Legislation - ORDINANCE

Regulates the percentages and profit margins to be applied on prices to be used as parameter on transactions of purchase and sale of goods, services and rights, carried out by entities resident or domiciled in Brazil, with related entities domiciled abroad.

The Ministry of Finance (MF) within his responsibilities, granted by item II, single paragraph, of Article 87 of the Brazilian Federal Constitution, and in view of the provisions of Law no. 11.196 (November 21, 2005), Article 36, hereby sets forth:

Art. 1. The requests for alteration of percentages dealt by items II and III of article 18 and items II, III and IV of § 3º and the caput of article 19 of law 9.430, from September 27th 1996, shall be carried out , in general, specific or sectorial character, or in attendance of request from a representative entity of economic or professional category, of national ambit or by interested entity in relation to goods, services or rights subject of transactions carried out by entities represented

§ 1º The requests for margin alteration shall indicate the fiscal classification of the goods to which the change is being plead, according to Mercosul Common Nomenclature (NCM), making evident technical criteria, consistency, and sample uniformity used on the research and studies carried out, in order to support the request.

§ 2º In case the data presented do not characterize, in a representative and consistent way, the margin effectively practiced on transactions between non related parties, in Brazil or abroad, the requests shall be disregarded.

Art. 2the The Federal Revenue Service Secretary (RFB) is responsible for the analysis of the percentage alteration requests which is mentioned by article 1, and shall present a solution proposal to the Minister of Finance, for each case..

§ 1º Once the request is accepted, if the proposal solution:

I - results in concession, total or partial, shall be formalized by a Ministerial Ruling, published on the Federal Official Gazette;

II - results in denial, it will be imprinted in a formal dispatch on the request process itself.

§ 2º In case of partial or total request acceptance, the RFB should propose the period to which the new percentages will be applied, observing a minimum period of 2 years.

§ 3º The occurrence of relevant facts that may alter the referred margin, between the third and fifth year, shall result in obligation to communicate the RFB.

§ 4º the absence of communication of the relevant fact which as set forth by § 3 shall result in inspection procedure in order perform the computation of parameter prices based on the margins established by law.

§ 5º On hypothesis of § 3º, the application of a new margin:

I - smaller than the authorized, depends on the formulation and approval of a new request;

II -higher than the authorized, shall enter into force from the subsequent tax year.

§ 6º It is forbidden the request of margin alteration for calendar years closing previously to the request date.

§ 7º In order to prove margin unsuitability, data from operations carried out with entities resident or domiciled in countries of favorable taxation shall not be used, as defined in article 24 of Law 9.430 from September 27th 1996, with alterations introduced by articles 22 and 23 of Law 11.727, from June 23rd ,2008.

Chapter I
Import transactions

Art. 3 - The margin alteration requests, for import transactions, shall be accompanied by reports or explanation notes based on studies or research which demonstrate, observing the requirements that assure comparability of the researched transactions with the ones of the interested entity, that the profit margin requested is practiced by other independent entities , on transactions with non-related parties; and it is incompatible with the margin set forth by law.

§ 1º In case of identical goods, services or rights, the only adjustment permitted relates to:

I - payment terms;

II - negotiated volumes;

III - liability for product fitness warranty or for the applicability of the service or right;

IV - liability for promotion of the goods, services or rights to the public by means of advertising and publicity;

V - liability for quality control, service and sanitary standards;

VI - agency costs for purchase and sale transactions carried out by unrelated parties, taken into account for the purpose of price comparisons;

VII - packaging;

VIII - freight and insurance

§ 2 º - The payment term differences shall be adjusted for the amount of interest corresponding to the period between the terms granted for payment of the liabilities under consideration, based on the interest rate applied by the supplier when such interest rate is applied consistently with respect to all installment sales.

§ 3º With respect to paragraph 2 hereinbefore , if a rate is not proven to be applied consistently, the adjustment shall be made by reference to:

I - the Special Liquidation and Custody System - SELIC rate for federal bonds, prorated for the period, when both buyer and seller are resident in Brazil; or

II - Libor rate, prorated for the period, for six-month-US-dollar deposits increased by 3% per year as a spread, if one of the parties is nonresident.

§ 4º- The adjustments in view of differences in the negotiated volumes shall be made based on documents issued by the selling company, demonstrating the use of lower prices for higher volumes purchased by the buyer.

§ 5 º - For purposes of adjustment for the warranties for product fitness under Section III of paragraph 1, the price may not exceed the value arrived at by dividing total expenditures within the previous tax computation period by the quantity of goods, services and rights under warranty for product fitness within the domestic market over the same period.

