Brazilian Federal Revenue Secretariat clarifies application of PCI and PECEX methods
Consultation Solution no. 176, published by the Brazilian Federal Revenue Secretariat on July 8, 2015, made clear the tax administration’s position to require application of the PCI and Pecex methods on import and export transactions involving commodities, by determining the reliable sources of information to obtain the parameter prices for the transfer pricing calculation.”
According to the consultation, in order to apply the PCI and Pecex methods, the products considered to be commodities are those traded in the mercantile and futures exchanges listed in attachment II and the products listed in attachment I that are subject to public prices, according to the sectoral research institutions listed in attachment III of RFB Normative Instruction 1,312 of December 28, 2012.
In case of inexistence of specific trading price of the imported and exported products, the declared prices can be compared to those obtained from an independent data source supplied by internationally recognised sectorial research institutions listed in attachment III of RFB NI 1,312/2012, adjusted upward or downward by an average market price premium.
For exported products, the declared prices can be compared to the prices defined by regulatory agencies or entities, published in the Official Federal Gazette.
The PCI/PECEX methods are mandatory even if the specific trading price is not available, as long as the public price can be reached by adjustment between similar products to calculate the parameter price.
The average market premium also can be applied to similar products, referred to in publications from internationally recognised research institutions.
