Janssen-Cilag Farmaceutica LTDA challenged the legality of Brazil's RPL60 resale price transfer pricing method before the Supremo Tribunal Federal. The Supreme Court dismissed the appeal in November 2023, finding it had lost its purpose after the Superior Court of Justice had already upheld the taxpayer's claim in simultaneous proceedings, rendering the extraordinary appeal moot under Brazilian procedural rules ... Read more

A Brazilian taxpayer challenged the Federal Revenue Service's application of the RPL60 sixth method under Normative Instruction SRF 243/2002, arguing it conflicted with Law 9430/1996. The Second Chamber of Brazil's Superior Tribunal de Justiça ruled in 2023 that the normative instruction did not violate the statutory arm's length provision, upholding the tax authority's interpretation of the resale price method ... Read more

Janssen-Cilag Farmaceutica LTDA challenged the legal basis of the PRL60 transfer pricing method applied by Brazilian tax authorities under IN 243/02. The company argued the method lacked statutory grounding. Brazil's Superior Tribunal de Justiça dismissed the clarification request in May 2023, finding no omission or contradiction in the lower judgment and confirming that the court had already resolved the substantive transfer pricing method dispute ... Read more

(i) FP, is a foreign company that designs, manufactures and sells industrial equipment. FP has developed proprietary components that are incorporated in its products. These components are important in the operation of FP’s equipment and some of them have distinctive features, but other companies produce similar components and none of these components by itself accounts for a substantial part of the value of FP’s products. (ii) FP licenses its U.S. subsidiary, USSub, exclusive North American rights to use the patented technology for producing component X, a heat exchanger used for cooling operating mechanisms in industrial equipment. Component X incorporates proven technology that makes it somewhat more efficient than the heat exchangers commonly used in industrial equipment. FP also agrees to provide technical support to help adapt component X to USSub’s products and to assist with initial production. Under the terms of the license agreement USSub pays FP a royalty equal to 3 percent of sales of USSub equipment incorporating component ... Read more

(i) USpharm, a U.S. pharmaceutical company, develops a new drug Z that is a safe and effective treatment for the disease zeezee. USpharm has obtained patents covering drug Z in the United States and in various foreign countries. USpharm has also obtained the regulatory authorizations necessary to market drug Z in the United States and in foreign countries. (ii) USpharm licenses its subsidiary in country X, Xpharm, to produce and sell drug Z in country X. At the same time, it licenses an unrelated company, Ydrug, to produce and sell drug Z in country Y, a neighboring country. Prior to licensing the drug, USpharm had obtained patent protection and regulatory approvals in both countries and both countries provide similar protection for intellectual property rights. Country X and country Y are similar countries in terms of population, per capita income and the incidence of disease zeezee. Consequently, drug Z is expected to sell in similar quantities and at similar prices in ... Read more

DSM Produtos Nutricionais Brasil applied the RPL-60/PRL-60 resale price method to price imported intragroup goods, but Brazilian tax authorities determined the calculations did not comply with legislative requirements. The Federal Regional Court dismissed DSM's appeal in 2021, upholding the transfer pricing adjustment for FY 2007 and confirming that the PRL-60 method had not been correctly applied under Law 9430/1996 as amended ... Read more

Syngenta Protecao de Cultivos faced a tax assessment in Brazil over incorrect application of the PRL 60 resale price method and omitted revenues from inventory differences. Syngenta challenged the legality of IN SRF 243/2002 and disputed the inclusion of freight, insurance and taxes in the assessed price. Brazil's CARF, sitting at special appeal level, dismissed Syngenta's appeal and upheld the tax authority's assessment in full ... Read more

LG Electronics Do Brasil used the resale price minus method (PRL 60) to price imported goods from a related company. Brazilian tax authorities rejected the methodology and issued an assessment, which was overturned on appeal in 2013. In 2016, Brazil's Superior Chamber of Tax Appeals upheld that decision, confirming the mathematical model in IN SRF 243/2002 as legally valid and consistent with transfer pricing principles ... Read more

LG Electronics Do Brasil applied the resale price minus method to price imported goods from a related party. Brazilian tax authorities rejected this approach and issued assessments for FY2006 and FY2007. The Administrative Court of Appeals ruled mostly in favour of LG Electronics, setting aside the assessment and affirming that transfer pricing rules exist to prevent base erosion, not to grant tax benefits or stimulate domestic production ... Read more