An overview by Demarest, Taxand Brazil
Brazil has recently introduced new transfer pricing rules, established under Law No. 14,596/23 and Normative Instruction No. 2,161/23, which introduce significant changes effective from 2024.
These rules will require companies to follow specific methods for calculating taxable revenue and deductible expenses in transactions with related parties or those in low-tax countries.
Experts from our Brazilian member firm Demarest have analysed these new rules in further detail here, which aim to ensure fair pricing similar to independent transactions and redefine what constitutes control in business relationships. While optional in 2023, these rules are mandatory from 2024 and will impact corporate taxes at a 34% rate.