§ 6 º - Where under paragraph 5 hereinbefore , the goods, services or rights have not yet been sold in the Brazilian market, the cost in local currency shall be accepted corresponding to the same warranty for product fitness provided in another country.

§ 7 º - With respect to adjustments by virtue of the provisions set forth in items IV and V of paragraph 1, the price of the goods, services or rights purchased from a related party resident or domiciled abroad which bears the cost of promotion of the goods, services or rights in Brazil may exceed the price adopted by another company which does not bear the same cost limited to the amount spent per unit of the product by the exporting company bearing said liability

§ 8 º - For purposes of paragraph 7 hereunder, in case of advertising and publicity for promotional purposes related to a business name or trademark, exclusively in the Brazilian market, the costs will be split on a pro rata basis into all goods, services or rights sold in Brazil, in proportion to the volumes and respective values of each type of goods, services and rights;

§ 9 º - When data from a purchasing company , which does not support the intermediation costs of purchase of goods, services or rights, is used as reference for the profit margin computation of the interested entity who supports those costs, in purchase operations carried out with related party, the price of the goods, services or rights of this operation may exceed the former price up to the amount corresponding to suchcost.

§ 10- When data from a purchasing company which supports the intermediation costs of purchase of goods, services or rights , is used as reference for the profit margin calculations of the interested entity who does not support those costs, in purchase transactions carried out with related party, the amount correspondent to these costs shall be excluded from the price of the good, service or right of this operation.

§ 11. For purposes of comparison, the price of goods, services or rights will be also adjusted to account the differences of the cost of materials used in packaging and freight and insurance charged in each case.

Article 4 - In the case of similar goods, services or rights the prices shall be adjusted to account the differences of physical nature and differences in contents , in addition to the adjustments provided for under article 3 hereinbefore, considering the costs related to the production of goods, the performance of services or the constitution of the rights exclusively for the parts corresponding to the differences between the models subject to comparison.

Section I
Production Cost Plus Profit (CPL) Method

Art. 5. With respectr to the Production Cost Plus Profit (CPL), applicable to import transactions, the margin alteration request shall be accompanied by the following documents:

I - statements, worksheets, analytical production costs reports of the goods, services or rights , and the taxpayer may, still, attach an independent audit report that attests the consistency of those statements with the fiscal and accounting books of the related entity;

II - copy of supporting documents of costs of the imported goods, services or rights , expenses accounted as costs in those operations, as well as taxes charged in the country where they were produced;

III - study or research that demonstrates the profit margin practiced by the same supplier, in transactions with non-related parties.

§ 1º Additionally to what is disposed on item III, the interested party may present a study or research that demonstrates profit margin obtained by an independent third party, domiciled abroad, on transactions with non-related parties, following the requirements set forth by items I and II.

§ 2º Alternatively to what is disposed on item II, the interested party may request a CPL profit margin alteration accompanied with the documents that are mentioned on items I and III or on § 1º, certified by the state organ responsible by the federal income tax of the origin country, with support of the diplomatic representation of the country.

§ 3º what is disposed on § 2º does not apply to entities resident or domiciled in a jurisdiction that imposes no taxation on income or a taxation at a rate of less than 20%., as defined on article 24 of Law 9430 from September 27th 1996 with alterations introduced by articles 22 and 23 of Law 11.727, from June 23rd ,2008.

Section II
Resale Price Minus Profit Method (PRL)

Art. 6º Regarding the Resale Price Minus Profit Method (PRL), with a 20% profit margin, applicable to import transactions and resale transactions, the margin alteration request shall be accompanied by the following documents:

I - statements of the annual purchases total from non related suppliers and sales carried out to non related entities, by type of good, service or right, subject of the request;

II - statements of the unconditional discounts granted values, taxes and contributions levied on the sales and commission and brokerage fees paid , relative to the goods, subject of the request;

III - statements of the profit margin gained by the interested party on transactions mentioned on item I; and

IV - copy of supporting documents of purchases, sales and other costs to which refer the statements mentioned on items I to III.

Sole Paragraph. In case the entity does not carries out transactions with non related parties, it may present a study or research that demonstrates the profit margin practiced by an independent third party, domiciled in Brazil, in transacitions with non-related party, following all other requirements mentioned on items I, II and IV, as well as all the requirements that assure comparability of the researched transactions with the ones from interested entity mentioned on art. 3º.

