Brazil: Brazilian Federal Revenue makes available for public consultation the first draft of the Normative Ruling that will regulate the new Transfer Pricing rules


In brief

On July 03, the Special Secretariat of the Federal Revenue (“SRFB”) published the Public Consultation RFB n. 01/2023, along with the first draft of the Normative Ruling (“IN”) that will regulate the new Brazilian transfer pricing system, introduced by Law n. 14.596/2023.

Interested parties may make suggestions and contributions regarding any subject matter dealt with in the first version of the IN, or even others that have not been directly addressed in the draft but are related to transfer pricing. The deadline for submissions is July 25, 2023 and these should be sent to, preferably in pdf format.

The first version of the IN bears some importance guidance, having been addressed most of the topics covered by Law No. 14,596/2023, although some not entirely.

Below we highlight some points of greater relevance.

In more detail

1) Early adoption of the effects of Law n. 14.596/2023 for FY 2023 – Postponement of the option’s deadline

Unlike the provisions of Article 2 of Normative Ruling RFB n. 2,132/2023, the text made available for public consultation provides for the postponement of the deadline for early adoption to 2023 of the provisions of Law n. 14,596/2023.

Article 70 of the first draft proposes that the option for anticipation of the effects should be formalized in the period from November 1 to 30, 2023, observing the same procedures previously defined by IN n. 2,132/2023: (i) completion of the form attached to the IN; (ii) filing of a digital proceeding through the Portal e-CAC.

However, it is worth highlighting that as the IN was not yet published but only made available for consultation, the deadline is not yet in force, being subject to future changes.

2) Compensatory Adjustment – Term for completion

The first draft also brought new guidelines related to the performance of compensatory adjustments. Paragraph 2 of Article 50 of the first version of the IN provides that the compensatory adjustment may be implemented until the filing of the Tax Accounting Bookkeeping (“ECF”), provided that the corresponding accounting record is made in the accounting bookkeeping of the Brazilian legal entity of the calendar year related to the calculation period to which a given controlled transaction refers.

3) Safe-Harbours – Low value-added transactions

Article 52 of the first version of the IN brought the possibility for the RFB to establish simplification measures for the application of the arm’s length principle, that is, safe-harbours.

Article 53 provides for a safe-harbour for low value-added transactions, requiring, a priori, a margin of 5% – minimum in the case where the provider is a legal entity domiciled in Brazil and maximum if it is a related party abroad – over the costs related to these transactions.

The tax group of Trench Rossi Watanabe is available to discuss the details of the text available for public consultation, as well as to assist its clients in any suggestions or requests for clarifications that they are interested in submitting to the RFB.

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