The year 2025 marks a turning point in transfer pricing legislation in Brazil. With the new Law No. 14.596/2023 and the rules set forth by IN RFB No. 2.161/2023, Brazil begins to follow, in practice, the international OCDE standards. This requires companies to significantly change the way they manage their tax obligations.
More than technical changes, the new rules require Brazilian companies to revisit how they organize their tax processes, how they manage risks, and how they align strategy with day-to-day operations. In this article, we explore the main points of attention, expected impacts, and paths toward a safe and strategic adaptation.
Table of Contents
- What Is Transfer Pricing?
- Why Is Transfer Pricing a Priority Issue in 2025?
- What Are the Main Regulatory Changes?
- What Are the Strategic Business Impacts?
- How to Prepare for the New Transfer Pricing?
- What Is the Role of Senior Leadership and Specialized Consulting Firms?
- Conclusion and Next Strategic Steps
1. What Is Transfer Pricing?
Transfer Pricing refers to the determination of prices in transactions between related parties located in different jurisdictions. Its objective is to prevent the erosion of tax bases and the artificial shifting of profits to countries with lower taxation.
In today's world, where companies are increasingly interconnected, Transfer Pricing rules have become a key tool for governments to control tax revenues and are a priority for tax authorities.
2. Why Is Transfer Pricing a Priority Issue in 2025?
With the entry into force of Law No. 14.596/2023, Brazil definitively aligns itself with the OCDE guidelines, abandoning its traditional prescriptive approach in favor of the arm's length principle. As of 2025 (referring to the calendar year 2024), this new paradigm will be mandatory.
The challenge lies not only in meeting documentary requirements, but also in aligning the economic rationale of transactions with their operational and strategic substance. As international studies (McGuire Sponsel, Chambers) indicate, the level of regulatory scrutiny will be quite high, especially in highly globalized sectors.
3. What Are the Main Regulatory Changes?
Formal Adoption of the Arm's Length Principle
The new legislation definitively incorporates the arm's length, meaning that transactions between related parties must be priced as if they were carried out between independent parties under normal market conditions. This principle requires a high degree of analytical detail, with emphasis on functions performed, risks assumed, and assets used by each party involved. This marks the end of Brazil's prescriptive approach and aligns with the international practices of the OCDE.
Implementation of Globally Recognized Methods
Brazilian legislation now recognizes methods such as:
- PIC – Comparable Uncontrolled Price
- PRL – Resale Price Method
- CPL – Cost Plus Method
- MLT – Transactional Net Margin Method
- MCL – Profit Split Method
In addition, other methods may be applied, provided that the alternative methodology produces a result consistent with what would be achieved in comparable transactions between unrelated parties.
The selection of the most appropriate method now takes into account the operational reality, the functions performed, and the risks assumed, requiring stronger technical and economic justification.
Convergence with the OCDE
The new Brazilian model adopts the OCDE pillars:
- Functional analysis (functions, assets, and risks)
- Robust economic comparability analysis
- Three-tiered documentation (Master File, Local File, Country-by-Country Report)
From the Prescriptive Approach to Functional Analysis
The fixed-margin model is replaced by the need to justify the economic rationale of each intercompany transaction, using market benchmarks and comparable adjustments.
4. What Are the Strategic Business Impacts?
Mandatory Documentation and Deadlines
In accordance with IN RFB No. 2.161/2023, the new regime requires the submission of three globally standardized documents:
- Master File: consolidated overview of the multinational group, including corporate structure, description of economic activities, and global transfer pricing policy.
- Local File: detailed breakdown of the Brazilian entity's operations, with comparability analyses, justification of methods, and segmented financial information.
- CbC Report (Country-by-Country): report by tax jurisdiction, with consolidated data on revenue, profits, taxes, and number of employees.
These files must be submitted digitally via e-CAC, in December 2025, in addition to the specific entries required in the Escrituração Contábil Fiscal (ECF).
Sanctions and Penalties for Non-Compliance
- Master File and Local File:
- Fine of 0.2% per month or fraction thereof on the taxpayer's gross revenue, in case of failure to submit on time;
- Fine of 3% on gross revenue, in case of submission that does not meet the requirements.
- Master File:
- Fine of 0.2% on the multinational group's consolidated revenue from the prior year, in case of inaccurate, incomplete, or omitted information.
- Other Penalties:
- Fine of 5% on the transaction amount, in case of obstruction of tax audits or non-compliance with requirements during tax procedures.
- Fine of 5% on the transaction amount, in case of obstruction of tax audits or non-compliance with requirements during tax procedures.
Fines range from R$ 20,000.00 (minimum) to R$ 5,000,000.00 (maximum).
Tax Governance and Regulatory Risks
The requirement for in-depth documentation, integrated with accounting and operational data, demands a high level of tax governance. The absence of alignment between tax strategy and operational reality may lead to assessments, adjustments, and reputational impacts.
Systemic and Operational Implications
Companies will need to integrate financial, accounting, and logistics data to meet the new requirements, which will require a review of data architecture, internal controls, and ERPs.
5. How to Prepare for the New Transfer Pricing?
Continuous Integration and Periodic Review
Compliance with the new regime should not be treated as a standalone annual deliverable, but as a continuous process of monitoring and adjustment. Companies will need to regularly review intercompany transactions, recalibrate margins, and dynamically validate methodologies.
Overcoming Regulatory Reconciliation Challenges
Despite the alignment with the OCDE, Brazil has retained certain characteristics, such as the application of fixed margins in specific methods and local documentation requirements. This means that multinational groups will have to simultaneously comply with Brazilian standards and international guidelines.
Tax Maturity Assessment
Assess the current stage of the company's tax governance structure, identify documentation gaps, and map implicit risks in ongoing transactions.
Tax Maturity Assessment
Assess the current stage of the company's tax governance structure, identify documentation gaps, and map implicit risks in ongoing transactions.
Redesign of Transfer Pricing Policies
It will be necessary to update internal policies to reflect the business rationale, demonstrating profit allocation in accordance with functions performed and risks assumed.
Technology and Data Architecture
The new compliance requirements demand data visibility and integration. Tax automation tools, tax BI solutions, and data integration platforms will be key competitive differentiators.
6. What Is the Role of Senior Leadership and Specialized Consulting Firms?
C-Level involvement is essential. Studies such as those published by The Tax Adviser indicate that the perception of Transfer Pricing must shift from the operational sphere to the strategic sphere. CFOs, CEOs, and Boards need to recognize the risks and opportunities of this new landscape.
Consulting firms contribute not only through tax expertise, but also through their ability to simulate scenarios, identify risks, support strategic decisions, and generate real-time insights.
7. Conclusion and Next Strategic Steps
Transfer Pricing 2025 is more than a tax change. It is a regulatory inflection point that impacts governance, compliance, and business strategy.
Companies that prioritize this topic, backed by technology and qualified support, will be better positioned to comply with the law, generate value, and reduce risks in a complex tax environment.
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