Brazil: Transfer Pricing – RFB explains PRL Usage

The RFB (Receita Federal do Brasil) has introduced the Consultation Solution Nr. 95-Cosit which confirms that companies that import goods from affiliates abroad need to comply with the transfer pricing rules. It does not matter whether the imported goods undergo a manufacturing process in Brazil or not.


Context and Consequences

These regulations were implemented to avoid companies using above- market prices to reduce the calculation base for IR and CSLL tax.

According to the Consultation Solution, an importer can chose among different transfer pricing calculation methods as long as he does not import commodities.

One of these methods is called PRL (Preço de Revenda menos Lucro = resale price minus profit). Using PRL, the minimum price of the imported good is fixed and will then be deducted from the calculation base for IR and CSLL while a certain percentage of the profit will be counted against the resale price.

With the Consultation Solution the content of Article 18, §12 of Law No. 9,430 / 1996 has been clarified. It states that the calculation of the reference price and the expected margin of profit is based on the respective economic branch (CNAE) that the Brazilian judicial person (which is subject to transfer pricing) belongs to. This refers to the importer. Here, it does not matter which branch the foreign judicial person (the exporter) belongs to.


If the importer belongs to several economic branches, his profit range will be defined according to the branch he chose for his imported goods.