TAXATION OF HYBRID FINANCIAL INSTRUMENTS – CHALLENGES TO THE IMPLEMENTATION OF THE BEPS ACTION 02

Abstract

Important topic in the debates between scholars, especially after the OECD launched the BEPS Project, which contains a specific action that aims to deal with these transactions, the Action 2 (Neutralising the Effects of Hybrid Mismatch Arrangements). In this article, we analyze the grounds of this action, in which the OECD intends to mobilize the states to a battle against the tax arbitrage through the usage of these instruments, as well as the compatibility of its recommendations with the principles that drive the income taxation in Brazil. At last, we investigate whether is feasible the usage, for tax purposes, of the accounting standards in regard to the classification of these financial instruments, as a measure to reduce the mismatches in their qualification