Brazil Transfer Pricing Law Poses Tax Credit Issues for Companies

Brazil’s newly passed transfer pricing bill would give multinationals a choice of adopting the rules a year earlier than the law’s effective date, but there’s a catch: They don’t have clarity on whether they would qualify for foreign tax credits in the US for taxes they pay in Brazil.

While the Brazilian measure would apply the new system on a mandatory basis in 2024, it would also let companies choose to apply the new rules this year. They would have until September to decide whether to opt-in for this year, but it’s unclear how the US foreign tax credit rules ...