INFRASTRUCTURE EVIDENCE AND DIGITAL TAXATION IN BRAZIL: A FOUR-GATE EVIDENTIARY CONGRUENCE TEST FOR BUSINESS PROFITS NOT GOVERNED BY AN APPLICABLE INCOME-TAX TREATY

Abstract

A digital transaction can generate precise Brazilian infrastructure records without showing that the enterprise described by those records earned the corresponding business income. This article asks when such records can support an income-tax inference concerning remote nonresident profits not governed by an applicable income-tax treaty. Using doctrinal and documentary analysis, it examines Brazil's Special Tax Regime for Data Center Services (REDATA) and functionally compares India's significant-economic-presence rule and former Equalisation Levy, OECD Amount A, and United Nations treaty and negotiating instruments. The study separates enacted legal facts, permissible evidentiary inferences, and administrative practice, and develops a four-gate protocol testing record subject, measured activity, period and accounting scope, and income recipient. Its incremental contribution is procedural: claim-first testing, explicit criteria for material mismatch and documentary bridges, and an asymmetric stopping rule that prevents evidentiary sufficiency from substituting for taxing authority, attribution, timing, relief, or collection. A comparative matrix, sensitivity exercise, and constructed transaction files illustrate correspondence, conditional correspondence, and refusal. The protocol is a conceptual audit framework rather than an empirically validated compliance tool; inter-reviewer reproducibility and administrative performance remain questions for future empirical testing. REDATA may make infrastructure activity highly visible while remaining insufficient, by itself, to prove another legal person's taxable income. Any Brazilian market-nexus rule should therefore follow transaction mapping, identification of the income holder, reviewable sourcing, overlap control, and a realistic collection route.