Legislation - Regulatory Instructions

Treats the disposition, for the calendar-year of 2006, 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 SUBSTITUTE 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 2006 calendar-year, arising from exports performed with related parties could be multiplied by 1.29 (one and twenty nine), according to disposition of Administrative Ruling MF nº 425 (December 28th, 2006), 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).

Paragraph. In order to determinate the triennial weighted arithmetic average of the net profit mentioned in the main section, the export revenues received in Brazilian currency during 2005 calendar-year, arising from export performed with related parties could be multiplied by 1.35 (one and thirty five), according to the Administrative ruling MF nº 436 (December 29th, 2005).

Article 2 - Alternatively to the triennial average mentioned in article 1, main section, 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, main section, only considering the 2006 calendar-year.

Article 3 - This Normative Ruling goes into effect on the date of its publication, giving effects exclusively for the calendar-year 2006.

RICARDO JOSÉ DE SOUZA PINHEIRO