Transfer Pricing in Brazil

Transfer Pricing Legislation in Brazil: Receita Federal (Tax Agency)

The Transfer Pricing legislation in Brazil (Preços de Transferência no Brasil) began in the mid-1990s due to the growth of large multinational companies therein.

These rules were incorporated by Law No. 9430 of 1996, which is based on the guidelines established by the Organization for Economic Cooperation and Development (OECD). Conversely, there were its own particularities, which, in turn, resulted in divergences regarding the model proposed by the OECD.

In 2019, Brazil adopted a perspective open to further improvements through roundtable discussions on the adoption of new Transfer Pricing rules in the country that would be aligned with international standards. On December 18 of that year, the Receita Federal (Inland Revenue), jointly with the OECD, published a report on the Transfer Pricing application, which pointed out the major divergences between both.

Due to deficiencies identified in the 1996 legislation regarding Transfer Pricing, new rules were introduced through Provisional Measure No. 1.152 of December 28, 2022. This measure adjusted Brazilian Transfer Pricing rules to align with the OECD standards, specifically adopting the Arm’s Length Principle (ALP) for transactions between related parties abroad and unrelated parties in tax havens or with preferential tax regimes, resulting in a total corporate income tax burden lower than 17%. 

The regulatory evolution continued with the enactment of Law No. 14.596 of June 14, 2023, which establishes the Transfer Pricing rules related to the IRPJ (Imposto da Renda das Pessoas Jurídicas – Corporate Income Tax) and the CSLL (Contribuição Social sobre o Lucro Líquido – Social Contribution on Net Profit). These provisions apply to determine the calculation base of IRPJ and CSLL for legal entities domiciled in Brazil performing controlled transactions with related parties abroad. 

According to these procedures, the Arm’s Length Principle is defined in Article 2 of said Law. Hence, the tax calculation base referred to in the single paragraph of Art. 1 thereof is determined through the terms and conditions of those set among unrelated parties in comparable transactions. 

Additionally, on December 28, 2016, Normative Instruction RFB No. 1681 was enacted, which dictates and regulates the annual mandatory filing of the Country-by-Country Report, specifying obligations, deadlines, structure, and other related aspects. 

Finally, in September 2023, the Secretariat of the RFB (Receita Federal do Brasil – Brazilian Federal Revenue) issued Normative Instruction No. 2161, which regulates the new Transfer Pricing regime applicable to transactions between Brazilian companies and related parties abroad.

Transfer Pricing Methods in Brazil

Article 11 of Law No. 14.596 establishes the methods to be applied to demonstrate whether a transaction complies with the Arm’s Length Principle:

  • Comparable Uncontrolled Price (CUP)
  • Resale Price (RP)
  • Cost Plus (CP)
  • Transactional Net Margin (TNM)
  • Profit Split (PS)
  • Other methods

Obligated Entities

Articles 56 and 57 of Normative Instruction RFB No. 2161 establish that taxpayers must file the following declarations:

  • Country-by-Country Report: Any entity with tax residence in Brazil acting as the ultimate controlling shareholder of a multinational group must file the Country-by-Country Report. Limit: Total revenues less than R$ 2,260,000,000 if the ultimate controller is a tax resident in Brazil or 750,000,000 euros (or equivalent translated at the exchange rate of January 31, 2015) if the ultimate responsible resides in another jurisdiction for tax purposes.
  • Global File: If the company does not meet the obligation of the Local Report (total transaction value less than R$ 15 million), it should not submit the Global File.
  • Local Report: Companies with a total value of controlled transactions before Transfer Pricing adjustments. Limit: R$ 500,000,000 or more for further details. From R$ 15,000,000 to R$ 500,000,000 for specific but less extensive reports. Less than R$ 15,000,000 for exemption from local submission.

Deadline for Preparing and Filing Documentation

  • Country-by-Country Report: The Country-by-Country report must be filed annually along with the ECF (Escrituração Contábil Fiscal – Tax Bookkeeping) to the Public Digital Accounting System (Sped), without exempting the declarants from preserving the original documents.
  • Global and Local Files: The local and global files must be submitted within three months following the deadline for the submission of the Annual Corporate Income Tax Declaration (ECF) for the corresponding calendar year. For 2024 or following the provisions of Article 45 of Law No. 14.596 of 2023, the deadline will be the last business day of 2025 or 2024, respectively.

Preservation and Filing of Documentation

Documents supporting compliance with the Transfer Pricing regulations must be contemporaneously preserved and available to the tax authority upon request.

Non-compliance Penalties

Penalties for Transfer Pricing non-compliance are indicated in Article 66 of Normative Instruction RFB No. 2161.

  • Global and Local File: A fine of 0.2% per calendar month or a fraction of the taxpayer’s gross revenue for the period in case of late filing. A fine of 3% of the taxpayer’s gross revenue for the period in case of filing without meeting the requirements.
  • Global File: A fine of 0.2% on the multinational group’s consolidated revenues from the previous year if the data provided are inaccurate, incomplete, or omitted.


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  •  +55 11 3168-48655
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