The Senate has
recently approved a Provisional Measure that introduces new rules on transfer
pricing in Brazil. This significant step aligns the country's regulations
with international tax standards defined by the Organization for Economic
Cooperation and Development (OECD).
Let's delve into the key details:
The Senate Plenary approved on May 10, 2023 Provisional Measure 1152/22, Projeto de Lei de Conversão (PLV) 8/2023, which establishes a new legal framework for transfer pricing in Brazil . Previously, the text had been approved by the Chamber of Deputies on March 30, 2023.
The objective of this new regulation is to adapt Brazil to the OECD rules on transfer pricing. Although the government does not anticipate a significant increase in revenue as a result of these changes, the main focus is on adapting Brazilian transfer pricing rules to international tax rules.
Transfer pricing rules revolve around determining the taxation of international transactions between related companies, commonly called controlled transactions. The introduction of these new rules will affect the corporate income tax (IRPJ) and the social contribution on net income (CSLL), mainly affecting multinationals operating in Brazil.
This measure signifies Brazil's commitment to international tax regulations and aims to increase transparency and fairness in cross-border transactions. By aligning with the OECD guidelines, Brazil is fostering a more cohesive and coherent approach to transfer pricing, facilitating smoother international business operations.
It is essential that companies, especially multinationals, stay up to date with these new regulations to ensure compliance and navigate the changing transfer pricing landscape in Brazil.