In the complex environment of international taxation, Transfer Pricing is a key element to ensure tax fairness between multinational companies and the tax authorities of the countries in which they operate. Brazil, aligned with this reality, has enacted Normative Instruction N°2161, which establishes specific provisions on the Global File and its significance in complying with the tax regulations of the country.
The Importance of the Global File
The Global File, according to Article 55 of the regulations, is a fundamental tool for providing a complete understanding of the structure and activities of a multinational group. This file not only provides a detailed description of the group’s transactions but also contributes to ensuring the alignment of the Transfer Pricing policies with market conditions and compliance with regulatory requirements.
Global Filing Obligation
According to Article 57 of the regulations, the obligation to prepare and file the Global File is determined by the total value of the controlled transactions carried out by the taxpayer in the previous calendar year. If such value is equal to or greater than R$ 15,000,000.00 (fifteen million reais), the taxpayer must file the Global File. Conversely, if the total value of the controlled transactions is lower, the filing obligation is waived.
Detailed Content of the Global File
Article 58 of the regulation details the essential elements to be included in the Global File to comply with the Brazilian tax regulations:
- Organigrama del Grupo Multinacional: Organizational Chart of the Multinational Group: The file must display an organizational chart illustrating the hierarchical structure of the group, including the geographic location of each entity. This visual representation is essential to understanding the complexity and global distribution of the group.
- Description of Activities: A detailed description of the multinational group’s activities is required, emphasizing those generating the greatest profits. In addition, a functional analysis should be performed to identify the main functions, assets, and risks associated with each entity of the group.
- Information on Intangibles: The file should include information on the group’s strategy regarding the development, ownership, and exploitation of intangibles, such as patents, trademarks, and know-how. This section should also identify the main contracts related to intangibles and describe the applicable Transfer Pricing policies.
- Financial Transactions: The financing policy of the multinational group must be described in detail, as well as information on the entities that manage the main financial functions. This includes the identification of the entities that centralize financial activities and the countries from which they operate.
- Agreements and Resolutions: The file should provide a list of the previous Transfer Pricing agreements, resolutions, and other relevant documents affecting the allocation of income and expenses among countries. These agreements are essential to ensure consistency in the Transfer Pricing policies application within the group.
- Consolidated Financial Statements: Finally, the filing of the most recent consolidated financial statements of the multinational group is required. These financial statements provide an overview of the financial health and the performance of the group as a whole.
