According to the decision handed down by the 1st Panel, 3rd Chamber, 1st Section, of the Administrative Board of Tax Appeals the application of the PRL20 method (Resale Price less Profit – 20% profit margin) is valid when there is no value added to the imported products.

Accordingly, the essence of the matter was to determine the definition of the term “production” for this purpose, and the judging members considered, on that occasion, that the definition should not be the same one set by the IPI (Tax on Manufactured Products) rule. In the actual case, the company only packed the imported medicine tablets, performing a mere blister packing and placing the product in cardboard cases with the respective brand, only to comply with requirements of the local sanitary surveillance agency and, thus, enable the products to be sold in Brazil.

(Panel Decision 1301-000.995. Available at: <>. Access in: Apr. 2013).