified, eliminating the need for increased adjustments for transactions with entities in the UAE.
For Controlled Foreign Corporations (CFCs), profits from subsidiaries in the UAE are taxed on a cash basis, deferring Corporate Income Tax (IRPJ) and Social Contribution on Net Profit (CSLL) until distribution (Art. 1, Law No. 12,973/2014). For individuals, the measure facilitates permanent departure from Brazil, exempting tax residents in the UAE from taxation on worldwide income, with withholding only on assets held in Brazil, while also reducing reporting requirements under the Brazilian Capital Abroad Declaration (DCBE) and the Fiscal Accounting Bookkeeping (ECF).
Economically, the measure boosts bilateral trade, which exceeded USD 5.5 billion in 2024, with a focus on agribusiness, energy, and infrastructure. Special economic zones, such as the Dubai International Financial Centre (DIFC), Dubai Multi Commodities Centre (DMCC), and Jebel Ali Free Zone (JAFZA), offer tax exemptions and full foreign ownership, consolidating the UAE as a logistics hub between Europe, Asia, and Africa. Sovereign wealth funds, such as Mubadala, are increasing investments in infrastructure, renewable energy, and agribusiness in Brazil, while Emirati port infrastructure optimizes import and export operations.
Strategic opportunities
In the context of global volatility and trade barriers, the UAE emerges as a privileged jurisdiction for asset diversification and business expansion. Brazilian companies can establish subsidiaries in free zones to optimize cross-border structures, channeling investments to third-party markets under bilateral treaties.
In light of the 50% tariffs imposed by the U.S. on Brazilian products, such as coffee (Section 301, Trade Act of 1974), on August 6, 2025, and threats of increases up to 100% for BRICS nations, the UAE emerges as an alternative to restructure supply chains, redirecting exports via the Jebel Ali Free Zone to Asian markets. The corporate tax rate of 9% (Federal Decree-Law No. 47/2022, above AED 375,000) and exemptions in free zones contrast with Brazil’s 34% (IRPJ + CSLL) and up to 28% in the U.S., facilitating cross-border operations in compliance with BEPS/OECD standards.
Sectors such as agribusiness, exporting to the UAE’s food hub; energy, through partnerships with ADNOC and Masdar; and technology, with robust regulation for fintechs and crypto-assets, benefit from fiscal incentives and state-of-the-art infrastructure.
For individuals, the Golden Visa program (Cabinet Decision No. 56/2018) enables dual tax residency, exempting inheritance and dividend taxes, while trusts (DIFC Law No. 4/2018) and Law No. 14,754/2023 optimize estate planning. Compliance with the anti-avoidance rule (Art. 116, CTN) is crucial to prevent penalties for abusive tax avoidance, especially in complex structures. Investments in real estate, particularly in Dubai, and in global e-commerce become attractive, with profit remittances taxed at 15% in Brazil.
Conclusion
RFB Normative Instruction No. 2,265/2025 represents a significant advancement in Brazil-UAE relations, reducing fiscal costs and bureaucracy. With a corporate tax rate of 9%, state-of-the-art infrastructure, and stability, the UAE serves as a strategic hub for Brazilian companies and individuals. Legal advisory is essential for compliance and risk mitigation, consolidating the UAE as a destination for innovation and security.
*Blaine Deolindo holds a master’s degree in international law, is a specialist in financial, corporate, and regulatory law, and resides in Dubai, United Arab Emirates.
The opinions expressed in the articles are the responsibility of the authors.
Translated by Guilherme Miranda
