TAXATION OF FOREIGN PROFITS CONTAINED IN LAW N. 12.973/2014 AND ACTION NO. 3 OF THE BEPS G20/OECD PROJECT

Abstract

The erosion of tax bases due to the transfer of foreign profits, powered by the 2008 crisis, led the OECD and the countries on the G20 to promote the BEPS G20/OECD Project. A specific action in this project aimed to deal with the taxation of profits earned abroad (Action n. 3). Concomitantly with the presentation of the Final Report of Action no. 3, Brazil, after a partial declaration of constitutionality of art. 74 of MP no. 2,158-35, edited a new Law to deal with the taxation of foreign profits (Law No. 12,973/2014). Although the national doctrine has raised several criticisms of the recently instituted regime, there was not, at least in the quantitative aspect, a significant affront to the proposals contained in Action n. 3 of the BEPS G20/OECD Project. In this article we will try to present the similarities and differences between Law no. 12,973/2014 and Action no. 3 of the BEPS G20/OECD Project, and what the practical effect of this relationship would be.