On September 29, 2023, the Brazilian Federal Revenue published Normative Instruction RFB No. 2,161, aimed at regulating the provisions of the new transfer pricing legislation, Law No. 14,596 of June 14, 2023, aligning Brazil with the guidelines of the Organization for Economic Co-operation and Development (OECD).
Among the innovations introduced by IN No. 2,161/23 regarding the new transfer pricing rules, the following stand out:
- Designation of OECD Guidelines as subsidiary sources, as long as future changes are approved by the Special Secretariat of the Federal Revenue of Brazil;
- Elaboration of the definition of related parties by the new rules, including subsidiaries, branches, and any business units that constitute an economic or professional entity, including entities located in the same country;
- Application of transfer pricing control rules to more complex transactions involving third parties;
- Specific procedures for submitting the Global File and Digital File, with detailed specifications of the information to be provided during submissions;
- Detailing appropriate methods for determining transfer prices in controlled transactions, which may include Comparable Uncontrolled Price (CUP) method, Resale Price Method (RPM), Cost Plus Method (CPM), Transactional Net Margin Method (TNMM), Profit Split Method (PSM), or other consistent methods, as well as the possibility of combining methods;
- Amendment of the previously proposed 5% fine in the draft Normative Instruction, with penalties capped at 0.2% of gross revenue or 3% of gross revenue in the case of non-compliance with requirements.
It is important to highlight that the new rules become mandatory as of January 1, 2024, with the possibility of expressing interest in early adoption for the calendar year 2023 until December 31, 2023.
Our tax team is available to provide clarification and guidance on the subject addressed.
Co-authored by: Enrico Sarti e Lara Braga Maciel
