Deputies approve measure to extend tax incentive scheme for exporters during pandemic

Last Wednesday, August 26, the Chamber of Deputies approved Provisional Measure 960/20, which allows for a one-year extension of the drawback concessions that expire in 2020. The postponement will be made as an exception and will be counted from the date of the end of the benefit. The text is to be analyzed by the Senate.

Created by Law 11.945 / 09, the drawback is an incentive granted to exporting companies. The measure temporarily suspends the payment of federal taxes on inputs used in the production of goods intended exclusively for export.  The advocate for the measure, deputy Alexis Fonteyne (Novo-SP), recommended the text sent to the Senate with some modifications. “Due to the pandemic, exporting companies may find themselves unable to meet the requirements of the special regime, due to the fall in international trade,” he explained.

Rules
Fonteyne accepted the amendment suggested by deputy Alessandro Molon (PSB-RJ), which sets a deadline of 30 days for the company benefited by the drawback to be liable for import taxes when there is a breach of the requirements of the special regime.

To receive the incentive, the company needs to qualify with the Foreign Trade Secretariat of the Ministry of Economy, responsible for granting the drawback. Among the suspended taxes are the import tax, the tax on industrialized products (IPI), and the contribution to the financing of social security (Cofins).

Pandemic
The objective of the measure, according to the government, is to mitigate the economic effects of the Covid-19 pandemic on exporting companies with drawback concessions signed in 2018 and due this year. Among the products sold abroad that benefit from the special regime are iron ore, chicken, and cellulose.

In 2019, exports via drawback totaled US$49.1 billion, corresponding to 21.8% of the total exported by Brazil, according to a report by the Ministry of Economy released in March.

Source: Agência Câmara de Notícias

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