Transfer Pricing Brazil 2024 – Chambers and Partners

Contributed by: Paulo Honório de Castro Júnior and Bruno Marques Feitosa, William Freire Advogados

Summary

1. Rules Governing Transfer Pricing
   1.1 Statutes and Regulations
2. Definition of Control/Related Parties
   2.1 Application of Transfer Pricing Rules Controlled Transactions
3. Methods and Method Selection and Application
   3.1 Transfer Pricing Methods
   3.2 Unspecified Methods
   3.3 Hierarchy of Methods
   3.4 Ranges and Statistical Measures
   3.5 Comparability Adjustments
4. Intangibles
   4.1 Notable Rules
   4.2 Hard-to-Value Intangibles
   4.3 Cost Sharing/Cost Contribution Arrangements
5. Affirmative Adjustments
   5.1 Rules on Affirmative Transfer Pricing Adjustments
6. Cross-Border Information Sharing
   6.1 Sharing Taxpayer Information
7. Advance Pricing Agreements (APAs)
   7.1 Programmes Allowing for Rulings Regarding Transfer Pricing
   7.2 Administration of Programmes
   7.3 Co-ordination Between the APA Process and Mutual Agreement Procedures
   7.4 Limits on Taxpayers/Transactions Eligible for an APA
   7.5 APA Application Deadlines
   7.6 APA User Fees
   7.7 Duration of APA Cover
   7.8 Retroactive Effect for APAs
8. Penalties and Documentation
   8.1 Transfer Pricing Penalties and Defences
   8.2 Taxpayer Obligations Under the OECD Transfer Pricing Guidelines
9. Alignment With OECD Transfer Pricing Guidelines
   9.1 Alignment and Differences
   9.2 Arm’s Length Principle
   9.3 Impact of the Base Erosion and Profit Shifting (BEPS) Project
   9.4 Impact of BEPS 2.0
   9.5 Entities Bearing the Risk of Another Entity’s Operations
10. Relevance of the United Nations Practical Manual on Transfer Pricing
    10.1 Impact of UN Practical Manual on Transfer Pricing
11. Safe Harbours or Other Unique Rules
    11.1 Transfer Pricing Safe Harbours
    11.2 Rules on Savings Arising From Operating in the Jurisdiction
    11.3 Unique Transfer Pricing Rules or Practices
12. Co-ordination With Customs Valuation
    12.1 Co-ordination Requirements Between Transfer Pricing and Customs Valuation
13. Controversy Process
    13.1 Options and Requirements in Transfer Pricing Controversies
14. Judicial Precedent
    14.1 Judicial Precedent on Transfer Pricing
    14.2 Significant Court Rulings
15. Foreign Payment Restrictions
    15.1 Restrictions on Outbound Payments Relating to Uncontrolled Transactions
    15.2 Restrictions on Outbound Payments Relating to Controlled Transactions
    15.3 Effects of Other Countries’ Legal Restrictions
16. Transparency and Confidentiality
    16.1 Publication of Information on APAs or Transfer Pricing Audit Outcomes
    16.2 Use of “Secret Comparables”