Post by account_disabled on Feb 27, 2024 5:50:53 GMT -5
Transfer pricing rules are restricted to a few methods, which, for the most part, are based on fixed profit margins or are incompatible with the companies' operations, thus being far from the reality of the business environment in which the taxpayer operates, causing serious distortions. Furthermore, the "arm's length" approach , as it is based on comparability, has proven to be unfeasible in many situations in the contemporary world, since transactions are becoming less and less standardized, making it impractical to verify similar ones for the purposes of comparison, especially with regard to complex financial transactions, intangibles and digital commerce.
To overcome this difficulty, the OECD guidelines also provide for another approach to the application of transfer prices, not yet incorporated into Brazilian legislation, which are the so-called "transactional profit methods" , based on the distribution of the consolidated profit of the linked companies, according to according to the functions, assets and risks attributed to each party. The view that has Chinese Europe Phone Number List prevailed in the market is that this approach tends to generate greater fiscal balance, in addition to allowing its application in similar operations between unrelated parties in the market. It is true that the OECD approach, as it is based on more subjective criteria, demands a higher compliance cost from the taxpayer, as there is a need to prepare reports and technical studies, which may lead to an increase in the degree of litigation.
This will be one of the possible challenges to be faced. In any case, this is an important step towards Brazil's eventual entry into the OECD and towards Brazil's desired greater integration into global trade, given that the alignment of transfer pricing rules is one of the international organization's central concerns. Only with actions like these, Brazil will finally be able to achieve greater insertion in the global economy.Either way, blockchain is not likely to become part of the tax system anytime soon. It is a new technology, which still needs to be consolidated and used by other economic agents, in addition to the need to adapt the systems used by taxpayers to calculate and collect taxes. Finally, all tax legislation would also need to be revisited to adapt to this new technology.
To overcome this difficulty, the OECD guidelines also provide for another approach to the application of transfer prices, not yet incorporated into Brazilian legislation, which are the so-called "transactional profit methods" , based on the distribution of the consolidated profit of the linked companies, according to according to the functions, assets and risks attributed to each party. The view that has Chinese Europe Phone Number List prevailed in the market is that this approach tends to generate greater fiscal balance, in addition to allowing its application in similar operations between unrelated parties in the market. It is true that the OECD approach, as it is based on more subjective criteria, demands a higher compliance cost from the taxpayer, as there is a need to prepare reports and technical studies, which may lead to an increase in the degree of litigation.
This will be one of the possible challenges to be faced. In any case, this is an important step towards Brazil's eventual entry into the OECD and towards Brazil's desired greater integration into global trade, given that the alignment of transfer pricing rules is one of the international organization's central concerns. Only with actions like these, Brazil will finally be able to achieve greater insertion in the global economy.Either way, blockchain is not likely to become part of the tax system anytime soon. It is a new technology, which still needs to be consolidated and used by other economic agents, in addition to the need to adapt the systems used by taxpayers to calculate and collect taxes. Finally, all tax legislation would also need to be revisited to adapt to this new technology.