ANNOUNCEMENT 06 Jul 2018

The Brazilian government approved a new plan for the promotion of the automobile sector, which includes the exemption of import tax on parts and components without equivalent in the national production capacity and other tax and social insurance relief measures.

NUMBER OF INTERVENTIONS

2

  • 1 harmful
  • 0 neutral
  • 1 liberalising

SOURCE

National Parliament of Brazil. Congresso Nacional. Medida Provisoria 843/2018. Available at: https://legis.senado.leg.br/sdleg-getter/documento?dm=7754101&ts=1531938224201&disposition=inline&ts=1531938224201

Inception date: 01 Jan 2019 | Removal date: 31 Dec 2023
Still in force

Import tariff

On 6 July 2018, the Brazilian Executive adopted Provisional Measure 843 establishing the Rota 2030 program for the automotive sector. The new program includes provisions concerning the elimination of the import duties of auto parts not produced in the country. To benefit from this exemption, companies will have to invest 2% of the customs value in research, development and innovation projects.

The provisions enclosed in this legislation are to be enforced on 1 January 2019, and the removal date has been set at 31 December 2023. 

AFFECTED SECTORS

 
Inception date: 01 Jan 2019 | Removal date: 31 Dec 2023
Still in force

Tax or social insurance relief

Provisional Measure 843 adopted by the Brazilian Executive on 6 July 2018 and establishing the Rota 2030 program for the automotive sector also includes certain tax benefits for the participating companies. Particularly, the program allows firms to deduct from the Corporate Income Tax and from the Social Contribution on Net Profits (i.e. IRPJ and CSLL by their respective acronyms in Portuguese) up to 30% of the expenditures made in the country and classified as operating expenses related to R&D activities.

The provisions enclosed in this legislation are to be enforced on 1 January 2019, and the removal date has been set at 31 December 2023.