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| 1 | --- |
| 2 | name: americas-corridors |
| 3 | version: 1.0 |
| 4 | category: cross-border |
| 5 | --- |
| 6 | |
| 7 | # Americas Treaty Corridors — Withholding Tax Rates |
| 8 | |
| 9 | ## Quick Reference |
| 10 | |
| 11 | | Field | Value | |
| 12 | |-------|-------| |
| 13 | | Jurisdiction | Americas (North, Central, South) | |
| 14 | | Corridors Covered | US-CA, US-MX, US-BR, BR-AR, CA-UK, MX-ES, BR-PT, CL-ES, CO-ES | |
| 15 | | Number of Corridors | 9 | |
| 16 | | Last Verified | May 2026 | |
| 17 | | Key Note | US has NO treaty with Brazil. Brazil has limited treaty network. Latin American countries generally impose higher WHT rates than OECD average. | |
| 18 | |
| 19 | --- |
| 20 | |
| 21 | ## US → Canada |
| 22 | |
| 23 | | Income Type | Treaty Rate | Treaty Article | Notes | |
| 24 | |-------------|------------|----------------|-------| |
| 25 | | Dividends — portfolio | 15% | Art X(2)(b) | CA domestic WHT 25% | |
| 26 | | Dividends — substantial (≥10% voting) | 5% | Art X(2)(a) | Direct corporate investment | |
| 27 | | Interest — arm's length | 0% | Art XI(1) | 2007 Fifth Protocol eliminated | |
| 28 | | Interest — related parties | 10% | Art XI | Related-party exception retained | |
| 29 | | Royalties — copyright/literary/artistic/software | 0% | Art XII(2)(a) | Specific exemption | |
| 30 | | Royalties — other (patents, trademarks) | 10% | Art XII(2)(b) | Industrial/commercial | |
| 31 | | Technical services | 0% | Art VII/XIV | Business profits / independent services | |
| 32 | |
| 33 | **Source:** US-Canada Convention signed 26 September 1980, five Protocols (latest 2007). IRS Table 1. |
| 34 | **Special provisions:** Fifth Protocol (2007) was transformative — eliminated arm's length interest WHT and merged independent personal services into business profits. Split royalty treatment is typical of Canadian treaty practice. Canada domestic WHT is 25% across the board. Comprehensive LOB. Cross-border pension rules (RRSP/RRIF recognition). This is the highest-volume bilateral tax treaty corridor in the world. |
| 35 | **Last verified:** May 2026 |
| 36 | |
| 37 | --- |
| 38 | |
| 39 | ## US → Mexico |
| 40 | |
| 41 | | Income Type | Treaty Rate | Treaty Article | Notes | |
| 42 | |-------------|------------|----------------|-------| |
| 43 | | Dividends — portfolio | 10% | Art 10(2)(b) | MX domestic WHT 10% | |
| 44 | | Dividends — substantial (≥10% voting) | 5% | Art 10(2)(a) | Direct corporate investment | |
| 45 | | Interest — general | 15% | Art 11(2) | Standard rate | |
| 46 | | Interest — banks/publicly traded bonds | 10% | Art 11(2) | Financial institution rate | |
| 47 | | Interest — certain bank/insurance | 4.9% | Art 11(2) | Special category | |
| 48 | | Royalties | 10% | Art 12(2) | All categories 10% | |
| 49 | | Technical services | 0% | Art 14 | Independent personal services — no fixed base | |
| 50 | |
| 51 | **Source:** US-Mexico Convention signed 18 September 1992. IRS Table 1. |
| 52 | **Special provisions:** Three-tier interest rate structure is unique. Mexico domestic WHT varies: dividends 10%, interest 4.9-35%, royalties 25-35%. Portfolio dividend treaty rate (10%) matches Mexico's domestic rate. NAFTA/USMCA investment provisions interact with treaty. LOB article. |
| 53 | **Last verified:** May 2026 |
| 54 | |
| 55 | --- |
| 56 | |
| 57 | ## US → Brazil |
| 58 | |
| 59 | **No comprehensive income tax treaty exists between the US and Brazil.** |
| 60 | |
| 61 | | Income Type | Rate | Notes | |
| 62 | |-------------|------|-------| |
| 63 | | Dividends | 0% (BR domestic) | Brazil does not withhold on dividends (unique globally) | |
| 64 | | Interest | 15% (BR domestic) | IRRF; 25% if paid to tax haven | |
| 65 | | Royalties | 15% (BR domestic) | IRRF; 25% if paid to tax haven | |
| 66 | | Technical services | 15-25% (BR domestic) | IRRF depending on service type | |
| 67 | |
