Machado Meyer tax partner Fernando Colucci joins Skadden’s David Farhat, Loren Ponds, Eman Cuyler and Stefane Victor to explore Brazil's historic shift from a 27-year formulaic transfer pricing system to full OECD compliance. As he explains, “We moved from a very strict, very formulaic approach to a simple, a direct import of the arm's-length principle.” Tune in for his insights on dramatic changes facing multinational enterprises and Brazil's notorious 75% penalty system that raises the stakes on compliance decisions.
🗝️ Key Points 🗝️
Top takeaways from this episode
- The Formula-to-Function Flip: Brazil abandoned 27 years of fixed profit margins in favor of the full OECD arm's-length principle, requiring companies to conduct detailed functional analyses for the first time.
- All-or-Nothing Penalties: Brazil's unique 75% penalty system creates stark choices: Accept the tax authority's adjustment with no penalty or challenge it and face penalties on any sustained portion.
- Intangibles Enter the Game: Previously excluded from transfer pricing rules, intangible transactions are now subject to OECD guidelines, creating new compliance challenges.
- Limited Relief Mechanisms: While Brazil introduced its first APA program, it operates more like a written consultation process than traditional APAs, and the country has never executed a MAP case despite having treaty provisions.
💡 Featured Guest💡
Name: Fernando Colucci
What he does: Fernando provides legal and tax assistance in M&A operations, restructurings, international taxation, international treaties, transfer pricing, tax planning, international investments taxation, asset and succession planning.
Organization: Machado Meyer
Words of wisdom: “My recommendation here is to start with a thorough risk assessment. So, understand your intercompany transactions, identify potential areas of concern. Getting prepared, that's the motive.”
Connect: LinkedIn
Connect with Skadden
☑️ Follow us on X and LinkedIn.
☑️ Subscribe to GILTI Conscience on Apple Podcasts, Spotify or your favorite podcast app.
☑️ Let us know what topics you would like to hear about on GILTI Conscience by emailing our executive producer at
Popular Podcasts
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Special Summer Offer: Exclusively on Apple Podcasts, try our Dateline Premium subscription completely free for one month! With Dateline Premium, you get every episode ad-free plus exclusive bonus content.
The Breakfast Club
The World's Most Dangerous Morning Show, The Breakfast Club, With DJ Envy, Jess Hilarious, And Charlamagne Tha God!
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.