Transfer Pricing in Brazil: Timing is Everything

On January 1, 2024, Brazil—one of the world’s largest economies—officially shifted from its traditional, formula-based transfer pricing system to an arm’s length standard largely consistent with the 2022 OECD Transfer Pricing Guidelines (OECD Guidelines). This significant shift from the previous system, which relied upon Brazil-specific transfer pricing methods based on standard fixed gross margins or mark-ups, has left many taxpayers grappling with the implications. While taxpayers had the option to apply the new rules to the 2023 taxable period, most taxpayers opted for the mandatory adoption in 2024 and – while the adoption started January 1, 2024 - are currently ...