Who this guide is for
This guide is for groups in which the parent or an affiliate provides services to the Brazilian company, or the Brazilian company provides services to them: management, IT, finance, human resources and similar support.
It complements our guide on transfer pricing in Brazil, which covers the regime as a whole.
Short answer. Since 2024, services between related parties follow the arm's length principle of Law 14,596/2023. For a charge to stand, the service must give the receiving company a reasonable expectation of economic or commercial value, and the cost must be allocated in a way that reflects how the service is used.
General information as of November 2026. It does not replace the analysis of each case.
What counts as an intragroup service
The Law defines a service as any activity carried out by one party that results in benefits for one or more parties (art. 23, §1). The terms of a service between related parties follow the arm's length principle (art. 23, caput).
The benefit test
An activity is a service only if it gives the other party a reasonable expectation of economic or commercial value (art. 23, §2).
The Law says there is no benefit when the activity is a shareholder activity or when it duplicates a service the company already receives (art. 23, §3). Shareholder activities include, for example, those carried out for the shareholder to meet its own tax obligations (art. 23, §4).
| Situation | What the Law says |
|---|---|
| The activity is for the shareholder's own purposes | No benefit for the Brazilian company (art. 23, §3, I and §4) |
| The company already receives the same service | No benefit: duplication (art. 23, §3, II) |
| No benefit, but a charge was made | The income tax and social contribution base is adjusted (art. 23, §5) |
| A benefit that arises only incidentally | It is not a service and gives no right to compensation (art. 23, §6) |
How the cost is calculated
- All the costs related to providing the service are considered (art. 24).
- Where possible, the service is charged directly to the company that receives it (art. 24, §1).
- When it is not possible, the cost is allocated indirectly with keys that reflect the nature and the use of the services (art. 24, §§2 and 3).
- There is no mark-up on pass-through costs when the provider performs no significant functions. A mark-up is allowed only on the costs of the functions it does perform (art. 24, §§4 and 5).
What to keep
The company presents documentation and information on (art. 34): the controlled transactions; the related parties involved; the structure and activities of the multinational group; and the global allocation of revenue and assets and the income tax paid by the group.
The form and deadlines are set by Revenue Service rules, which we confirm when setting up the file. For the first year of the regime, the Law asked the Revenue to allow additional time (art. 34, §2).
Penalties
Article 35 provides fines for failing to comply: for example, 0.2% of the gross revenue of the period per month of delay in filing, and 5% of the value of the transaction for information that is inaccurate, incomplete or omitted. The fines have a minimum of R$ 20,000 and a maximum of R$ 5,000,000 (art. 35, §1).
When the information is not provided, the tax authority may allocate functions, assets and risks to the Brazilian company and adopt reasonable estimates (art. 34, §1).
Charging and paying across borders
A charge between related parties also has tax effects of its own. Our guides on sending money out of Brazil and on services between Brazil and abroad cover them.
How we work
We list the services the group provides, test the benefit of each one, build the allocation and prepare the file with the contracts, the calculation and the evidence of the service.
Legal basis and sources
- Law 14,596/2023, arts. 23 and 24 (intragroup services), 34 (documentation) and 35 (penalties). In force since January 1, 2024 (art. 47).
The Revenue Service regulation that sets forms and deadlines changes, so we do not reproduce it here.