The Brazilian tax authority (Receita Federal do Brazilâ€”RFB) recently presented a new decision allowing taxpayers to adjust their transfer pricing policies.
Online PR News – 25-March-2014 – Sunnyvale, CA – The Brazilian tax authority (Receita Federal do Brazilâ€”RFB) recently presented a new decision allowing taxpayers to adjust their transfer pricing policies. As a result, minimizing the possibility of contingent liabilities and tax adjustments, and/or avoidingthe double taxation from the previously misaligned transfer pricing rules, reports Nair & Co.â€™s International Tax team.
The Brazilian Transfer Pricing Rules allow for a â€śCost Plus Methodâ€ť whereby a 20% â€śProfit Marginâ€ťis added to production costs. Under this method, suppliers who manufacture goods are permitted a 20% gross margin on sales to Brazilian affiliates. It is the taxpayerâ€™s duty to collect all documents as proof of the cost and margin tested, if and when the 20% margin requirement is fulfilled.
As per new decision, a report issued by an independent company shall be accepted as evidence of the costs incurred by the tested party abroad.
Nair & Co. advises companies operating in Brazil to reconsider their approach towards Brazilian transfer pricing and adjust their policies accordingly.
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Nair & Co., the leader in international business expansion services, provides accounting, HR, legal, tax and compliance services for the set up and management of your international operations. Our model of a single-point-of-contact, supported by internal teams of experienced advisors, helps clients expand business and manage risk so they can focus on their core business and sustain growth with minimal risk, stress and cost. We support nearly 250 clients in over 70 countries. Nair & Co. is headquartered in Bristol, UK, has 450 employees and offices in China, India, Japan, Singapore, and the US. Learn more at www.nair-co.com
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