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Brazil Reinforces Commitment to Align Its TP Rules with OECD Guidelines
On April 12th, Brazil’s Federal Ministry of Economy reaffirmed the country’s commitment towards fully implementing the arm’s length standard (ALS) into its transfer pricing (TP) rules, aligning the country’s current system with the OECD TPG. That measure is part of a bigger process of Brazil’s accession to the OECD. A specific draft of the legislation has been announced by the country’s Minister of Economy, Paulo Guedes, and is expected to reach the National Congress in August.
1. Recent Developments
After years of participation only as “key partner” to the OECD, yet with prominent roles in both the International Forum of Tax Administrations and the OECD/G20 BEPS Project, in May of 2017, Brazil applied for becoming a member of the organization.
The alignment of the Brazilian TP system with the OECD TPG, especially concerning the ALS, is a topic that has been considered by OECD members in Working Party 6 as the first critical step towards the country’s accession. Brazil’s TP system, while initially inspired by the OECD rules of 1979, did not update accordingly with the changes later made on the organization’s TPG, which causes constant conflict with other TP rules worldwide.
In order fo...