On 24 February 2023, the Brazilian Federal Revenue Office published the Normative Instruction No. 2.132 which establishes the regulation of the taxpayer’s choice to apply the new transfer pricing rules according to Provisional Measure (PM) No. 1.152/2022 to the controlled transactions in 2023.
The instruction provides for (i) the formalization and the effects of the election, (ii) adjustments to the Brazilian corporate tax base (CIT), and (iii) the deductibility of royalties and technical, scientific, administrative or similar assistance.