Through transfer price, the organization aims to evaluate and improve the performance of the related entity. The idea that transfer pricing is a mechanism designed only to avoid taxes is misleading. Actually, to transfer price is a sound and positive way to increase value. The 1979 OECD Report on Transfer Pricing and Multinational Enterprises emphasized that the term is neutral: "the consideration of transfer pricing problems should not be confused with the consideration of problems of tax fraud or tax avoidance, even though transfer pricing policies may be used for such purposes." The 1995 OECD Report went even further by furnishing a transfer pricing guideline for MNEs and tax administrations. Thus, the tax aspects of transfer pricing refer not to its use and existence, but to its abuse. Tax administrations aim to regulate, limit and penalize organizations that use transfer pricing as a mechanism to avoid taxation. This piece will address the legal approaches adopted in Brazil with regard to transfer pricing.
Alexandre Tadeu Seguim,
New Transfer Pricing Rules in Brazil,
Nw. J. Int'l L. & Bus.