INTERNATIONAL TAX REFORM IN THE DIGITAL AGE: IMPACTS OF OECD PILLAR 1 ON THE REDISTRIBUTION OF TAX REVENUES

This thesis addresses the urgent need to reform the international tax system in the face of the challenges posed by globalization and digitalization. With markets increasingly electronic and less associated with a specific physical location, the traditional tax rules, based on physical presence for the attribution of taxation, become insufficient and ineffective to capture the economic value effectively generated by large multinational companies, especially in the digital sector. It analyses, with special focus, the reforms promoted by the Organization for Economic Co-operation and Development (OECD), particularly Pillar 1, whose purpose is to ensure a more equitable redistribution of tax revenues, transferring part of the profits of multinationals to the jurisdictions where value creation occurs. In this context, it reflects on the expected impact of Pillar 1, especially within the European Union, which promotes greater tax justice and combats the erosion of the tax base and the illicit transfer of profits. In addition, the role of Country-by-Country Reporting (CbCR) stands out, an instrument that reinforces tax transparency by obliging multinational business groups to report detailed data on their operations, profits and taxes paid by jurisdiction to the tax authorities on an annual basis, contributing to the identification of aggressive tax planning practices. Methodologically, the research includes an empirical analysis supported by a multiple linear regression model that promotes the quantitative assessment of the relationship between the effective tax rate, the volume of profits of multinationals and the additional tax resulting from the implementation of Pillar 1. The results indicate that lower effective tax rates are associated with higher amounts of additional tax, highlighting the relevance of international tax harmonization and multilateral coordination to mitigate incentives for tax avoidance and evasion. Finally, the Multilateral Convention (MLC) is discussed as a fundamental legal vehicle for the operationalization of the new rules, as well as the administrative challenges it imposes on tax authorities and multinationals themselves in adapting to the new parameters of international taxation.