New rules for transfer pricing
Posted: Sun Feb 02, 2025 5:14 am
In 2023, Brazil underwent a substantial reform in its transfer pricing guidelines, through the enactment of Law No. 14,596 , which was subsequently regulated by Federal Revenue Normative Instruction No. 2161 .
These changes were implemented with the aim of aligning Brazilian legislation with international standards, particularly in terms of comparability, which is clear from reading article 2, which states:
“For the purposes of determining the tax basis for the taxes referred to in the sole paragraph of Article 1 of this Law, the terms and conditions of a controlled transaction shall be established in accordance with those that would be established between unrelated parties in comparable transactions.”
What is transfer pricing?
The term “transfer pricing” refers to the jordan telegram data rules and methods used to establish the values charged in commercial and financial transactions between companies that have relationships with each other, but are located in different tax jurisdictions.
The fundamental purpose is to ensure that such transactions are priced fairly, following market conditions, thus avoiding maneuvers to manipulate profits and reduce the taxable base in any of the nations involved.
The rules in question are intended to regulate transfer prices for Corporate Income Tax (IRPJ) and Social Contribution on Net Profit (CSLL) purposes, applicable to taxpayers who adopt the Real, Presumed or Arbitrated Profit regime, in the context of Brazilian companies that carry out operations with related parties abroad, covering all their branches and other economic or professional units.
Regarding controlled transactions, article 3 of the Law states: “For the purposes of the provisions of this Law, a controlled transaction includes any commercial or financial relationship between 2 (two) or more related parties, established or carried out directly or indirectly, including contracts or arrangements in any form and series of transactions.”
These changes were implemented with the aim of aligning Brazilian legislation with international standards, particularly in terms of comparability, which is clear from reading article 2, which states:
“For the purposes of determining the tax basis for the taxes referred to in the sole paragraph of Article 1 of this Law, the terms and conditions of a controlled transaction shall be established in accordance with those that would be established between unrelated parties in comparable transactions.”
What is transfer pricing?
The term “transfer pricing” refers to the jordan telegram data rules and methods used to establish the values charged in commercial and financial transactions between companies that have relationships with each other, but are located in different tax jurisdictions.
The fundamental purpose is to ensure that such transactions are priced fairly, following market conditions, thus avoiding maneuvers to manipulate profits and reduce the taxable base in any of the nations involved.
The rules in question are intended to regulate transfer prices for Corporate Income Tax (IRPJ) and Social Contribution on Net Profit (CSLL) purposes, applicable to taxpayers who adopt the Real, Presumed or Arbitrated Profit regime, in the context of Brazilian companies that carry out operations with related parties abroad, covering all their branches and other economic or professional units.
Regarding controlled transactions, article 3 of the Law states: “For the purposes of the provisions of this Law, a controlled transaction includes any commercial or financial relationship between 2 (two) or more related parties, established or carried out directly or indirectly, including contracts or arrangements in any form and series of transactions.”