BRAZIL Law and Practice Contributed by: Paulo Honório de Castro Júnior, Bruno Marques Feitosa, Matheus Di Felippo and Urick Soares, William Freire Advogados
• Local File, containing information relating to controlled transactions and the parties involved in controlled transactions. Taxpayers are required to submit the Master File and Local File through a Digital Process, using the service available at the Virtual Service Center (e-CAC) of the Federal Revenue Service (RFB), no later than three months after the deadline for filing the Fiscal Account - ing Records (ECF) for the relevant calendar year. Therefore, given that the ECF filing deadline is 31 July, the Local File and the Master File must be submitted no later than 31 October. Exceptionally, with respect to the 2024 financial year, these declarations could have been submitted until the last business day of the 2025 and 2024 calendar years, respectively. The Country-by-Country Report must be filed through the completion of the specific section of the ECF (Bra - zilian corporate income tax return). Additionally, for commodity transactions, taxpayers are required to submit a monthly file known as the Commodity Transaction Register (RTC). The RTC must include detailed information regarding: • the commodity traded; • the volume and value of the transactions; • the shipment date; The deadline for filing the RTC is the tenth day of the month following the month in which the contract or transaction involving the commodity was entered into, regardless of the form used for its formalisation. 9. Alignment With OECD Guidelines 9.1 Alignment and Differences Brazilian legislation for transfer pricing was signifi - cantly modified in 2023 through the enactment of Law • the contractual terms; and • the pricing method applied.
No 14,596, the application of which is mandatory for the year 2024. The changes brought about by the legislation under discussion aimed to fully align Brazilian practices with the OECD Guidelines. The need for such alignment was described in the document “The New Price System for Transfer: Improvement of the Brazilian Tax System and Pro - motion of Trade and Investment”, signed jointly by the Federal Revenue Service and the OECD: “Recognizing that the current Brazilian system weak - ens the country’s tax and development interests, it was concluded that alignment with the international standard would be the best option for Brazil. Full alignment was considered necessary, as, otherwise, significant gaps would remain in the system, with negative effects on legal certainty in tax matters, the cost of compliance, as well as the risks of persistent double taxation and loss of revenue taxes. Full align - ment is defined as the adoption of and commitment to the international transfer pricing standard, including the arm’s length principle and the guidelines for its application contained in the OECD Guidelines. “Total alignment does not imply completely abandon - ing the objectives of simplicity, ease of administra - tion and tax compliance and legal certainty in tax matters. These objectives can be achieved through the introduction of safe harbors designed in accord - ance with the arm’s length principle, including care - fully considered input criteria, to ensure that transfer pricing results are broadly consistent with the results produced by the full comparability analysis in accord - ance with the OECD Transfer Pricing Guidelines. “The OECD Secretariat has analyzed the final version of Provisional Measure 1,152/2022 and considers that the Provisional Measure incorporates fundamental principles and concepts covered by the OECD instru - ments on transfer pricing and contained in the OECD Guidelines on Transfer Pricing for Multinational Enter - prises and Tax Administrations (2022) and reflected in the United Nations Practical Manual on Transfer Pric - ing for Developing Countries (2021). There are some provisions that, while still aligned with international
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