| 68 | **Note:** The US and Brazil have never concluded a comprehensive income tax treaty. Negotiations have been discussed for decades but no convention has been finalised as of May 2026. Brazil is not on the IRS A-to-Z list of US income tax treaties. US-source FDAP payments to Brazilian residents face default 30% US WHT with no treaty relief. Brazilian IRRF (15% general, 25% for tax haven recipients) applies to outbound payments with no treaty reduction to the US. However, Brazil uniquely does NOT withhold on dividend distributions. |
| 69 | **Last verified:** May 2026 |
| 70 | |
| 71 | --- |
| 72 | |
| 73 | ## Brazil → Argentina |
| 74 | |
| 75 | | Income Type | Treaty Rate | Treaty Article | Notes | |
| 76 | |-------------|------------|----------------|-------| |
| 77 | | Dividends | 15% | Art 10 | BR does not impose domestic dividend WHT | |
| 78 | | Interest | 15% | Art 11 | AR domestic WHT 15.05-35% | |
| 79 | | Royalties — general | 10%/15% | Art 12 | Split by type | |
| 80 | | Technical services | 15% | Art 12/14 | Service fees | |
| 81 | |
| 82 | **Source:** Brazil-Argentina DTA. PwC Argentina WHT table. |
| 83 | **Special provisions:** Brazil uniquely does not withhold on dividends — treaty rate relevant only from Argentine side. Argentina domestic WHT on interest is 15.05-35%, reduced by treaty. Royalties split: 10% for certain categories, 15% for others. Both countries have limited treaty networks. MERCOSUR economic integration provides trade benefits but does not affect treaty rates. |
| 84 | **Last verified:** May 2026 |
| 85 | |
| 86 | --- |
| 87 | |
| 88 | ## Canada → UK |
| 89 | |
| 90 | | Income Type | Treaty Rate | Treaty Article | Notes | |
| 91 | |-------------|------------|----------------|-------| |
| 92 | | Dividends — portfolio | 15% | Art 10 | CA domestic WHT 25% | |
| 93 | | Dividends — substantial (≥10% voting) | 5% | Art 10 | Direct investment | |
| 94 | | Interest | 10% | Art 11(2) | Government interest exempt | |
| 95 | | Royalties — copyright/patent/software | 0% | Art 12(3) | Specific exemption | |
| 96 | | Royalties — other (trademarks, franchises) | 10% | Art 12(2) | General rate | |
| 97 | | Technical services | 0% | Art 7 | Business profits — no WHT without PE | |
| 98 | |
| 99 | **Source:** Canada-UK Convention 1978, consolidated 2014. Modified by MLI (effective January 2020). |
| 100 | **Special provisions:** Mirror of UK→Canada rates. Split royalty rates are characteristic of Canadian treaty practice. Copyright, patent, and software royalties at 0% — critical for tech/media cross-border flows. MLI PPT applies since January 2020. Canada domestic WHT is uniformly 25%. |
| 101 | **Last verified:** May 2026 |
| 102 | |
| 103 | --- |
| 104 | |
| 105 | ## Mexico → Spain |
| 106 | |
| 107 | | Income Type | Treaty Rate | Treaty Article | Notes | |
| 108 | |-------------|------------|----------------|-------| |
| 109 | | Dividends — portfolio | 10% | Art 10 | MX domestic WHT 10% | |
| 110 | | Dividends — substantial (≥25% capital) | 5% | Art 10 | Higher threshold (25%) | |
| 111 | | Interest — general | 10% | Art 11 | Standard rate | |
| 112 | | Interest — banks/FIs | 4.9% | Art 11 | Special bank rate | |
| 113 | | Royalties | 10% | Art 12 | All categories 10% | |
| 114 | | Technical services | 0% | Art 7/14 | Business profits / independent services | |
| 115 | |
| 116 | **Source:** Mexico-Spain Convention. PwC Mexico/Spain WHT tables. |
| 117 | **Special provisions:** Spanish multinational investments in Mexico are substantial. 25% capital threshold for reduced dividends reflects older treaty practice. Mexico's 4.9% bank interest rate appears in multiple Mexican treaties. Spain domestic WHT: 19% on dividends to non-residents. |
| 118 | **Last verified:** May 2026 |
| 119 | |
| 120 | --- |
| 121 | |
| 122 | ## Brazil → Portugal |
| 123 | |
| 124 | | Income Type | Treaty Rate | Treaty Article | Notes | |
| 125 | |-------------|------------|----------------|-------| |
| 126 | | Dividends | 10%/15% | Art 10 | 10% if ≥25% capital; 15% otherwise | |
| 127 | | Interest | 15% | Art 11 | Standard rate | |
| 128 | | Royalties | 15% | Art 12 | Standard rate | |
| 129 | | Technical services | 15% | Art 12/14 | Service fees | |
| 130 | |
| 131 | **Source:** Brazil-Portugal Convention. PwC Brazil WHT guidance. |
