The implementation of Brazil’s new Transfer Pricing system, aligned with OECD guidelines, increases the documentation requirements for companies with covered transactions. For the 2025 tax year, it is essential to consider the documentation thresholds and applicable penalties.
-
TechnicalDocumentation and Thresholds
Depending on the volume of controlled transactions, companies must assess what type of documentation they are required to prepare:
- Full Local File: The applicability and scope of the Local File will depend on the volume of controlled operations and the criteria established by current Brazilian regulations.
- Simplified Local File: Must be assessed based on the company’s profile and transaction volume when transactions fall below the full threshold.
- General Threshold: The threshold for the applicability of the Local File is R$ 15 million.
- Global File: A document outlining the multinational group’s global policy and guidelines.
- Country-by-Country Report (CbC Report): Applicable to certain multinational groups based on their consolidated revenue.
-
Key DatesforFiscal Year 2025
Obligations are concentrated around two milestones in 2026:
- July 2026: Submission of the ECF, including sections related to Transfer Pricing.
- October 2026: Deadline for submitting the Local File and the Global File.
-
Penaltyand Fine Regime
Non-compliance or the submission of incorrect information entails significant financial risks. Penalties are calculated based on the taxpayer’s revenue:
- Penalty range: Penalties may range from 0.2% to 3%.
- Calculation basis: They are applied to the taxpayer’s gross revenue or to the consolidated revenue of the multinational group.
- Reasons for penalties: Late filing, incomplete, inaccurate, or omitted information, or documentation that does not meet applicable requirements.
-
Preventive Management
In addition to annual reports, commodity transactions may require monthly filings through the Commodity Transaction Registry (RTC). Early review is vital to detect inconsistencies between contracts, accounting records, and economic analysis before deadlines.
At TPC Group, we have a team of highly trained specialists to advise your company on compliance with new regulations in Brazil and throughout the region. Our global experience allows us to offer comprehensive solutions in the preparation of technical documentation and comparability analysis, ensuring that your intercompany transactions meet the highest international standards.
Source: ANDERSEN