The Brazilian Adoption of the Arm's Length Principle : Considerations and its Impact on the Country's Fiscal Sovereignty in Cross-border Commodities Transactions

Abstract: The thesis critically examines the Brazilian adoption of arm's length principle and assesses its impact on the country's fiscal sovereignty in cross-border commodities transactions. The arm's length principle is regarded as an useful tool for preventing tax avoidance and ensuring tax neutrality. While the adoption of this principle by Brazil serves as a way of aligning its tax regulations with international standards and enhancing tax transparency, it also raises critical questions regarding the country’s fiscal sovereignty. This is due to the fact that the adoption of the arm's length principle results in decreasing the country’s control over tax policies in order to adhere to global and international standards. The thesis critically examines the motivation behind the adoption of this principle by Brazil and evaluates it under the perspective of the practicability principle. The thesis also assesses the implications on fiscal sovereignty of Brazil and highlights potential conflicts that may arise in the ongoing transformation in the Brazilian tax landscape.