New legal landmark for Transfer Pricing – approved law defining new Brazilian transfer price rules

The Provisional Measure was sanctioned by the President of the Republic and converted into Law 14,596/23. This is an important step for Brazil, mainly for being closer to the international guidelines of the OECD, besides avoiding practices aimed at reducing the payment of Corporate Income Tax (IRPJ) and Social Contribution on Net Profits (CSLL).

 
Even though the text was approved without vetoes, one must pay attention to the new forms of calculation. The new law brought five methods to calculate Transfer Pricing, indicating that the PIC method – comparable independent price is the most appropriate. Furthermore, regarding cost sharing, the rules will also apply to intangible assets (such as royalties, patents, and trademarks, among others) the difficult assets to value will be responsible for considering the valuation for the Brazilian Federal Revenue Office.

 
It should be recalled that the rules will be mandatory from 1 January 2024, but the interested taxpayer may apply the rules already for the calendar year 2023, according to RFB Normative Ruling No. 2.132/2023.