Recent changes to Brazil’s transfer pricing rules mean multinational companies should start preparing for the application of new transaction methods, the arm’s length principle, and revised documentation requirements. Early adopters can start complying this year, though the new regime doesn’t take effect until 2024.
On June 12, 2023, Brazil enacted a new law, transforming its transfer pricing system by scrapping formulary apportionment and adopting a new framework aligned with the OECD guidelines and the arm’s length principle.
New System, New Challenges
The revised transfer pricing system addresses various flaws identified in the previous framework. It not only prevents income ...