Brazil: New regulation for the adoption of the new transfer pricing rules

published on 5 October 2023 | reading time approx. 1 minute

The Normative Instruction No. 2.161, published on 28 September 2023, establishes how the new transfer pricing rules will be applied to transactions between Brazilian companies and related parties abroad.

These rules affect the calculation of Corporate Income Tax (IRPJ) and Social Contribution on Net Profits (CSLL) for companies domiciled in Brazil, but also transactions carried out by Brazilian companies with entities characterized in the cases provided for in articles 24 and 24-A of Law No. 9.430/1996.

Bearing in mind that these new rules seek to align with the OECD guidelines, as described in the report "OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administration 2022", the report should be understood as a subsidiary source for the interpretation of transfer pricing control rules unless the rules set out in the report are contrary to or inconsistent with Law 14,596/2023, the Normative Instruction in question or other RFB normative acts.

Beginning in the year of 2024 the new transfer pricing rules are mandatory. However, taxpayers have the choice to voluntarily adopt the new rules for the year of 2023. This early adoption must be formalized through e-CAC and can be carried out between 1 September 2023 and 31 December 2023.