RFB Normative Instruction No. 2,161, of 2023, was published today, which establishes the new rules for transfer pricing. The new legislation, which is aligned with OECD guidelines, applies to establish the allocation of profits made in operations between multinational companies of the same group for income taxation purposes (IRPJ/CSLL), being applied both to Brazilian companies with a presence in the abroad, as well as for companies from other countries that operate from Brazil.
IN RFB nº 2,161/23 deals with the general aspects of the new law, which constitute the fundamental part of the new system and which are applicable to all transactions that fall under its scope. It addresses practical issues regarding the application of the new regime and brings simplification measures for some transactions as well as for the fulfillment of ancillary obligations.
For the Undersecretary of Taxation and Litigation at the Federal Revenue, tax auditor Cláudia Pimentel, “the Normative Instruction was formulated with broad participation from society. We seek a constructive dialogue, we carry out a public consultation to collect comments and suggestions from interested parties. We received more than 40 suggestions from sectors such as commodities, pharmaceuticals, chemicals, automobiles, finance and electronic products, as well as associations, academia and consulting companies. The suggestions received were analyzed and helped in the preparation of the final text of the standard”.
The regulations also regulate the form and deadline that must be observed by taxpayers who wish to bring forward the application of the new system to 2023. These taxpayers must fill out a specific form and express their option from September to December on a definitive basis.
The Federal Revenue clarifies that certain provisions included in the Normative Instruction will be subject to more detailed regulation at a subsequent time, for example, the provisions that deal with transactions with commodities. The suggestions received in the public consultation related to these transactions will serve to assist in the preparation of this complementary regulation.
Historic
In December 2022, Provisional Measure No. 1,152 was issued, significantly modifying Brazilian transfer pricing rules. In June 2023, said Provisional Measure was converted into Law No. 14,596. This new regime must be applied mandatorily from 2024 or optionally for 2023 for taxpayers who wish to anticipate the effects of the new law.
The previous Brazilian transfer pricing system, published in the 90s, through Law No. 9,430, of 1996, is admittedly distant from international practice and contains several particularities that distance it from the international standard and that compromise the main objectives sought with the transfer pricing rules, that is, promoting the fair allocation of income in order to avoid situations of double non-taxation and double taxation. The new law is the result of a joint project developed between the Federal Revenue Service and the OECD.
Source: Federal Revenue of Brazil
