The deadline for filing documents related to Transfer Pricing studies is the last business day of July of the following year.
Relevant Documentation Filing
The deadline for filing documents related to Transfer Pricing studies is the last business day of July of the following year. It should also be noted that the Brazilian Transfer Pricing regulations require the Transfer Pricing documentation to be filed annually along with the corporate tax return.
Entities Obligated to File the Transfer Pricing Study
According to Articles 18 and 19 of the Law, the Transfer Pricing rules apply to the following import and export transactions:
- Related-party transactions: Cost or expense related to the acquisition of goods, services, and rights for the taxpayer in Brazil.
- Related-party transactions: Income from the sale of goods, services, and rights for the taxpayer resident.
Documents to Be Filed?
Unlike other Latin American legislation, the Brazilian Transfer Pricing legislation has not yet introduced the first two levels of documentation required by Action 13 of the BEPS (Base and Erosion and Profit Shifting) Plan, such as the Local Report and the Master File.
Conversely, it has regulated the third level of documentation, the Country-by-Country Report, through Normative Instruction No. 1681 issued by the RFB (Receita Federal do Brasil – Internal Revenue of Brazil/Brazilian IRS) in December 2016.
In this regard, the Country-by-Country Report must be prepared by the Headquartered taxpayers who have consolidated revenues exceeding 750,000,000 euros or resident members in Brazil who must not file the CbC under the jurisdiction of the headquarters.
Filing Failure
In case of a late filing of the declaration, the obligated taxpayers will be subject to a fine of R $1,500.00 for each month or fraction of delay. Likewise, if the declaration has been made inaccurately, they will be subject to a penalty of 3% on the value of the omitted transactions.
Source: Siglo BPO 09/08/21
