BRAZIL Law and Practice Contributed by: Paulo Honório de Castro Júnior, Bruno Marques Feitosa and Urick Soares, William Freire Advogados
William Freire Advogados Avenida Afonso Pena, 4,100 12th floor Building Atlântico Cruzeiro CEP 30130-009 Brazil Tel: +55 31 3261 / 7747 Email: paulo@williamfreire.com.br Web: www.williamfreire.com.br/?lang=en
1. Rules Governing Transfer Pricing 1.1 Statutes and Regulations In Brazil, transfer pricing rules are regulated by Federal Law No 14,596/2023, the application of which has been mandatory from the year 2024, and in Normative Instruction No 2,161/2023, published by the Federal Revenue Service, to better regulate the application of transfer pric - ing rules. Brazilian legislation also provides for the possi - bility of formalising a consultation with the Fed - eral Revenue Service, with the aim of clarifying doubts regarding the application of the rules. Such consultations, when publicly answered by the Federal Revenue Service, are inserted into the national legal system, notably as an instrument for interpreting tax rules and making it mandatory that any tax authorities obey the parameters established in the response to the consultation. 1.2 Current Regime and Recent Changes The first regulation of transfer prices in Brazil occurred in 1996, through the enactment of Law No 9,430/1996. The model then adopted pro - vided for the application of transfer pricing meth -
ods, whenever transactions with goods, services and rights were verified, as well as the payment or receipt of interest from related parties. Although there was a provision for the levy of transfer pricing rules on transactions involving “rights” (intangibles), none of the methods pro - vided for in the governing legislation were suf - ficient to test transactions of this nature, which made compliance with this obligation impossi - ble, which is why it was not possible to apply transfer pricing rules to this asset class. The concept of related parties was, primarily, based on the corporate link, direct or indirect, and the concept of significant influence was not adopt - ed. The methods provided for by the original wording of Law No 9,430/1996 allow them to be divided into two groups: (i) those whose essence is price comparison; and (ii) those that are limited to data collection and application of fixed margins. In the first, we have independent prices compared in imports, and sales prices in exports. In the second, we have the resale price minus profit, acquisition, or production cost plus profit, etc, in which there are margins set for profit, cost and transaction value. Those methods were
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