Brazil: New Decision on Transfer Pricing Policy

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Brazil: New Decision on Transfer Pricing Policy

  1. 1. Brazil: New Decision on Transfer Pricing Policy (Bristol, UK) - The Brazilian tax authority (Receita Federal do Brazil—RFB) recently presented a new decision allowing taxpayers to adjust their transfer pricing policies. As a result, minimizing the possibility of contingent liabilities and tax adjustments, and/or avoidingthe double taxation from the previously misaligned transfer pricing rules, reports Nair & Co.’s International Tax team. The Brazilian Transfer Pricing Rules allow for a “Cost Plus Method” whereby a 20% “Profit Margin”is added to production costs. Under this method, suppliers who manufacture goods are permitted a 20% gross margin on sales to Brazilian affiliates. It is the taxpayer’s duty to collect all documents as proof of the cost and margin tested, if and when the 20% margin requirement is fulfilled. As per new decision, a report issued by an independent company shall be accepted as evidence of the costs incurred by the tested party abroad. Nair & Co. advises companies operating in Brazil to reconsider their approach towards Brazilian transfer pricing and adjust their policies accordingly. For more information about international expansion services or to learn more about our global regulatory compliance team please contact us. Subscribe to regular global tax compliance alerts from Nair & Co. Get the latest news releases and updates on international tax, HR, Finance, compliance and other legal news at Nair & Co. Industry Alerts. About Nair & Co.
  2. 2. Nair & Co., the leader in international business expansion services, provides accounting, HR, legal, tax and compliance services for the set up and management of your international operations. Our model of a single-point-of-contact, supported by internal teams of experienced advisors, helps clients expand business and manage risk so they can focus on their core business and sustain growth with minimal risk, stress and cost. We support nearly 250 clients in over 70 countries. Nair & Co. is headquartered in Bristol, UK, has 450 employees and offices in China, India, Japan, Singapore, and the US. Learn more at www.nair-co.com Media Contacts: For media enquiries or to learn to more about Nair & Co., please email us at media@nair-co.com or call Yvonne Smith at +1.408.501.8867

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