BRAZIL Law and Practice Contributed by: Paulo Honório de Castro Júnior, Bruno Marques Feitosa and Urick Soares, William Freire Advogados
7.8 Retroactive Effect for APAs According to the sole paragraph of Article 10 of the draft Normative Instruction, the APA may be applied retroactively to prior tax periods, pro - vided that such application is authorised by the Brazilian Federal Revenue Service and that the relevant facts and circumstances for those peri - ods are consistent with those considered in the agreement. 8. Penalties and Documentation 8.1 Transfer Pricing Penalties and Defences The Brazilian taxpayer must present the docu - mentation and provide information necessary to demonstrate its transactions subject to transfer pricing control, including that necessary for the design of the transaction and the comparability analysis. In this context, the following documents must be presented. • Country-by-Country Declaration – containing information relating to the global allocation of revenues and assets and income tax paid by the multinational group to which it belongs, together with indicators related to the global economic activity of the multinational group, in line with the Action 13 of BEPS. • Global File – containing information relating to the structure and activities of the multi - national group to which it belongs and the other entities that are part of the multinational group, in line with Actions 8 and 9 of the BEPS. • Local File – containing information relating to controlled transactions and the parties involved in controlled transactions, in line with BEPS Actions 8 and 9.
The Global File and the Local File must be pre - sented in electronic format and deposited in the Federal Revenue Service’s own environment (RFB’s Virtual Service Center – e-CAC), within three months after the deadline set for transmis- sion of the ECF of the corresponding calendar year. Exceptionally for the 2024 financial year, these declarations may be sent up to the last business day, respectively, of the 2025 and 2024 calendar years. The Country-to-Country Declaration must be presented by filling out a specific section of the ECF (Brazilian Tax Return). The taxpayer is exempt from sending the Local File in cases where the value of the controlled transactions is less than BRL15 million. For transactions between BRL15 million and BRL500 million a simplified shipping method is defined. For controlled transactions exceeding BRL500 million, the Local File must be sent in its entire - ty, as regulated by Normative Instruction No 2,161/2023. Sending the Global File is also waived in cases where the total controlled operations are less than BRL15 million. In the event that the taxpayer fails to provide the information necessary for the precise delineation of the controlled transaction or for carrying out the comparability analysis, the tax authority will be required to adopt the following measures: • allocate, to the Brazilian entity, the functions, risks and assets attributed to another party
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