Brazil: Status of possible transfer pricing rules

In seeking to become a member of the OECD, Brazil would aim at adopting OECD-style transfer pricing rules.

Brazil would aim at adopting OECD-style transfer pricing rules.

There are renewed efforts to reform Brazil’s tax system as part of Brazil’s application to become a member of the Organisation for Economic Cooperation and Development (OECD).

In seeking to become a member of the OECD, Brazil would aim at adopting OECD-style transfer pricing rules.

Based on comments made by officials from the Brazilian tax agency (Receita Federal), the arm´s length principle would be adopted even if Brazil’s request for accession to the OECD is not granted.

Since the publication of an OECD-Receita Federal joint report (December 2019) on the state of transfer pricing in Brazil—a report that analyzed the differences between the Brazilian approach and the arm`s length principle—it has been observed that no partial alignment or two-tier transfer pricing system would be introduced. Instead, the Brazilian tax authorities are currently gathering comments from taxpayers with regard to implementation of new safe harbors, advance pricing agreements, comparability factors, and others transfer pricing measures with a goal of facilitating a convergence of the different systems. The outcome is uncertain, but Brazilian businesses are preparing for a change in the near future.

For more information, contact a tax professional with KPMG’s Global Transfer Pricing Services practice in Brazil:

Edson Costa | +55 1139 405313 |

Sebastian Hoffmann | +55 1139 408475 |


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