Legislation - Regulatory Instructions

Treats the disposition, for the calendar-year of 2005, of adjustments to prove the adequacy of transfer prices in export transactions in order to reduce the impacts related to Brazilian currency exchange rate valuation compared with other currencies.

THE SECRETARY OF THE BRAZILIAN INTERNAL REVENUE DEPARTMENT, within his responsibilities, granted by sub-item III of Article 230 of the Internal Regulations of the Federal Internal Revenue Department, approved by Administrative Ruling MF no. 30 (August February 25, 2005), and in view of the provisions Law no. 9.430 (December 27, 1996), Articles 18 to 24 and 28, and Law no. 9.959 (January 27, 2000), Article 2, and Law no. 10.451 (May 10, 2002), Articles 3 and 4, and Law no 10.637 (December 30, 2002),article 45, and Law no 10.833 (December 29, 2003), article 45, and Law no. 11.196 (November 21, 2005), article 36, hereby sets forth:

Article 1 - The export revenues received in Brazilian currency during the 2005 calendar-year, arising from exports performed with related parties could be multiplied by 1.35 (one and thirty five), according to disposition of Administrative Ruling MF nº 436 (December 25th, 2005), in order to determine the triennial weighted arithmetic average, treated by Normative Ruling SRF no. 243 (November 11, 2002), article 35, modified by Normative Ruling SRF no. 382 (December 30, 2003).

Article 2 - Alternatively to the triennial average mentioned in article 1, the legal entity could determine the annual net profit of at least five percent referred in Normative Ruling no. 243, article 35 (2002), multiplying the export sales revenues, performed with related entities, by the same factor referred in article 1, only considering the 2005 calendar-year.

Article 3 - This Normative Ruling goes into effect on the date of its publication, giving effects exclusively for the calendar-year 2005.

JORGE ANTONIO DEHER RACHID