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.
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Nair & Co., the leader in international business expansion services, provides accounting, HR, legal, tax
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a single-point-of-contact, supported by internal teams of experienced advisors, helps clients expand
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