Art. 7º Regarding the Resale Price Minus Profit Method (PRL), with a 60% profit margin, applicable to import transacionts and raw materials or applications on the production of other good, service or right, the margin alteration request shall be accompanied by the following documents:

I - statements of the annual raw material purchases total from non related suppliers and final products sales carried out to non related entities, by type of good, service or right, subject of the request ;

II - statements of production costs of the finished good originated from the imported raw material;

III - statements of the unconditional discounts granted values, taxes and contributions levied on the sales and commission and brokerage fees paid , relative to the goods, subject of the request;

IV - statements of the profit margin gained by the interested party on transactions mentioned on items I and II, excluding the value added in the country, according to the following methodology:

a) net sale price: weighted average of the resale priceof the finished good, practiced with non related parties, less unconditional discounts granted, taxes and contributions levied on the sales; commission and brokerage fees paid;

b) participation percentual of imported goods, services or rights from non-related parties on the total finished product cost: the percentual relation between the value of the imported good , service or right from non related party and the total finished good cost, calculated according to the costs worksheet of the entity ;

c) participation of imported goods, services or rights on the sale price of the finished good: application of the participation percentual of the imported good , service or right on the total cost, calculated as item " b" , over the net sale price calculated according to item " a" ;

d) profit margin of the good, service or right subject to the request, according to the formula below:

ML = (PV - PI)

PI

Where,

ML: profit margin gained on non-related party transactions;

PV: participation of imported good, service or right on the sale price of the finished good, obtained according formula described on item " c" ;

PI: practiced price on the importation of the good, subject to the request, on transactions with non related parties;

V - copy of supporting documents of purchases, sales and other costs to which refer the statements mentioned on items I to IV.

Sole Paragraph. In case the entity does not carry out transactions with non related parties, it may present a study or research that demonstrates the profit margin practiced by an independent third party, domiciled in Brazil, in transactions with non-related party, following all other requirements mentioned on items I, II and III, as well as all the requirements that assure comparability of the researched transactions with the ones from interested entity mentioned on art. 3.

CHAPTER II
Export Transactions

Art. 8º The margin alterations requests for exports, shall be accompanied by reports or explanation notes that present study or research which demonstrate differences between the profit margin practiced by other independent entities , in non related transactions, and the one practiced by the interested party, observing the requirements that assure the comparability of the researched transaction with the taxpayer's transactions.

§ 1º In case of equivalent goods, services aorrights, the only adjustment permitted relates to:

I - payment terms;

II - negotiated volumes;

III - liability for product fitness warranty or for the applicability of the service or right;IV - liability for promotion of the goods, services or rights to the public by means of advertising and publicity, observing what is mentioned on §7º, 8º and 9º of art. 3º;

V - liability for quality control, service and sanitary standards;

VI - agency costs for purchase and sale transactions carried out by unrelated parties, taken into account for the purpose of price comparisons;

VII - packaging;VIII - freight and insuranceIX - credit liabilities.

§ 2º The payment term differences shall be adjusted for the amount of interest corresponding to the period between the terms granted for payment of the liabilities under consideration, based on the interest rate applied by the entity, when such interest rate is applied consistently with respect to all installment sales.

§ 3º With respect to paragraph 2 hereinbefore, if a rate is not proven to be applied consistently, the adjustment shall be made by reference to:

I - the Special Liquidation and Custody System - SELIC rate for federal bonds, prorated for the period, when both buyer and seller are resident in Brazil;

II - Libor, prorated for the period, for six-month-US-dollar deposits increased by 3% per year as a spread, if one of the parties is nonresident.

§ 4º- The adjustments in view of differences in the negotiated volumes shall be made based on documents issued by the selling company, demonstrating the use of lower prices for higher volumes purchased by the buyer.

§ 5º - For purposes of adjustment for the warranties for product fitness under Section III of paragraph 1, the price may not exceed the value arrived at by dividing total expenditures within the previous tax computation period by the quantity of goods, services and rights under warranty for product fitness within the domestic market over the same period.

Paragraph 6 - Where under paragraph 5 hereinbefore the goods, services or rights have not yet been sold in the Brazilian market, the cost in local currency shall be accepted corresponding to the same warranty for product fitness provided in another country.

Paragraph 7 - in case data from an independent exporter entity, which bears the cost of the provisions set forth in items IV and V of paragraph 1, is used when calculating the profit margin of the interested party that normally does not bear those costs, in a similar export operation, the amount correspondent to the mentioned costs shall be excluded from the price of the goods, services or rights of that operation.

