Brazil Suggests Arm’s Length Transfer Pricing Method (Correct)

Brazil is taking a long-awaited step that could both help the country get into the Organization for Economic Cooperation and Development and make sure that US multinationals in Brazil can continue using the US foreign tax credit.

The country would adopt the “arm’s length principle” for transfer pricing under a provisional measure issued Wednesday by Jair Bolsonaro, Brazil’s outgoing president, in his last official act. Brazil’s Congress must ratify the move within 120 calendar days for it to take effect. The next session of Congress begins Feb. 2.

Under the arm’s length principle, used ...