The Brazilian Senate approved a provisional measure to extend the export tax incentive period

The Brazilian Senate approved, on May 12th, the Provisional Measure 1,079/2021, which extends for another year the special customs drawback regime, a tax incentive for exports given to companies that buy raw materials and goods used in the supply chain. The decision will now go to presidential sanction.

The government had already extended the duration term of the tax regime once. This time, their justification is that the economic effects of the covid-19 pandemic on the production chain persist, exporting companies that are unable to sell their products due to the drop in demand.

The text extends the concession acts that would otherwise end 2021 and 2022. It also determines that from January 1, 2023, cargoes with goods imported under the drawback regime will be exempt from paying the Additional Freight for the Renovation of the Merchant Marine (AFRMM).

Benefit

The drawback is a system whereby the exporting company has an exemption, suspension, or reduction to zero of tax rates levied on goods, inputs, and products used to manufacture another product to be exported.

To take advantage of the benefit, which covers taxes such as Import Tax, Tax on Industrialized Products (IPI), PIS (Profit Participation Program Contribution), and Cofins (Social Security Financing applied to the monthly invoicing), the company must apply to the Foreign Trade Department of the Ministry of Economy. The department is in charge of granting the drawback and defining a deadline for the export to be carried out, under penalty of payment of the taxes due.

Source: Money Times

To read the full original article, please go to:

https://agenciabrasil.ebc.com.br/economia/noticia/2022-05/senado-aprova-mp-que-prorroga-incentivo-fiscal-exportacao

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