| 132 | **Special provisions:** Historic Lusophone corridor. Brazil does not impose domestic dividend WHT — treaty rate relevant only from Portuguese side. Portugal domestic WHT: 25% across categories. Both countries are in the CPLP (Community of Portuguese Language Countries). One of Brazil's oldest treaty relationships. |
| 133 | **Last verified:** May 2026 |
| 134 | |
| 135 | --- |
| 136 | |
| 137 | ## Chile → Spain |
| 138 | |
| 139 | | Income Type | Treaty Rate | Treaty Article | Notes | |
| 140 | |-------------|------------|----------------|-------| |
| 141 | | Dividends — portfolio | 10% | Art 10 | CL domestic WHT 35% (credit system) | |
| 142 | | Dividends — substantial (≥20% capital) | 5% | Art 10 | Lower rate | |
| 143 | | Interest — general | 15% | Art 11 | Standard rate | |
| 144 | | Interest — banks/FIs | 5% | Art 11 | Bank rate | |
| 145 | | Royalties — copyright/literary/artistic | 5% | Art 12 | Cultural royalties | |
| 146 | | Royalties — other (industrial/commercial) | 10% | Art 12 | Industrial royalties | |
| 147 | | Technical services | 0% | Art 7/14 | Business profits / independent services | |
| 148 | |
| 149 | **Source:** Chile-Spain Convention. PwC Chile WHT table. |
| 150 | **Special provisions:** Spain is a major investor in Chile. Chile's integrated tax system uses a credit mechanism for dividends. Split royalty rates (5%/10%). Two-tier interest (5%/15%). Chile domestic WHT on royalties is 30% — treaty provides significant reduction. |
| 151 | **Last verified:** May 2026 |
| 152 | |
| 153 | --- |
| 154 | |
| 155 | ## Colombia → Spain |
| 156 | |
| 157 | | Income Type | Treaty Rate | Treaty Article | Notes | |
| 158 | |-------------|------------|----------------|-------| |
| 159 | | Dividends — portfolio | 10% | Art 10 | CO domestic WHT 20% | |
| 160 | | Dividends — substantial (≥20% capital) | 5% | Art 10 | Lower rate | |
| 161 | | Interest | 10% | Art 11 | CO domestic WHT 15-20% | |
| 162 | | Royalties | 10% | Art 12 | CO domestic WHT 20% | |
| 163 | | Technical services | 10% | Art 12 | Included in royalties article | |
| 164 | |
| 165 | **Source:** Colombia-Spain Convention. PwC Colombia WHT guidance. |
| 166 | **Special provisions:** Spain is a major FDI source for Colombia. Colombia domestic WHT: 20% on royalties, 15-20% on interest, 20% on dividends. Treaty provides meaningful reduction across all categories. Colombia is part of the Pacific Alliance and OECD. |
| 167 | **Last verified:** May 2026 |
| 168 | |
| 169 | --- |
| 170 | |
| 171 | ## Summary: Americas Treaty Rate Comparison |
| 172 | |
| 173 | | Corridor | Dividends (substantial) | Interest | Royalties | Key Feature | |
| 174 | |----------|------------------------|----------|-----------|-------------| |
| 175 | | US → CA | 5% | 0% (arm's length) | 0%/10% | Zero interest since 2007 | |
| 176 | | US → MX | 5% | 4.9%/10%/15% | 10% | Three-tier interest | |
| 177 | | US → BR | No treaty | 15% (domestic) | 15% (domestic) | No treaty exists | |
| 178 | | BR → AR | 15% | 15% | 10%/15% | BR no dividend WHT | |
| 179 | | CA → UK | 5% | 10% | 0%/10% | Split royalties | |
| 180 | | MX → ES | 5% | 4.9%/10% | 10% | Bank rate 4.9% | |
| 181 | | BR → PT | 10% | 15% | 15% | Lusophone corridor | |
| 182 | | CL → ES | 5% | 5%/15% | 5%/10% | Split royalties | |
| 183 | | CO → ES | 5% | 10% | 10% | OECD member | |
| 184 | |
| 185 | --- |
| 186 | |
| 187 | ## PE Threshold Notes — Americas |
| 188 | |
| 189 | | Corridor | Construction PE Threshold | Service PE | Notes | |
| 190 | |----------|--------------------------|------------|-------| |
| 191 | | US → CA | 12 months | None (Art XIV merged) | Fifth Protocol merged services into Art VII | |
| 192 | | US → MX | 6 months | 183 days in any 12-month period | Shorter than standard — monitor near-shoring | |
| 193 | | US → BR | No treaty | No treaty | Brazil domestic PE rules apply | |
| 194 | | BR → AR | 6 months | 6 months | Short threshold | |
| 195 | | CA → UK | 12 months | None | Standard OECD | |
| 196 | | MX → ES | 6 months | 183 days | Mexico standard | |
| 197 | | CL → ES | 6 months | 183 days | Chile standard | |
