Transfer pricing for offshore companies

Since the publication of law Nº 9,430/96, Brazilian transfer pricing legislation has aimed to avoid favourable prices in import and export transactions between affiliated companies, and interest on loans remitted or received, resulting in excess remittance of currency abroad. On January 8, the Brazilian government published provisional measure Nº 22, which brings transactions with foreign companies whose shareholders are unknown, even if such companies are not affiliated to a Brazilian company, under transfer pricing control. Obviously, one of the main purposes of this new rule is to control transactions involving companies incorporated in tax haven jurisdictions (offshore companies), even when these companies are unrelated in any way with the Brazilian company or its shareholders or affiliated companies.