Transfer Pricing 2025

BRAZIL Law and Practice Contributed by: Paulo Honório de Castro Júnior, Bruno Marques Feitosa and Urick Soares, William Freire Advogados

member countries of the OECD, promulgated through Decree No 8,842/2016. • FACTA – Foreign Account Tax Compliance Act, Agreement signed between Brazil and the USA, promulgated through Decree No 8,506/2015, which provides for the regula - tion of tax accounts and investments that are outside the United States, but that belong to North American citizens (US persons). • Argentina – Agreement on the Exchange of Information for Tax Purposes Relating to Pre - vious Periods. • United Kingdom – Agreement for the Exchange of Information Relating to Taxes. • Switzerland – Agreement for the Exchange of Information Relating to Taxes. Finally, customs co-operation agreements must also be mentioned – mutual recognition agree - ments and technical co-operation agreements, through which there is mutual dialogue and col - laboration between Brazilian tax authorities and Currently, Brazil does not have a specific treaty or regulatory instrument that formally governs the practice of joint audits with other jurisdic - tions. 7. Advance Pricing Agreements (APAs) 7.1 Programmes Allowing for Rulings Regarding Transfer Pricing Law No 14,596/2023 implemented the proce - dures for Simplification Measures and Other Measures and the Specific Consultation Process in Matters of Transfer Pricing. other jurisdictions. 6.2 Joint Audits

In August 2024, the Brazilian Federal Revenue Service (RFB) launched a public consultation on a draft Normative Instruction aimed at regulating Advance Pricing Agreements (APAs). The con - sultation period was open from 29 August to 30 September 2024. As of March 2025, the final version of the regula - tion had not yet been published. Therefore, the comments provided in this section are based solely on the draft released for public consulta - tion. The APA model proposed by the RFB is primarily unilateral, which represents a different approach from the one recommended by the Organization for Economic Co-operation and Development (OECD). The procedure proposed by the RFB largely fol - lows the structure recommended by the OECD, comprising phases such as preliminary consul - tation, submission of a formal proposal, techni - cal analysis, negotiation, and formalisation of the agreement. The draft also emphasises the importance of critical assumptions, in line with the OECD’s transfer pricing guidelines, demonstrating con - ceptual alignment with international best prac - tices. From a practical standpoint, the Brazilian APA may establish simplified methods for: • determining the price, consideration, or profit margin, based on the arm’s length principle; • assessing comparability, including the use of interquartile ranges or standardised adjust - ments;

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