Ruling No. 427/2013 was enacted by the Ministry of Finance in order to establish spread margins for the purposes of controlling transfer prices in financial transactions with related parties or with parties that reside in low tax jurisdictions or benefit from a privileged tax regime. Notwithstanding the new wording of Section 22 of Law No. 9,430/96 having been in force since January 1st, 2013, this spread margin still had to be ruled by the Minister of Finance.

For the purposes of deduction of financial expenses, Ruling 427 provides for a maximum spread margin of 3.5% to agreements in which the Brazilian company is the debtor. If it is the credit holder, the minimum spread margin for the purpose of revenue acknowledgement is of 2.5%.

As provided by Ruling 427, the spread margin of 3.5% to the debtor is valid as of January 1st, 2013. For the credit holder, the spread margin is valid as of the publication of Ruling 427, and this is equal to zero during the period between January 1st, 2013, and the day Ruling 427 was published.

(Ruling of the Ministry of Finance No. 427, 07.30.2013, Official Gazette of 08.02.2013).