§ 8º In case data from an independent exporter entity, which does not bear the cost of the provisions set forth in items IV and V of paragraph 1, is used when calculating the profit margin of the interested party that normally bears those costs, in a similar export operation, the amount correspondent to the mentioned costs may be added to the price of the goods, services or rights of that operation.

§ 9º the norms set forth by § 7º and 8º, relative to intermediation costs, levied on the sale of the good, service or right, should be applied.

§ 10. The price of goods, services or rights will be also adjusted to take account differences in the cost of materials used in packaging and the freight and insurance charged in each case.

§ 11. For purposes of item IX of paragraph 1hereinbefore, the adjustments for credit risk shall be exclusively allowed for transactions carried out between buyer and seller domiciled in Brazil.

§ 12. The adjustments mentioned on § 11 will be carried out based on percentual resulting from the comparison of the total losses and credits relative to the previous calendar year.

Art. 9º In the case of similar goods, services or rights the prices shall be adjusted to account differences of physical nature and differences in contents in addition to the adjustments provided for under article 3 hereinbefore, considering the costs related to the production of goods, the performance of services or the constitution of the rights exclusively for the parts corresponding to the differences between the models subject to comparison.

Section I
Acquisition or Production Cost Plus Taxes and Profit Method CAP

Art. 10. Regarding the Acquisition or Production Cost Plus Taxes and Profit Method - (CAP), applicable to export transactions, the margin alteration requests shall be accompanied by the following documents:

I -statements, worksheets, analytical production costs reports of the goods, services or rights , emitted by the exporter entity, domiciled in Brazil, and the interested party may, still, attach an independent audit report that attests the consistency of those statements with the fiscal and accounting books of the entity;

II - statements, worksheets, analytical acquisition costs reports of the goods, services or rights , emitted by the exporter entity, domiciled in Brazil, and the interested party may, still, attach an independent audit report that attests the consistency of those statements with the fiscal and accounting books of the entity, under the exclusive hypothesis of resale;

III - statements, worksheets, analytical reports of the amounts by which the goods, services or rights were exported by the entity domiciled in Brazil, in transactions to non-related parties;

IV - statements of the profit margin gained by the entity domiciled in Brazil , in transactions mentioned on items I to III;

V - statements of the amounts paid referent to freight, insurance, taxes and contributions charged in Brazil, relative to the exported goods, services or rights ;

VI - a statement of the deemed IPI credit granted, as well as reimbursement of PIS/Pasep and Cofins contributions, corresponding to the goods which are the subject of the application, for entities subject to cumulative calculation regime;

VII - copy of supporting documentation of all purchases, sales and costs to which refer statements mentioned on items I to VI.

Sole Paragraph. In case the entity domiciled in Brazil does not carry out transactions with non related parties, it may present a study or research that demonstrates the profit margin obtained by an independent third party, domiciled in Brazil, in transactions with non-related parties, considering all other requirements mentioned on this article and article 8.

Section II
Wholesale Price in the Country of Destination Less Profit Method PVA

Art. 11. Regarding the Wholesale Price in the Country of Destination Less Profit Method - (PVA) applicable to export transaction, the margin alteration requests shall be accompanied by the following documents:

I -statement of annual total of purchases from non related suppliers, as well as all other costs paid by the Brazilian entity, linked to the exported good, service or right;

II - statement of annual total of export revenue gained by the interested party, with non related wholesalers , domiciled abroad, distributors of the goods, services or rights;

III - statement of the taxes included in the price, charged on the destination country, levied on exports of the goods, services or rights;

IV - statements of the profit margin gained on transactions described on items I and II, excluding the amounts correspondent to taxes referred by item III;

V - Copy of supporting documentation of all purchases, sales and costs to which refer statements mentioned on items I to VI

§ 1º In case the entity domiciled in Brazil does not carry out transactions with non related parties, mentioned on item II, the interested party maypresent a statement of the sales between the related party domiciled abroad and the non related wholesalers, distributors of the goods, services or rights, subject of the request, on the destination country, with the supporting sales documentation.

§ 2º regarding what is mentioned on §1º, the interested party shall be released from the obligation to present a copy of supporting sales documentation, once it presents the statement certified by the state organ responsible for the administration of the federal income tax of the destination country of the sales, with support from the diplomatic representation of the country.

§ 3º what is disposed on § 2º does not apply to entities resident or domiciled in a jurisdiction that imposes no taxation on income or a taxation at a rate of less than 20%., as defined on article 24 of Law 9430 from September 27th 1996 with alterations introduced by articles 22 and 23 of Law 11.727, from June 23rd ,2008.

