RFB Ruling Instruction n. 1.312, Dec. 28.2012, DOU-I, Dec. 31.2012, regulated the changes established by Law n. 12.715, Sep. 17. 2012, DOU-I, Sep. 18.2012, with respect to the new rules on the control of transfer price among related parties.

Commodities

The Ruling Instruction determines that the Method of the Price Quoted upon Importation (Preço sob Cotação na Importação - PCI) and Method of the Price Quoted upon Exportation (Preço sob Cotação na Exportação - PECEX) will be applied to the commodities listed in the Ruling Instruction and its Attachment I, as well as other products traded on the commodities and futures stock exchanges according to the rule in its Attachment II (eg: Chicago Board of Trade – CBOT; Chicago Mercantile Exchange – CME; New York Mercantile Exchange – NYMEX; and Commodity Exchange – COMEX).

The Ruling Instruction establishes that the premium amount that will adjust the quotation prices of the commodities results from the market assessment, whether positive or negative, and must be added to the quotation of an international exchange or survey institute, considering also the variations of quality, features and substance content of the goods sold.

Exportation safe harbor – profitability

Until 2012, the legal entities that proved a net profit obtained with sales revenues over exportations to associated legal entities equal to or higher than 5% could prove the prices adopted with the operation documents. Beginning in calendar year 2013, such profitability was increased to 10%, and such safe harbor was restricted only to legal entities with net revenue from exportations to associated legal entities not exceeding 20% of the total of the net revenue from exportation.

Interest

RFB Ruling Instruction n. 1.312/12 was amended by RFB Ruling Instruction n. 1.322, Jan. 16. 2013, DOU-I, Jan. 18.2013, to make the adaptations to provisions of Law n. 12.766, Dec. 27.2012, DOU-I, Jan. 28.2012, with respect to the deduction limits of interest charged or credited between associated legal entities for the purposes of calculating the real profit. The adopted interest rate cannot exceed i) the market rate of sovereign bonds of the Federal Republic of Brazil issued in the foreign market in US dollars, in the event of operations in US dollars with a pre-fixed rate; ii) the market rate of sovereign bonds of the Federal Republic of Brazil issued in the foreign market in Brazilian Reais, in the event of operations in Reais abroad with a pre-fixed rate; and iii) LIBOR for a six-month term, in the other cases. When determining the limit a spread will be added to be defined by the Ministry of Finance. The new limits will be applied to the contracts beginning on January 1st, 2013, and any amendment and new pact will be deemed new contracts.

(Ruling Instruction RFB n. 1.312, Dec. 28.2012, DOU-I, Dec. 31.2012. Available at: <http://www.receita.fazenda.gov.br/Legislacao/Ins/2012/in13122012.htm>. RFB Ruling Instruction n. 1.322, Jan. 16.2013, DOU-I, Jan. 18.2013. Available at: <http://www.receita.fazenda.gov.br/Legislacao/Ins/2013/in13222013.htm>. Law n. 12.715, Sep. 17.2012, DOU-I, Jan. 18. 2013. Available at: <http://www.planalto.gov.br/ccivil_03/_ato2011-2014/2012/lei/l12715.htm>. Law n. 12.766, Dec. 27. 2012, DOU-I, Jan. 28. 2012. Available at: <http://www2.camara.leg.br/legin/fed/lei/2012/lei-12766-27-dezembro-2012-774840-publicacaooriginal-138470-pl.html>. Access in: Jan. 2013).