|Lacaz Martins, Pereira Neto, Gurevich & Schoueri Advogados|
|Lilla, Huck, Otranto, Camargo Advogados|
|Trench, Rossi e Watanabe Advogados (associated with Baker & McKenzie)|
|BRATAX – Brazuna, Ruschmann e Soriano Sociedade de Advogados|
|Machado Meyer Sendacz e Opice Advogados|
|Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados|
|Rolim, Viotti & Leite Campos Advogados|
|Barbosa, Müssnich & Aragão|
|Castro, Barros, Sobral, Gomes Advogados|
|Siqueira Castro Advogados|
Brazilian authorities have been busy dealing with a political and economic crisis, meaning there have not been any significant direct changes to the transfer pricing market. However, the devaluation of the Brazilian real has affected taxpayers in more areas than one. Imports have become costly, and companies that use the resale price minus profit method for their inbound transactions have seen higher taxable adjustments.
Brazil's transfer pricing rules have been subject to a lot of criticism for being out of line with the OECD guidelines on transfer pricing, but the country is moving closer than ever before to the organisation's standards. "I think that in the last five years, Brazilian authorities have understood that being active with the OECD is very important to them," said Ana Utumi, head of tax at Tozzini Freire.
Luis Rogério Farinelli, head of transfer pricing at Machado Associados, said that the tax authorities tend to pay attention to the lowering of import prices in order to avoid the reduction of customs duties collection, but on the other side, in terms of corporate tax, the tax authorities pay attention to the artificial increase of import prices aimed at avoiding the transfer of more money abroad and reducing income tax in Brazil.
"The taxpayer can choose the best method available in the transfer pricing legislation in order to comply with the rules and not cause any adverse impact in the global transactions. This is quite different compared to the OECD models," said Farinelli.
But being out of line with the OECD guidelines does not necessarily mean an underdeveloped transfer pricing system. "My opinion is that we have a number of legislations, including in transfer pricing, that are even stricter than what BEPS recommends," Utumi said.
Whether Brazil will take the plunge and swap its own rules for the OECD guidelines, or even adopt some policies to draw closer to the international standard, is something many practitioners are uncertain about. "Brazil is already participating in OECD meetings as a collaborator (key partner)," said Ricardo da Silveira, partner at Machado Associados. "We don't know exactly if and when the country will become an OECD member, but I think it would bring very significant benefits for the country in terms of international commerce," he said.
Secretaria da Receita Federal do Brasil
Ministério da Fazenda
Esplanada dos Ministérios, Bloco P
CEP 70048-900, Brasilia, DF
Tel: +55 61 3412 2500
(As of June 2016)
|Corporate income tax rate||15% (a)|
|Capital gains tax||15/25% (b)|
|Branch tax||15% (c)|
|Branch remittance tax||n.a.|
Net operating losses (years)
|Capital gain up to R$ 5Million||15.0%|
|Capital gain from R$ 5MM to R$ 10MM||17.5%|
|Capital gain from R$ 10MM to R$ 30MM||20.0%|
|Capital gain higher than R$ MM||22.5%|
Source: Tax advisers from BMA – BMA, Müssnich, Aragão