§ 4º in case of absence of transactions mentioned by item II and § 1º, the interested party may present a study or research that demonstrates the profit margin obtained by an independent third party, domiciled in Brazil, in transactions with non-related wholesalers, with comparable goods, services or rights , considering the adjustments mentioned on article 8.

Section III
Retail Price in the Country of Destination Less Profit Method PVV

Art. 12. Regarding the Retail Price in the Country of Destination Less Profit Method ( PVV) , applicable to export transactions, the margin alteration requests shall be accompanied by the following documents:

I -statement of annual total of purchases from non related suppliers, as well as all other costs paid by the Brazilian entity, on the sale of the good, service or right;

II - statement of annual total of export revenue gained by the interested party, with non related end customers, domiciled abroad

III - statement of the taxes included in the price, charged on the destination country, levied on sales of the goods, services or rights;

IV - statements of the profit margin gained on transactions described on items I and II, excluding the amounts correspondent to taxes referred by item III;

V - Copy of supporting documentation of all purchases, sales and costs to which refer statements mentioned on items I to VI

§ 1º In case the entity domiciled in Brazil does not carry out transactions with non related parties ,mentioned by item II, the interested party may :

I -present a statement of the sales between the related parties domiciled abroad and the non related end consumers, resident on the destination country of the goods, services or rights, with the supporting sales documentation.

II - present a statement of the sales to end consumers carried out by non-related retailers, domiciled on the destination country of the goods, services or rights with the supporting sales documentation

§ 2 º regarding what is mentioned on § 1º, the interested party shall be released from the obligation to present a copy of supporting sales documentation, once it presents statements certified by the state organ responsible for the administration of the federal income tax of the destination country of the sales, with support from the diplomatic representation of the country

§ 3º what is disposed on § 2º does not apply to entities resident or domiciled in a jurisdiction that imposes no taxation on income or a taxation at a rate of less than 20%., as defined on article 24 of Law 9430 from September 27th 1996 with alterations introduced by articles 22 and 23 of Law 11.727, from June 23rd ,2008.

§ 4º in case of absence of the transactions mentioned by item II and § 1º, the interested party may present a study or research that demonstrates the profit margin obtained by an independent third party, domiciled in Brazil, in transactions with non-related end consumers, residents on the destination country of the goods, services or rights, when dealing with comparable goods, services or rights, considering the adjustments mentioned on article 8.

Art. 13. Regarding the 90% percentual alteration request, mentioned on article 19 of Law 9.430, from 1996, the interested party shall present the following documents:

I - statement of total export amounts of goods, services or rights, subject to the request, on transactions practiced by it or by third parties, with non related parties ;

II - statement of the amounts practiced on the sales of the same goods, services or rights on the Brazilian market, on transactions with non related parties, over the same period of time, with similar payment terms;

III - copy of supporting documentation of all sales mentioned on items I and II.

§ 1ºIn case the entity domiciled in Brazil does not practice export transactions with non related parties, the determination of the average prices, referred by item I, will be carried out with data from other entities who export similar or identical goods, services or rights, to non related entities.

§ 2º 1ºIn case the entity does not sell to the Brazilian market, the determination of the average prices, referred by item II, will be carried out with data from other entities who sell similar or identical goods, services or rights, to non related entities on the Brazilian market.

§ 3º for comparison purposes, the sale price:

I - in the Brazilian market shall be computed net of unconditional discounts granted, of the ICMS tax, of the ISS tax, of the Cofins and PIS/Pasep contributions, of other charges assessed by the government, of the freight and of the insurance costs borne by the selling company;

II - in export transactions shall equal the value obtained after deducting freight and insurance costs, where such costs have been borne by the exporting company.

Art. 14. RFB may:

I - request other documents judged necessary to support the presented information by the interested entity;

II - release from the obligation the attachment, to the percentual alteration request, part or all documents mentioned by articles. 5º, 6º, 7º, 10, 11 and 12, but shall be kept on file for presentation at the fiscal domicile of the applicant company.

Art. 15. With respect to what is mentioned on articles. 5º, 6º, 7º, 9º, 10 and 11, the methodologies used to calculate parameter prices should be respected, as established through regulatory instruction by the tax authorities.

Art. 16. For documental purposes of the request referred by this administrative ruling, comparison of practiced prices from transactions carried out on previous calendar years shall not be accepted.

§ 1º it will be allowed adjustments to take account exchange variations of the reference currencies occurred over the same period of the request.

