Transfer Pricing And International Trade In Brazil

The major step to be taken by the Brazilian government regarding its future tax reform is to raise awareness of the role it has to play in the globalized world. Despite all the efforts to import transfer pricing widely applied rules to Brazil, local tax policy does not seem to take law and business globalization seriously enough.

Brazil has struggled to improve its economic performance in a new healthy global trade order where India and China have had impressive growth. There are many reasons why Brazil economic performance is well below its desired level, but one of the most important is its taxation policy.

Transfer pricing in Brazil is strictly regulated. Although the applicable rules were inspired by OECD (Organization for Economic Co-operation and Development) models, local statutes adopted certain criteria and restrictions that are not available in the OECD rules that initially guided them. For example, it is mandatory to apply inflexible gross margins in order to calculate