On September 28, 2023, the RFB (Receita Federal do Brasil – Brazilian Federal Revenue Service) issued Normative Instruction No. 2161/2023, which regulates the new Transfer Pricing regime to transactions between Brazilian companies and related parties abroad, established in Law 14.596/23.
The Normative Instruction No. 2161/2023 covers the general provisions, including the Arm’s Length Principle, controlled transactions, and related parties, among others. In addition, it contains provisions on Transfer Pricing methods and documentation requirements, including the Local Report and the Master File.
These rules affect the calculation of the IRPJ (Imposto da Renda da Pessoa Jurídica – Corporate Income Tax) and the CSLL (Contribuição Social sobre o Lucro Líquido – Social Contribution on Net Profits) 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.
The Normative Instruction No. 2161/2023 extends the deadline for taxpayers to opt for advance OECD Transfer Pricing Guidelines implementation until December 31, 2023. This advance adoption must be formalized through the e-CAC and may be effected between September 1, 2023, and December 31, 2023.
Thus, multinational companies operating in Brazil still have time to analyze the optimal Transfer Pricing strategy option for the fiscal year 2023.
As of 2024, the new Transfer Pricing rules are mandatory.