The history of international tax treaties from the Brazilian perspective (20th November 2023)

Brazilian tax policy, strongly influenced in its development by Francisco
Dornelles’s theories, has always used the tax treaty instrument as a tool to attract
foreign investment, following an approach based on the principle of territoriality.
Nevertheless, peculiar measures such as matching credit and tax sparing, long
debated globally, have influenced its negotiating capacity (consider, for instance,
the persistent lack of a tax treaty with the United States). Following the BEPS
initiative, despite not joining the Multilateral Instrument (MLI), Brazil decided to
adopt LOB (Limitation on Benefits) and PPT (Principal Purpose Test) clauses,
in an attempt to align its tax treaty negotiations with OECD and UN models, in
order to gain greater tax competitiveness on a global level.