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  • Service: Tax, Global Transfer Pricing Services
  • Type: Regulatory update
  • Date: 11/6/2013

Brazil - Goods treated as commodities for transfer pricing purposes 

November 6:  Guidance published by the tax authority of the State of São Paulo concerns procedures for determining the pricing of certain exports and imports of goods that are treated as commodities.

RFB Normative Instruction nº 1,395 (13 September 2013) relates to the pricing methodologies of export price quotations (Preço de Cotação na Exportação—PECEx) and import price quotations (Preço de Cotação na Importação—PCI).


The following discussion expands on information previously report in TaxNewsFlash-Transfer Pricing: Brazil - Adjustments to commodity prices in related-party transactions

Commodity concept

Normative Instruction nº 1,395 restricts the concept of “commodity” to those goods listed in Annex I, which are cumulatively subject to “public prices” in the stock market and futures index listed in Annex II, or the prices subject to public sector research institutions, as internationally recognized and listed in the Annex III.


If the goods are not listed in Annex I, but are negotiated on a stock market or futures index listed on Annex II, the goods are to be treated as a commodity for transfer pricing purposes.

Price adjustments

The guidance offers new possibilities for price adjustments. Under the new rules, in addition to the “premium,” other variables—such as the following items—may be considered, including: (1) payment term; (2) amount negotiated; (3) climatic influences on the characteristics of the imported good; (4) intermediation costs in the purchase and the sale practiced by unrelated party; (5) packaging; and (6) shipping and insurance.


Normative Instruction nº 1,395 indicates the Baltic Dry Index (BDI) may be a possibility for purposes of adjustments related to freight.

Transaction date - import cost

The new rules clarify that the “transaction date” must be the date that the price was negotiated:


  • When established under a contract typically used by the company, including an unrelated party
  • Pursuant to standard procedures in the industry

When the transfer price is calculated based on quotations or indices related to a certain average number of days under the contract, the calculation of the comparable price must take into consideration the same period of the average number of days.

Regional reference price

In situations involving commodities with regional reference prices, the “legal” exporter entity must choose, as a comparable, a price as quoted on a stock market and/or futures index of the destination, or with respect to internationally recognized research institutions.


If the availability of a price under either option is not possible, the exporter must select a quotation of the closest market, or the price of the good sold to an unrelated corporate entity that also is not a resident of a tax haven jurisdiction.

Changes made in Annex I and Annex III

Some commodity definitions were amended as well, as the related NCM codes, listed on the Annex I. Moreover, the Annex III contains a new list of research institutes.


Read a September 2013 report (Portuguese) prepared by the KPMG member firm in Brazil: Tax News: Preços de Transferência - Instrução Normativa RFB nº 1.395 de 13/09/2013



Contact a tax professional with KPMG's Global Transfer Pricing Services.




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