§ 2º - In the case of adjustments to take account exchange variations, the prices used as parameters for comparison, when derived from transactions carried out in countries for which currency has no exchange rate in local currency, shall be first converted into US dollars and subsequently into Brazilian reais, using as a basis the respective exchange rates for the date of each transaction

§ 3º In the event that this article applies, fluctuations in commodity prices shall be taken into account when evidenced by national or international stock market quotations verified during the period..

Art. 17. In addition to the documents regularly issued by companies in their purchase and sale transactions, evidence of prices to which this Regulatory Instruction refers may also be produced by means of:

I -official publications or reports from the government of the country of origin of seller or buyer, or a declaration of such country's tax authorities if the country concerned has signed a double taxation or information exchange treaty with Brazil.

II - market research conducted by a recognized, technically qualified firm or institution or technical publication, which specifies the industry sector, the period, the companies researched and the profit margins, and which identifies, for each company, the data collected and analyzed, or

III - studies, researches, and public references, including databases, conducted, by apt and well known entities, understood as those accepted by international fiscal authorities.

§ 1º The publications, research or technical reports under this article shall be accepted as evidence only if carried out in compliance with internationally accepted appraisal criteria and provided they are concurrent to the Brazilian entity's IRPJ tax computation period.

§ 2º Price publications acceptable as evidence also comprise:

I - national stock market quotations;

II - quotations from internationally recognized stock markets

III - research conducted under the auspices of multilateral entities, such as the Organization of Economic Cooperation and Development (OECD) and the World Trade Organization (WTO).

§ 3º The technical publications, research and reports referred to in this article may be rejected by the Federal Revenue Service if considered inconsistent or unreliable.

Art. 18. Data supporting the statements, worksheets, reports, studies or researches may be from the period subject to the request or up to 2 previous years.

Sole Paragraph. RFB may request the presentation of data referring to other periods.

Chapter III
Legitimacy, requirements and effects of the request.

Art. 19. Applications for changes in percentages may be carried out by:

I - entity subject to tax obligations, or

II - entity representing an industrial or economic sector.

Sole Paragraph. In case the entity has more than one fiscal domicile, the request shall be prepared by the headquarter, which shall inform the fact to other domiciles.

Art. 20. the margin or percentual alterations requests shall be prepared in writing , destined to the Minister of Finance and handed in the RFB unit at the fiscal domicile of the interested entity

§ 1º The request shall meet the following requirements:

I - identification of the interested entity:

a) Name, address, telephone, e-mail, CNPJ number and activity sector;

b) Identification of the legal representative or attorney, accompanied by the power of attorney;

II - be accompanied of declaration that the subject:

a) is not under inspection procedures to investigate facts related to the period subject of the request;

b) Is not summoned to execute obligations related to the fact subject of the request;

c) The fact exposed in it was not subject of previous decision;

III - limit itself to boundaries obtained in determined exercises, with detailed description of its subject and indication of necessary information to clarify the matter.

§ 2º in case the entity has more than one fiscal domicile, the declarations referred by item II of § 1º should be rendered by the headquarter and comprise all other domiciles.

§ 3º declaration mentioned on item II of § 1º does not apply to request prepared in name of associates by representative entity of economic or professional sector, except if prepared by it as passive subject.

Art. 21. The request shall not produce effects:

I - without observance of the requirements mentioned on articles 19 and 20;

II - without specification of the pleaded margin or percentual, as well as the used method, according to all determinations described on this ruling;

III - by those under inspection procedures, initiated before its presentation, to investigate facts related to the request;

IV - by those summoned to execute obligations related to the fact subject of the request;

V - about facts object of litigation, that the interested party is a part of, pending definite decision on administrative or judicial spheres; or

VI - when it does not describe, complete and exactly, the margin or percentual, or does not contain the necessary elements to its solution, except if the inaccuracy or neglect are acceptable according to the judging authority.

Sole paragraph. On the hypothesis of the caput, the requests shall be filed, after notification of the interested party.

Chapter IV
Final dispositions

Art. 22. The margin or percentual alteration request dealt by this Ruling does not characterize a Consultation Process of articles 48 to 50 of Law 9430 from 1996.

Art. 23. In the case of a refusal, a second instance judgment is not allowed.

Art. 24. RFB may publish administrative acts that are deemed necessary for the application of this Ruling.

Art. 25. This Ruling is effective as from its publication date.

Art. 26. Ruling 95 of April 30, 1997 is hereby formally revoked, without discontinuance of its normative effectiveness

GUIDO MATEGA