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Legal Update

Law No. 12,715/12: Conversion of Provisional Measure No. 563/2012 into Law and Changes in the Rules of Transfer Pricing

5 October 2012
Tauil & Chequer Legal Update

The Federal Government has approved the conversion of Provisional Measure No. 563/2012 into Law No. 12,715. The Law was published in the Federal Official Gazette, and amends the Brazilian transfer pricing regulations.

In Brazil, the transfer pricing control is applicable to entities engaged in import and export transactions of goods, services and rights with related parties’ resident overseas, as well as international transactions carried out with individuals or legal entities, whether related or not, located in the so-called tax havens, privileged tax regimes and countries that do not disclose information on the shareholding of resident companies.

Law No. 12,715 introduced a few novelties to the transfer pricing current regulations, as follows:

  • The PIC (Independent Comparable Price) import method shall take into consideration transactions representing at least 5 percent of the imports carried out by the taxpayer, subject to transfer pricing in the tax year; and corresponding to independent prices practiced in the same tax year of the imports subjected to the transfer pricing control.
  • The profit margins applicable to the PRL (Resale Price less Profit) method will be segregated by economic sector of the legal entity that is subject to transfer pricing control. Profit margins will range from 20% to 40%.
  • Introduction of a new method to be applied in imports (PCI) and exports (PECEX) transactions with commodities, which will be based on the daily average quotation of assets or rights subject to public prices on exchange market internationally recognized.
  • Restriction on the deduction of interest from loan agreements executed with related parties. Any such loan agreements, even if they are registered with the Brazilian Central Bank, will be subject to transfer pricing control. As a result, deduction of interest will be limited to the 6 month US Dollar LIBOR plus 3 percent spread.

The changes introduced by Law No. 12,715/2012 will come into force on January 1, 2013, nevertheless, such rules are subject to regulation by the Brazilian Internal Revenue Service.

For more information, please contact , , and .

Observations in this update about Brazilian law are by Tauil & Chequer Advogados. They are not intended to provide legal advice to any entity; any entity considering the possibility of a transaction must seek advice tailored to its particular circumstances.


  • Ivan Tauil
    T + 55 21 2127 4213
  • Roberta P. Caneca
    T +55 11 2504 4214
  • Carolina Cantarelle Ferraro
    T +55 21 2127 4290

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