Law 14596 was published on June 15th, 2023, providing for the new Brazilian transfer pricing rules, substantially changing the legislation currently in force, for the purposes of alignment with the OECD TP guidelines.
Law 14596 results from the conversion of Provisional Measure (MP) 1152, published in the end of 2022, and applies to the calculation of the Corporate Income Tax (IRPJ) and the Social Contribution on Net Profits (CSLL).
The law comes into force on January 1st, 2024, but the taxpayer is allowed to choose for its early application as of January 1st, 2023.
According to the Normative Instruction of the Brazilian Federal Revenue Service nº 2132/23 (IN), this option for the early adoption must be formalized in September 2023 by means of a digital procedure in the Virtual Service Center Portal (“Portal e-CAC”). Under the terms of the IN, the option will be irreversible. It is recommended that the effects of the early adoption be carefully studied.
In addition to the significant changes to the Brazilian transfer pricing legislation, the new law also revokes the royalty deductibility rules for Corporate Income Tax (IRPJ) purposes that have been in force since the 1960s.
Law 14596 is still pending regulation by the Brazilian Federal Revenue. Read more
