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This excerpt taken from the PBR 20-F filed May 22, 2009. Taxation of Dividends
Dividends paid by us, including stock dividends and other
dividends paid in property to the depositary in respect of the
ADSs, or to a non-Brazilian holder in respect of the preferred
or common shares, are currently not subject to withholding tax
in Brazil.
We must pay to our shareholders (including holders of common or
preferred shares or ADSs) interest on the amount of dividends
payable to them, at the SELIC rate, from the end of each fiscal
year through the date of effective payment of those dividends.
These interest payments are considered as fixed-yield income and
are subject to withholding income tax at varying rates depending
on the length of period of interest accrual. The tax rate ranges
from 15%, in case of interest accrued for a period greater than
720 days, to 22.5%, in case of interest accrued for a
period up to 180 days. However, holders of ADSs and holders
of common or preferred shares not resident or domiciled in tax
haven jurisdictions investing under Resolution No. 2,689
are subject to such withholding tax at a reduced rate, currently
at 15%. See “—Beneficiaries Residing or Domiciled in
Tax Havens or Low Tax Jurisdictions.”
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