On December 28 the Brazilian Government issued Law 12766/12 introducing changes to the Brazilian transfer pricing regulations regarding interest on related party transactions.
Until 2012 interest on related party loans were not subject to the Brazilian transfer pricing regulations provided the respective transaction was duly registered with the Brazilian Central Bank. On September 2012, Law 12715 stated that interest on related party loans, even if registered with the Brazilian Central Bank, would be deductible only up to an interest rate equal to LIBOR (six-month) plus a 3% annual spread. Also, Ministry of Finance could reduce this percentage or restate it. However, such provisions were changed before becoming effective.