Normative Ruling no. 1870/19 of Federal Revenue Service changes rules of Transfer Price
The Normative Ruling 1870/19 that was published on January 29, 2019 brought important enlightenments about the systematic application of transfer price in Brasil.
Most of the changes look after clarifying important aspects of the norm, giving the taxpayer more details about the application of determined methods, besides bringing relevant alteration to some methods of price parameter calculation.
Between the alterations is the form of determine the parameter price in Método do Preço sob Cotação na Importação (PIC) and Método do Preço sob Cotação na Exportação (PECEX), changing the concept of commodity for purposes of determining the transfer price.
A relevant change brought by the Normative Ruling was the determination of the margin of variance on 5% as satisfactory for all the methods, what can be seen as a benefit for the taxpayer, therefore changing the form of application of the respective percentage:
Margin of variance in importation:
Margin of variance until 12.31.18
Practiced Price – Parameter Price
Practiced Price
Margin of variance after 01.01.2019
Practiced Price – Parameter Price
Parameter Price
Other relevant modifications can be broached in specific studies in accordance to client’s necessities. What must be kept in mind is that the matter of transfer price must always be verified by the companies that have goods and services relation with associated companies. Our tax department is at disposal for greater details about the theme.
Milena Romero Rossin Garrido – partner responsible for the tax branch of Guarnera Advogados.
