BRAZIL Law and Practice Contributed by: Paulo Honório de Castro Júnior, Bruno Marques Feitosa and Urick Soares, William Freire Advogados
Brazilian Federal Revenue Service has not yet issued any official guidance. These uncertainties and ambiguities may have prompted the publi - cation of Normative Instruction RFB No 2,249, dated 6 February 2025, which appears to have the sole purpose of extending the deadline for submitting the RTC for transactions carried out at the beginning of the year: “Exceptionally, the registration of the transactions referred to in the caput, related to agreements entered into in Jan- uary and February 2025, may be carried out until March 31, 2025.” 9. Alignment With OECD Transfer Pricing Guidelines 9.1 Alignment and Differences Brazilian legislation for transfer pricing was sig - nificantly modified in 2023 through the enact - ment of Law 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 Trans- fer: Improvement of the Brazilian Tax System and Promotion of Trade and Investment” , signed jointly by the Federal Revenue Service and the OECD: “Recognizing that the current Brazilian system weakens 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 compli-
ance, as well as the risks of persistent double taxation and loss of revenue taxes. Full align- ment is defined as the adoption of and commit - ment to the international transfer pricing stand- ard, including the arm’s length principle and the guidelines for its application contained in the OECD Guidelines.” Total alignment does not imply completely abandoning the objectives of simplicity, ease of administration and tax com - pliance and legal certainty in tax matters. These objectives can be achieved through the intro - duction of safe harbors designed in accordance with the arm’s length principle, including careful - ly considered input criteria, to ensure that trans - fer pricing results are broadly consistent with the results produced by the full comparability analysis in accordance 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 incor- porates fundamental principles and concepts covered by the OECD instruments on transfer pricing and contained in the OECD Guidelines on Transfer Pricing for Multinational Enterprises and Tax Administrations (2022) and reflected in the United Nations Practical Manual on Transfer Pricing for Developing Countries (2021). There are some provisions that, while still aligned with international standards, adopt a more prescrip- tive approach due to the traditions of the Bra- zilian tax system. These devices aim to reduce the burden of complying with tax obligations and provide legal certainty in tax matters for taxpayers and also improve the efficiency of tax administra - tion. However, such provisions, even following such an approach, offer taxpayers the possibility of determining results based on analysis of facts and circumstances in a manner consistent with the international standard.”
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