Transfer pricing methods in Brazil

Which transfer pricing methods are used in your jurisdiction and what are the pros and cons of each method?

In relation to import transactions, four methods are available to determine the parameter price of products, services and rights imported by Brazilian companies:

• The comparable uncontrolled price method for import transactions (PCI) – the transfer price is based on the average price of identical or similar products or services in purchase and sale transactions carried out in the internal or external market under similar payment conditions. The benchmark must represent at least 5% of the value of the import transactions subject to transfer pricing rules. If the transactions in that given year do not reach the 5% threshold, the taxpayer may also consider the transactions performed in the previous year, adjusted by currency fluctuations.

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