Law No. 14,596\/2023 revolutionized the transfer pricing (TP) rules in Brazil by replacing fixed margins with the Arm’s Length Principle, aligning with OECD guidelines. Thus, each transaction between related parties requires individualized analysis rather than relying on predefined percentages.<\/p>\n
Previously, companies calculated TP adjustments pragmatically by applying fixed margin formulas at the beginning of the following year and presenting these values to audits. Now, it is necessary to conduct functional and economic studies, detailing functions, assets, and risks of each party, as well as researching market comparables. This change represented a cultural shift, demanding greater planning and technical depth.<\/p>\n
In light of this new scenario, several challenges have emerged that require profound reorganizations in the fiscal and operational routines of companies. Below, we highlight some of the main obstacles encountered in the first year of the new legislation.<\/p>\n
1. Search for Local Comparables and Benchmarks: The lack of internal comparable data forced the use of international databases, requiring adjustments for country risks and market differences, which increases the cost and complexity of analyses. Professionals with advanced knowledge in comparison methodologies have become more in demand.<\/p>\n
2. Adjustments in Schedules and Deadlines: Another challenge faced by companies was the conflict of calendars. Under the old law, TP for the previous year was typically calculated at the beginning of the subsequent year, aligning with audit needs. However, with the new legislation, pragmatic calculations are no longer sufficient, as a comprehensive study covering various variables is now necessary. This scenario resulted in an accumulation of tasks and tighter deadlines, generating overload on teams, especially in larger organizations or those with complex international operations, which need to reconcile the completion of TP documentation with the financial statement audit period. This overlap of activities increased the risks of delays and rework, demanding better planning and greater coordination among involved areas. Companies that conducted ongoing monitoring throughout the year achieved better results in managing the calendar and avoided issues with delays and conflicts.<\/p>\n
3. Operational Difficulties and System Adjustments: The adoption of the new regime affects multiple departments, requiring adaptations in ERP systems, management reports, and account plans. To apply methods like the TNMM (Transactional Net Margin Method), it is necessary to segregate information by business line, something many companies did not previously practice. This integration between IT, Finance, Control, and Legal increases costs and risks of initial failures.<\/p>\n
The first year under the new rules highlighted challenges but also strengthened the alignment of national practices with international TP requirements. Although the lack of local comparables, the need for detailed studies, and increased costs are obstacles, the trend is toward gradual evolution. As in-depth analyses consolidate, the emergence of benchmarks suitable for the domestic market and specialized professionals is expected. This scenario contributes to more transparent, reliable, and globally aligned fiscal governance, benefiting companies involved in international operations.<\/p>\n","protected":false},"excerpt":{"rendered":"
Law No. 14,596\/2023 revolutionized the transfer pricing (TP) rules in Brazil by replacing fixed margins with the Arm’s Length Principle, aligning with OECD guidelines. Thus, each transaction between related parties requires individualized analysis rather than relying on predefined percentages. Previously, companies calculated TP adjustments pragmatically by applying fixed margin formulas at the beginning of the […]<\/p>\n","protected":false},"author":13,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[231,114],"tags":[],"coauthors":[74,91],"class_list":["post-22273","post","type-post","status-publish","format-standard","hentry","category-article","category-tax-advisory"],"acf":[],"yoast_head":"\n