Due to the change in the United States tax policy, which no longer allows tax credits for taxes paid by legal entities in Brazil, MP No. 1,152 of 12/28/2022 was issued, which changed some rules for calculating IR and CSLL, incident on transfer pricing.
Among the changes introduced by the MP is that transactions between related parties must be similar to those between unrelated parties and the choice of the transfer pricing calculation method must consider real options, which prevents the taxpayer from using the least onerous method, that is, the one that results in the smallest adjustment in the tax calculation basis.
There was also a change in the impossibility of deducting royalties in some specific cases, from the CSLL calculation basis when calculating through real profit.
The MP also indicates the methods that may be used to calculate the transfer price and regulates the application of the Arm’s Length principle to some sectors of the economy.
The MP is in effect from 01/01/2024, with the exception of taxpayers who wish to apply the rules for the 2023 calendar year.
