Brazil Senate Endorses OECD Transfer Pricing Guidelines

Brazil continues to move forward with the legislative steps needed to align Brazil's transfer pricing regulatory framework with the Organization for Economic Cooperation and Development's (OECD) Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations 2022 ("OECD Guidelines"). All that remains at this time is for President da Silva to sign the legislation into law. The OECD Guidelines are the international standard for transfer pricing methodology by which more than 70 countries adhere to and follow. Brazil, the only OECD member country yet to adopt the OECD's arm's length principle, will finally join with the passing of this new legislation.

Once this is signed into law, taxpayers in Brazil will have the option to adopt the new transfer pricing rules in 2023, and these rules will become compulsory for all taxpayers in 2024. Early adoption will benefit many multinationals that prefer to have globally harmonized transfer pricing systems