On May 10, the Brazilian Federal Senate approved Bill of Law No. 8/2023, originated from Provisional Measure No. 1,152/2022, in order to introduce new transfer pricing rules in Brazil.
The Senate reproduced the wording of the project previously approved by the Chamber of Representatives entirely, despite the claim of some parliamentarians for the insertion of an amendment postponing the entry into force to 2025.
According to the Rapporteur, Senator Jayme Campos, the Brazilian transfer pricing legislation has been in conflict with the international practices for several years, reason why the new rules should be mandatory as of 2024 (with optional adoption for the calendar year of 2023).
The changes introduced by the Bill of Law are aligned with the OECD standards, representing one of the key developments for Brazil to become a member of the Organization.
The Bill of Law will now be analyzed by the President, who will be able to sanction or veto, entirely or partially, the text approved by the Senate, within 15 working days.
It is expected that Normative Rulings will be issued by the Brazilian tax authorities in order to regulate the new rules, especially in relation to: the selection of methods; indication of databases for identifying comparable transactions; conditions for adjustments; the form and conditions for submitting information and specific ancillary obligations; the procedures for submitting rulings requests and other simplification measures/ safe harbors.