The Arm’s Length Principle and Tax Practicability

Abstract

This paper analyzes the Arm’s Length principle, which sustains and underpins the entire new legal framework for transfer pricing, implemented in Brazil by Law 14.596, of June 14, 2023, in line with the international transfer pricing standard, bringing doctrinal positions under their practical applicability to, in sequence, present aspects related to the tax practicability, in face of the new legislation. Aiming to have a reference on the international experience, this article also presents a comparison on the arm’s length principle in the international scenario and aspects of litigation. At the end, some reflections on the conciliation of these principles are brought.