Legislation - Regulatory Instructions

Regulatory Instruction n° 321, issued by the SRF of April 14, 2003

Published in the Federal Official Gazette (DOU) of April 15, 2003

Changes the Regulatory Instruction n° 243, 2002,

which provides for transfer pricing.

THE FEDERAL REVENUE SERVICE SECRETARY, in the capacity conferred upon him by article 209, item III of the Internal Statute of the Federal Revenue (SRF), approved by Administrative Ruling (Portaria) no. 259 of August 24, 2001 issued by the Ministry of Finance (MF), and in view of the provisions set forth by articles 18 to 24 and 28 of Law no 9430, of December 27, 1996, by article 2 of Law no. 9959, of January 27, 2000, by articles 3 and 4 of Law no. 10451, of May 10, 2002, by article 46 of Provisional Measure (MP) no. 66, of August 29, 2002, and by Administrative Ruling no. 95 issued by the MF on April 30, 1997, hereby establishes that:

Article 1- The articles 7 and 35 of the SRF Regulatory Instruction n° 243, of November 11, 2002, take effect with the following alterations:

"Article 7- The amount expressed in foreign currency upon import of goods, services and rights will be converted into Brazilian reais (R$) at the selling exchange rate of the immediately previous second working day

I- from registration of import declaration

II- of the recognition of the cost or expense corresponding to the rendering of the service or the acquisition of the right, with due regard to the accrual method of accounting".

"Article 35

Paragraph 3- Shall not be computed to determine the percentual established in caput the sales of goods, services and rights whose profit margins, prescribed in articles 24, 25 and 26, had been altered in terms of the articles 32, 33 and 34".

Article 2- For the calendar year of 2002, the new form of Brazilian reais conversion, established in article 7 of SRF Regulatory Instruction n° 243, 2002 could be applied as an option of the taxpayer.

Article 3- This Regulatory Instruction is effective as from its publication date.

JORGE ANTONIO DEHER RACHID