| 198 | | CO → ES | 12 months | 183 days | Colombia standard | |
| 199 | |
| 200 | **Mexico and Chile** use 6-month construction PE thresholds — significantly shorter than the OECD 12-month standard. This is critical for infrastructure and energy projects. |
| 201 | |
| 202 | --- |
| 203 | |
| 204 | ## Brazil's Treaty Network — Key Limitation |
| 205 | |
| 206 | Brazil has one of the most limited treaty networks among major economies: |
| 207 | |
| 208 | | Brazil Treaty Partner | Dividends | Interest | Royalties | Notes | |
| 209 | |----------------------|-----------|----------|-----------|-------| |
| 210 | | Argentina | 15% | 15% | 10%/15% | MERCOSUR partner | |
| 211 | | Chile | 10%/15% | 10%/15% | 10%/15% | 2026 Protocol cuts rates | |
| 212 | | Portugal | 10%/15% | 15% | 15% | Historic Lusophone tie | |
| 213 | | Japan | 12.5% | 12.5% | 12.5%/15%/25% | Category-dependent | |
| 214 | | India | 10%/15% | 10%/15% | 10%/15%/25% | 2022 Protocol (effective 2026) | |
| 215 | | France | 10%/15% | 10%/15% | 15%/25% | Older treaty | |
| 216 | | Spain | 10%/15% | 10%/15% | 10%/15% | Key EU partner | |
| 217 | |
| 218 | **Notable absences from Brazil's treaty network:** US, UK, Germany, Australia, Canada, Singapore, Netherlands. For these jurisdictions, Brazilian domestic IRRF rates apply with no treaty relief. |
| 219 | |
| 220 | --- |
| 221 | |
| 222 | ## Key Observations |
| 223 | |
| 224 | 1. **Brazil's unique position:** Brazil does not impose WHT on dividend distributions and has a very limited treaty network (no US treaty). Brazil's IRRF of 15% (25% for tax haven recipients) applies to most outbound payments. |
| 225 | |
| 226 | 2. **Latin American WHT rates** are generally higher than OECD/European rates. Treaty negotiations tend to produce rates of 10-15% rather than 0-5%. |
| 227 | |
| 228 | 3. **Mexico's bank interest rate** of 4.9% appears in multiple Mexican treaties and is one of the lowest interest rates available in the Americas. |
| 229 | |
| 230 | 4. **Canada's split royalty approach** (0% copyright/software vs 10% industrial) is consistent across its treaty network and materially affects tech/media planning. |
| 231 | |
| 232 | 5. **Near-shoring impact:** Mexico's 6-month PE threshold requires careful structuring for US companies establishing manufacturing/service operations under USMCA. |
| 233 | |
| 234 | 6. **Chile-Brazil 2026 Protocol:** Brazil published Decree 12.863 on 3 March 2026 implementing the first amending protocol to the Brazil-Chile DTA. New reduced ceilings: dividends 10% (from 15%), interest 10% for qualifying banks, royalties 10%. Effective for income earned since January 2026. |
| 235 | |
| 236 | 7. **India-Brazil 2022 Protocol:** Notified by India on 3 March 2026, effective from 1 April 2026. Reduces dividend WHT to 10%/15% (from 15%/25%), interest to 10%/15%, and royalties to 10%/15%. Introduces separate FTS article at 10%. |
| 237 | |
| 238 | --- |
| 239 | |
| 240 | ## Key Procedural Requirements |
| 241 | |
| 242 | | Country | Form Required for Treaty Benefits | Notes | |
| 243 | |---------|----------------------------------|-------| |
| 244 | | US | W-8BEN / W-8BEN-E | LOB certification required | |
| 245 | | Canada | NR301 (individuals) / NR302 (entities) | Declaration of eligibility | |
| 246 | | Mexico | No standard form; CoR required | Mexican tax authority format | |
| 247 | | Brazil | CoR + apostille or consular certification | Limited treaty network | |
| 248 | | Argentina | CoR from home country | Treaty benefits via domestic claim | |
| 249 | | Chile | CoR from home country | DTA claim at source | |
| 250 | | Colombia | CoR from home country | Treaty benefit claim via payer | |
| 251 | |
| 252 | --- |
| 253 | |
| 254 | ## Disclaimer |
| 255 | |
| 256 | This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Treaty rates are subject to change through protocol amendments and renegotiations. Always verify current treaty text before relying on any rate. All outputs must be reviewed by a qualified professional before filing or acting upon. |
| 257 |
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