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.