Regulation Of Financial Transfer Pricing

On August 2nd, 2013, the Minister of Finance regulated that 3.5 percent is the spread to be adopted to calculate the maximum interest rate that a Brazilian company may deduct from Corporate Income Taxes (IRPJ/CSLL) calculation bases, when the creditor is either an affiliated company domiciled outside Brazil, or a resident of a tax haven jurisdiction.

When the creditor is a Brazilian company and the debtor is either an affiliated company domiciled outside Brazil, or a resident of a tax haven jurisdiction, the applicable spread is 2.5 percent. For the period between January 2013 and August 2nd, 2013, this spread is reduced to zero.

The applicable spread must be added to the "basic" interest...