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 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 transfer pricing rules related to the Corporate Income Tax (IRPJ) and the Social Contribution on Net Profit (CSLL). These provisions apply to determine the calculation base of IRPJ and CSLL for legal entities domiciled in Brazil that perform controlled transactions with related parties abroad. 

In line with these developments, the arm’s length principle is defined in Article 2 of said law. This article stipulates that, to determine the tax calculation base referred to in the single paragraph of Art. 1 of this Law, the terms and conditions of a related operation shall be established in accordance with those that would be established between unrelated parties in comparable transactions. 

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

Finally, in September 2023, the Brazilian Federal Revenue Secretariat (RFB) 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 Minus Profit (RPM)
  • Cost Plus Method (CPM)
  • Transactional Net Margin Method (TNMM)
  • Profit Split Method (PSM)
  • Other methods

Which entities are obligated?

Articles 56 and 57 of Normative Instruction RFB No. 2161 establish that taxpayers are obligated to submit the following declarations:

  • Country-by-Country Report: Any entity with tax residence in Brazil acting as the ultimate controlling shareholder of a multinational group is obligated to submit 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 converted 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 File (total transaction value less than R$ 15 million), it should not submit the Global File.
  • Local File: Companies with a total value of controlled transactions before transfer pricing adjustments. Limit: R$ 500,000,000 or more for full 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 submitting documentation

  • Country-by-Country Report: The country-by-country report must be submitted annually along with the Tax Accounting (ECF) 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 the year 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 submission of documentation

Documents supporting compliance with transfer pricing regulations must be contemporaneously preserved and made available to the tax authority upon request.

Penalties for non-compliance

Penalties for non-compliance with transfer pricing matters are indicated in Article 66 of Normative Instruction RFB No. 2161.

  • Global and Local File: A fine of 0.2% per calendar month or fraction on the taxpayer’s gross revenue for the period in case of delayed submission. A fine of 3% of the taxpayer’s gross revenue for the period in case of submission 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.


Offices in Brazil
  • Av. Angélica, 688 – Higienópolis, São Paulo – SP, 01228-000, Brasil
  •  +55 11 3168-48655
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