ANNOUNCEMENT 02 Aug 2011

In August 2011, the government of Brazil announced a change in the tax legislation for exporters.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE



Provisional Measure no. 540 of 2 August 2011, published in the Official Gazette of 3 August 2011: http://pesquisa.in.gov.br/imprensa/jsp/visualiza/index.jsp?jornal=1&pagina=1&data=03/08/2011

Law No. 12.546 of 14 December 2011, published in the Official Gazette of 15 December 2011: http://pesquisa.in.gov.br/imprensa/jsp/visualiza/index.jsp?data=15/12/2011&jornal=1&pagina=3&totalArquivos=240

Decree no. 7.633 of 1 December 2011, published in the extra edition of the Official Gazette of 1 December 2011: http://pesquisa.in.gov.br/imprensa/jsp/visualiza/index.jsp?data=01/12/2011&jornal=1000&pagina=2&totalArquivos=4

Provisional Measure no. 601 of 28 December 2012, published in the Official Gazette fo 29 December 2012:
http://pesquisa.in.gov.br/imprensa/jsp/visualiza/index.jsp?jornal=1000&pagina=2&data=28/12/2012

Provisional Measure no. 610 of 2 April 2013, published in the Official Gazette of 4 April 2013: http://pesquisa.in.gov.br/imprensa/jsp/visualiza/index.jsp?jornal=1000&pagina=1&data=04/04/2013

Federal Law no. 12.844 of 19 July 2013, published in the extra edition of the Official Gazette of 19 July 2013: http://pesquisa.in.gov.br/imprensa/jsp/visualiza/index.jsp?jornal=1000&pagina=1&data=19/07/2013

U.S. Department of State, Bureau of Economic and Business Affairs, February 2013, '2013 Investment Climate Statement - Brazil': http://www.state.gov/e/eb/rls/othr/ics/2013/204608.htm

Ernst & Young's Trade Watch, September 2012, vol. 11, issue 3, p. 5: http://www.eytax.jp/services/indirect-tax/issues/pdf/2012TradeWatchVol11Issue3.pdf

Ernst & Young's Trade Watch, September 2013, vol. 12, issue 3, p. 7: http://www.ey.com/Publication/vwLUAssets/TradeWatch-September-2013/$FILE/TradeWatch-September-2013.pdf


Inception date: 03 Aug 2011 | Removal date: 31 Dec 2013
Still in force

Tax-based export incentive

On 2 August 2011, Brazil's President Dilma Rousseff issued Provisional Measure (PM) no. 540 which was approved by the National Congress and converted into Law no.12.546 on 14 December 2011.
 
The measure introduced the Special Regime for the Reinstatement of Taxes for Exporters (Regime Especial de Reintegraçăo de Valores Tributários para as Empresas Exportadoras), also known as REINTEGRA. The program gives exporters of domestically manufactured goods a tax refund between 0% to 3% of the value of their exports, which then can be used either as a credit against their taxes or as a cash payment.
 
The goods eligible to profit from the REINTEGRA regime are listed in the annex of Decree no. 7.633/2011 and require a certain amount of local content, i.e. imported inputs should not exceed 40% (for some other products it is 65%) of the final product value. Inputs from the MERCOSUR are treated as of Brazilian origin.
 
On 28 December 2012, the program was extended by PM no. 601 until 31 December 2013. Since the Senate failed to approve the presidential act in due time, the extension of the program was introduced again, just before PM no. 601 was about to expire. The new PM, no. 610, was then consecutively approved by the National Congress and turned into Federal Law no. 12.844 on 19 July 2013.
 
Please note that Brazil only exported on a subset of the eligible tariff lines in the year prior to implementation.

AFFECTED PRODUCTS

 
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