ARTICLE 2 OF THE OECD MODEL CONVENTION AND TAXATION OF THE DIGITAL ECONOMY: BRAZILIAN POLICY AND PERSPECTIVES

Abstract

Article 2 of the OECD Model Convention plays a significant role in the application of tax treaties, insofar as it defines which taxes are subject to convention-al clauses. Although it has kept its wording intact throughout its history, this article presents difficulties regarding the digital economy taxation, since many States are adopting unilateral measures to ensure the taxation of this market to the detriment of legal certainty in international relations. In this sense, this study seeks to analyze the compatibility of this article with the “Digital Services Tax” proposed by the European Commission. Moreover, it will examine Article 2 and its paragraphs, in particular the “test of substantial similarity”, as well as the Brazilian policy for this provision in order to verify if this tax would be covered by the Brazilian tax treaties. Finally, conclusions will be presented denoting the tug of war between unilateralism and international consensus, characterized by the emergence of these “digital taxes”.