Production cost-plus profit method has problems and benefits
July 27, 2010
Cristiane Magalhães and Victoria Rozsavolgyi Bortolin of Machado Associados advise taxpayers in Brazil on when it is best to look for alternative methods to use when establishing transfer prices.
Brazilian transfer pricing rules adopt pre-established profit margins in methods applicable to import transactions. According to the legislation in force, four methods can be used to calculate the benchmark on imports and acquisitions of assets, goods, services or rights carried out by a Brazilian company:
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