Brazil: OECD-aligned transfer pricing rules passed by Senate

Brazilian Federal Senate unanimously passed legislation that would enact significant changes to the Brazilian transfer pricing system.

Brazilian Federal Senate unanimously passed legislation that would enact significant chang

The Brazilian Federal Senate yesterday unanimously passed Provisional Measure No. 1,152/Conversion of Bill No 8., which would enact significant changes to the Brazilian transfer pricing system—shifting from Brazil’s historical, formula-based transfer pricing rules to an arm’s length standard consistent with the OECD Guidelines.

The government of Brazil issued Provisional Measure No. 1,152 on 29 December 2022, and the Brazilian parliament (both the Chamber of Deputies and the Senate) then had 120 days to transpose the draft legislation into law. Read TaxNewsFlash

In addition to introducing the arm’s length principle to Brazil’s transfer pricing system, Provisional Measure No. 1,152 would establish new transfer pricing methods and documentation requirements, and considerable changes to the treatment of intangible assets, financial transactions and business restructuring. Read TaxNewsFlash

The Chamber of Deputies passed Provisional Measure No. 1,152, on March 30, 2023 (read TaxNewsFlash) by a vote of 369 - 10. The now Bill of Conversion No. 8/2023 (Projeto de Lei de Conversão n. 8/2023) underwent some changes with regard to royalties, the tax authority’s ability to conduct secondary transfer adjustments, and commodities.

The conversion process gained steam in the Brazilian Federal Senate with two proposals of change being seriously discussed:

  • Postponing mandatory adoption from 1 January 2024 to 1 January 2025.
  • Application of reference prices published by Brazil’s National Agency of Petroleum, Natural Gas and Biofuels (Agência Nacional de Petróleo, Gás e Biocombustíveis (ANP)) for oil exports.

The bill unanimously adopted, however, included none of the changes discussed.

Next steps

The Brazilian president has to sign the legislation. KPMG tax professionals deem this as almost certain, since there are media reports that the government, in the form of Secretary of Finance Fernando Haddad, has intervened heavily to keep the text approved by the Chamber of Deputies.

In addition, KPMG tax professionals expect the Brazilian tax authorities (Receita Federal do Brasil or RFB) to publish comprehensive guidance on the application of the arm’s length principle, especially with regard to documentation requirements.

For more information, contact a KPMG tax professional in Brazil:

Ericson Amaral |

Edson Costa |

Henrique De Conti |

Sebastian Hoffmann |



The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.