Hiring a Brazilian Supplier: No VAT and Treaty Withholding by Country

Every European business that hires a Brazilian supplier asks the same two questions: is there VAT, and is there withholding tax? The short answer is that there is no VAT in any EU member state when the client is a business, and that withholding depends on the tax treaty between Brazil and the client's country. This guide sets out, country by country, where the position matches Spain's and how much may be withheld.

In brief

• VAT: services supplied by a non-EU business to an EU business are invoiced without VAT in all 27 member states. The client accounts for it under the reverse charge. This is EU law and does not depend on any treaty.
• Withholding: 12 EU countries treat technical services from Brazil as royalties, as Spain does. With a Brazilian tax residence certificate, withholding is capped at 10% or 15%, depending on the country.
• Austria, Finland and France: have a treaty, but services are not treated as royalties. Under the treaty there is no withholding on the service.
• Germany, Ireland and 10 others: no treaty in force. Each country's domestic law applies.

1. VAT: why the invoice carries no VAT anywhere in the EU

When a business established outside the EU supplies services to a business established in the EU (B2B), the place of supply is the customer's country and the customer, not the supplier, accounts for the VAT. That is Directive 2006/112/EC, Articles 44 and 196, applied uniformly across the 27 member states. In practice:

• the invoice carries no VAT and states "Reverse charge – Article 196, Directive 2006/112/EC";
• the client provides its VAT number, which can be checked on VIES;
• the client records the VAT as both output and input tax on its own return, so in most cases the cash effect is nil.

This applies to businesses and professionals. Sales to consumers (B2C) follow different rules and require OSS registration. Agathas does not sell to EU consumers.

2. Withholding: what the treaty with Brazil changes

The second question concerns income tax withheld at source, and this is where double taxation treaties come in. Under the OECD model, a service with no transfer of rights is taxed only where the provider is resident. Brazil, however, added a clause to the Protocol of almost all its treaties that treats technical services and technical assistance as royalties (Article 12). The result: the client's country may withhold tax, but only up to the treaty cap, and only if the supplier proves it is tax resident in Brazil.

In Spain, for example, non-resident withholding is 24% without a certificate. With a tax residence certificate issued by Brazil's Receita Federal, it falls to 15% at most. That withholding is neither VAT nor the IRPF deduction applied to Spanish freelancers: it is the supplier's income tax, paid over by the client.

Our guide for EU clients covers invoicing and payment in more detail.

3. The 12 EU countries with a rule the same as, or similar to, Spain's

We checked the text of each treaty as published by Brazil (official list on the Receita Federal treaties page):

Client's country	Where the rule is	Maximum withholding
Belgium	Protocol, point 6 (2002 Additional Convention)	10%
Czech Republic	Protocol, point 3	15%
Denmark	Protocol, point 3	15%*
Hungary	Protocol, point 6	15%
Italy	Protocol, point 5	15%
Luxembourg	Protocol, point 4	15%
Netherlands	Protocol, point 5	15%
Poland	Art. 13 (stand-alone article, from 1/1/2026)	10%
Portugal	Protocol, point 5	15%
Slovakia	Protocol, point 3	15%
Spain	Protocol, point 5	15%
Sweden	2019 Protocol, point 5 (payments from 1/1/2026)	10%

* In Denmark, the 15% cap does not apply where the recipient holds 50% or more of the payer's voting capital, which is not the case in an ordinary client–supplier relationship. Italy, the Netherlands, Luxembourg, Hungary and the Czech Republic/Slovakia had a similar clause, but it was time-limited and has expired.

Three points are worth noting. Belgium has had its own 10% cap for technical assistance since the 2002 Additional Convention. Sweden began treating technical services as royalties under the 2019 Protocol, which applies to payments made from 1 January 2026, with a 10% cap. Poland, in the treaty in force from 2026, has a stand-alone article for technical services, also at 10%.

4. Countries with a treaty but no withholding on services

Austria, Finland and France have treaties with Brazil, but their Protocols do not treat technical services as royalties. The service falls under Article 7 (business profits): with no permanent establishment in the client's country, only Brazil may tax it. Under the treaty, the client withholds nothing.

5. EU countries with no treaty with Brazil

Germany (treaty terminated with effect from 2006), Ireland, Greece, Bulgaria, Croatia, Cyprus, Slovenia, Estonia, Latvia, Lithuania, Malta and Romania. There is no treaty cap here: the client country's domestic law applies. Many of these countries do not withhold on services performed from abroad, but this should be confirmed case by case with the client's adviser.

6. Getting it right, step by step

1. Confirm the client is a business and obtain its VAT number (VIES).
2. Invoice without VAT, with the reverse-charge wording.
3. Send the tax residence certificate before the first payment; it is valid for one year.
4. Agree in the contract whether the fee is gross (withholding comes out of it) or net (the client grosses it up).
5. Pay by SEPA transfer in euros, to an account in the company's name.

How Agathas handles this

We work with organisations in Spain, Portugal and across Europe with a contract, euro invoicing and the tax paperwork ready: residence certificate, correctly worded invoice and guidance for your accountant. If you are weighing up a software, website or automation project with a Brazilian team, speak to our technology consultancy.

In the first call we show you what the project costs net of tax in your country. Book a review.

For information only. Updated in November 2026 from the official treaty texts. It is not a substitute for advice from your own accountant.