AFFECTED FLOWOutflow (subsidised)
ANNOUNCED AS TEMPORARYNo
Tax-based export incentive
On June 16th 2010 the Ministry of Finance established trough the 'Portaria nş 348' special procedures for the refund of taxes on exports related to PIS/Pasep, Cofins and IPI credits. On August 3rdthe Federal Revenue of Brazil published 'Instruçăo Normativa nş 1060' containing additional rules for the implementation of the special refund procedure.
The refund procedures apply only to credits accounted for from April 1st 2010, subject to some conditions, for instance: exports must represent at least 30% of the companies' revenues during the last 2 years; companies must have exported in the last 4 years; and, companies must be subject to the availability of funds from the part of the Central Government.
The regulation implemented by the Federal Revenue of Brazil established additional rules to restrain the access to the tax refunds, as for instance the limits which apply to the IPI refund - credits originating from the acquisition of raw materials, intermediate goods and packing materials destined to the production of certain specified goods are not entitled to the refund.
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