By Guilherme Martins and João Pedro Riccioppo Cerqueira Gimenes*

In order to regulate the provisions of Law No. 14,596/2023, published in April of this year, the Federal Revenue Service (RFB) published Normative Instruction No. 2,161/2023, which provides for the Transfer Pricing rules applicable to transactions between parties domiciled in Brazil and their related parties abroad.

Both regulations come from initiatives by the Federal Government and the RFB to align the Brazilian legal system with the best practices adopted by the Organization for Economic Cooperation and Development (“OECD”) model.

Transfer Pricing is interpreted as rules that aim to level the tax burden borne by companies with related parties around the world and companies located here, with the primary objective of observing equality in the application of tax law and, secondly, with a view to repressing tax evasion and/or avoidance by multinational business groups.

The method applied, broadly, contemplates an equalization of the calculation basis for Corporate Income Tax (IRPJ) and Social Contribution on Net Profit (CSLL) applicable to transactions carried out between related parties – from the same economic group – with the calculation basis for the same taxes usually seen in transactions carried out by unrelated parties, that is, subject to ordinary market prices, conditions less beneficial than the former.

Still in the drafting phase of the Normative Instruction, in July of this year, after the publication of Law No. 14,596/2023 (new transfer pricing law), the Federal Revenue Service called taxpayers through Public Consultation RFB No. 01/2023, in which it allowed interested parties to present comments and suggestions to the text.

Our tax team is available to provide any clarifications.

(With the collaboration of Pedro Antônio GM Buzas)