BRAZIL Law and Practice Contributed by: Renata Iezzi, Nicole René Gomes e Cunha and Marcela Correa, Basch & Rameh
Basch & Rameh Rua da Consolação 3741 13º and CEP 01416-001 São Paulo, SP Brazil Tel: +55 113 065 4455 Fax: +55 113 064 6049 Email: basram@baschrameh.com.br Web: www.baschrameh.com.br
1. Aircraft and Engine Purchase and Sale 1.1 Sales Agreements 1.1.1 Taxes/Duties Payable Upon Execution of the Sales Agreement No taxes are due based on the execution of a sale agreement for an aircraft or engine. Taxes may become payable upon the completion of a sale, depending on the circumstances (eg, if the buyer or seller is Brazilian or an individual, or if the seller has realised a capital gain). Capital gains rates vary from 15% to 25%. If neither the seller nor the buyer is Brazilian but the aircraft is located in Brazil, capital gains tax might be due. There is no clear definition of “location of the aircraft” for capital gains tax purposes. It might refer to a physi - cal location or include any aircraft registered on the Brazilian register. Neither the sale of corporate inter - ests in non-Brazilian special purpose vehicles that hold title nor the sale of beneficial interests in owner trusts is subject to tax. 1.1.2 Enforceability Against Domestic Parties In most cases, sale agreements between non-Brazil - ian parties do not need registration for purposes of admissibility and enforceability. For formalities related to Brazilian buyers, see 2.3.8 Requirements for Docu- ments Concerning Registration . Although sale agreements usually do not require reg - istration, bills of sale do (see 1.2.1 Transferring Title ).
1.2 Transfer of Ownership 1.2.1 Transferring Title
To transfer title to an aircraft, a bill of sale must be reg - istered with the Brazilian Aeronautical Registry (RAB). An aircraft is presumed to include engines and parts, unless the bill of sale expressly indicates otherwise. To transfer title to a spare engine, registration of a bill of sale with the RAB is advisable but not required. Auxiliary power units (APUs) and other parts require written documentation; however, RAB registration is not possible. The sale of an ownership interest in an entity that owns an aircraft or engine would not alter the details of its registered owner. When aircraft are owned by owner trusts, the trust agreement, including amendments, must be submit - ted to the RAB, although such agreements are not registered and do not fall into the public domain. Air - craft bills of sale must follow the requirements listed in 2.3.8 Requirements for Documents Concerning Registration . In addition, bills of sale must be: • executed by each of the seller, buyer and two wit - nesses; and • notarised or digitally signed on the execution date. Due to the special notarisation requirement, the prac - tice of signing and delivering undated bills of sale to be held in escrow does not usually work in Brazil. 1.2.2 Sales Governed by English or New York Law The Brazilian Aeronautical Code stipulates that rights in rem over aircraft are governed by the nationality of an aircraft. Consequently, aircraft bills of sale gov -
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