Brazil to resume import tax for electric cars gradually in Jan 2024

Starting in January 2024, electric, hybrid, and plug-in hybrid cars purchased abroad will gradually face import taxes again in Brazil. This decision, made on November 10 by the Executive Committee of the Foreign Trade Chamber (Gecex-Camex), aims to develop the national automotive chain, accelerate the decarbonization of the Brazilian fleet, and contribute to the country’s neo-industrialization project, grounded in innovation, sustainability, and strengthening the domestic market with job creation and income generation.

“Brazil has one of the world’s main auto markets. We must encourage the domestic industry towards all technological paths that promote decarbonization, stimulating investments in production, maintenance, and creating higher-skilled jobs with better wages,” highlights Vice President and Minister of Development, Industry, Trade, and Services Geraldo Alckmin.

According to the minister, the global automotive industry’s transition to electrification is unavoidable. “It is time for Brazil to advance, enhancing the fleet’s energy efficiency, increasing our international competitiveness, and positively impacting the environment and public health.”

The resolution establishes a gradual resumption of tax rates and creates initial quotas for duty-free imports until 2026.

In December, a decree will be published regulating the distribution of quotas among importers, preserving the possibility of accommodating new importers.

Gradual Resumption

The percentages of progressive tax resumption will vary based on the levels of electrification, production processes for each model, and domestic production.

For hybrid cars, the tax rate starts at 12% in January 2024, increases to 25% in July 2024, reaches 30% in July 2025, and peaks at 35% in July 2026.

For plug-in hybrids, the rates are 12% in January 2024, 20% in July 2024, 28% in July 2025, and 35% in July 2026. For electric vehicles, the sequence is 10% (January 2024), 18% (July 2024), 25% (July 2025), and 35% (July 2026).

There is also a fourth category, “electric trucks for cargo transport,” starting with a 20% tax in January and reaching 35% in July 2024. In this case, the total tax rate is reinstated more quickly due to sufficient domestic production.

“The existence of a re-entry schedule,” emphasizes the Technical Note from SDIC, “allows the continuity of companies’ development plans and respects the manufacturing maturity in the country for each of the technologies involved.”

Quotas

Simultaneously, companies have until June 30, 2026, to continue importing duty-free up to specific value quotas, also established by the car model.

For hybrids, the quotas are $130 million until June 2024, $97 million until July 2025, and $43 million until June 30, 2026.

For plug-in hybrids, $226 million until July 2024, $169 million until July 2025, and $75 million until June 30, 2026.

For electric vehicles, on the exact dates, respectively, $283 million, $226 million, and $141 million.

For electric trucks, $20 million, $13 million, and $6 million.

Minister Geraldo Alckmin sees the decision as a real incentive for new industries to produce electrified vehicles, generating jobs and income. “Sustainability is ensured by privileging low-carbon technologies,” he concluded.

Source: Informativo dos Portos

To read the original publication, please visit: : https://www.informativodosportos.com.br/imposto-de-importacao-para-veiculos-eletrificados-sera-retomado-em-janeiro-de-2024/

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