New Brazil Transfer Pricing Rules Pile on Costs, Audit Concerns

New Brazilian transfer pricing reporting rules for transactions involving commodities will add to compliance costs companies already face as Brazil revamps its rules to be in line with OECD’s standards, practitioners said.

The instructions released Dec. 31 by Receita Federal, the country’s revenue authority, require extensive reporting and documentation of transactions involving commodities and how companies calculate their transfer pricing positions.

Transfer pricing refers to the valuation of transactions between related companies. Conducting transactions at arm’s length requires intragroup transactions to be priced similarly to transactions between unrelated companies.

Brazil adopted new transfer pricing rules last year, effective this year, ...