Book points out challenges for Brazil to meet tax requirements for joining the OECD – 06/22/2023 – What tax is this

Brazil’s formal application for joining the OECD and the agreement to avoid double taxation with the United Kingdom can be considered the milestone of a new taxation policy in the country. This is one of the premises of the book “Brazil in the new era of international taxation”, organized by the Nucleus of Fiscal Studies at FGV Direito SP.

These and other topics —such as legislation on transfer pricing and BEPS Pillars 1 and 2— are part of the collection of articles organized by professors Francisco Lisboa Moreira and Paulo César Teixeira Duarte Filho.

Discussions on accession by Brazil and five other countries to the OECD (Organization for Economic Cooperation and Development) began in January 2022. In June, a map of the criteria to be met to achieve this objective was presented.

Among the measures that have been in progress since then are the joint project with the Federal Revenue to review the Brazilian transfer pricing rules, whose legislation was recently sanctioned by President Lula (PT), the gradual reduction of the IOF-Exchange initiated by the previous government, the New Exchange Rate Mark and the negotiation with the United Kingdom.

Among the challenges ahead are eliminating international double taxation on income and capital, without creating opportunities for non-taxation, and the review of taxation on consumption currently being debated in the National Congress.

These two questions are part of the first chapter of the publication, signed by Duarte Filho. He recalls that the vast majority of OECD countries adopt VAT (Value Added Tax) and/or GST (Taxes on Services), with the exception of the United States, which has a simplified tax on direct sales to the consumer (Sales Tax) .

The entity’s guidelines indicate, for example, that this tax should be levied on actual final consumption; be collected, but not supported, by companies; be neutral and adopt the fate principle, particularly in international trade. That is, to follow the principles that are in the proposal whose guidelines were recently presented.

“The country needs more than making specific changes, but profoundly altering the tax system, to encompass norms that provide for sustainable development, with reallocation and reduction of the burden and removal of protectionist norms that burden international transactions, whatever they may be”, he says. Duarte Filho, for whom the current model is outdated and, in addition to being an obstacle to the traditional economy, it is not compatible with the digital economy.

The ebook is free and available for download at this link:

PRESENT LINK: Did you like this text? Subscriber can release five free hits of any link per day. Just click the blue F below.