All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

Brazil: Brazil announces new incentives to boost competitiveness of national goods

In early August, the Brazilian government announced several measures with the aim of benefitting local manufacturers and exporters of goods and services. Referred to as Brasil Maior (Greater Brazil) and the subject of much media attention, the government's plan is to augment national competitiveness through incentives for technical innovation, research, and added value in production as well as provide clear advantages for exporters who are suffering from the continued appreciation of the Brazilian real.

The measures include incentives to increase financing lines; reduction of payroll costs in some industry sectors which foresees the substitution of the 20% social security contribution with a 1,5% tax on gross revenue; cash refunds for exporters based on export revenue, potentially up to 4%; cash refunds of PIS/Cofins (federal contribution tax) credits and their payment within 60 days; incentives for the automotive industry; and excise tax reductions, among others. While the relevant legislative provisions have been issued, some are still subject to formal regulation and are expected to be issued in the next few months. Notwithstanding, a number of regulatory provisions have already been issued, and the benefits are:

  • PIS/Cofins credits on the value of new capital assets may now be offset at gradually reduced rates, allowing for a 1/11 offset for goods acquired in August 2011 to a full offset for goods acquired from July 2012. This applies to new assets bought or received from August 3 2011.

  • Companies who qualify for the government's digital inclusion programme are exempted from income tax. Further, costs incurred in scientific research conducted in private, non-profit, qualifying institutions are now deductible for calculating the profit and social contribution tax base.

  • From December 2011 to December 2012, payroll costs are to be reduced in certain industries including information technology, clothing, leather, footwear and furniture manufacturers. In place of existing employer contributions to social security (20% on payroll), a fixed rate of 1.5% (2.5% for information technology services) will apply to the companies' gross revenue.

  • As a disincentive to imports of the aforementioned goods, the rate of Cofins on import has been increased from 7.6% to 9.1%.

Foreign administrators – permanent visa – minimum investment

Companies wishing to appoint a foreign administrator, manager, director or executive in Brazil must comply with the requirements established by the National Immigration Council. The foreign national must be resident in Brazil, for which a permanent visa is required, conditioned to a minimum capital investment. Until recently, this was set at the equivalent of R$200,000 (US $122,399) for each requested visa, duly registered with the Central Bank. Alternatively, a lower investment of R$ 50,000 ($30,599) was permitted, provided that at least 10 new positions were created for a period of at least two years. A new resolution issued by the Council (no 95 of 2011) raises these values to R$600,000 ($366,837) and R$150,000 ($91,709) respectively, keeping the requirement of creating 10 new position for at least two years following entry of the administrator.

Nélio Weiss ( and Philippe Jeffrey (, São Paulo


Tel: +55 11 3674 2271

Fax: +55 11 3674 2040


more across site & bottom lb ros

More from across our site

The UN may be set to assume a global role in tax policy that would rival the OECD, while automakers lobby the US to change its tax rules on Chinese materials.
Companies including Valentino and EveryMatrix say the early adoption of EU public CbCR rules could boost transparency of local and foreign MNEs, despite the short notice.
ITR invites tax firms, in-house teams, and tax professionals to make submissions for the 2023 ITR Tax Awards in Asia-Pacific, Europe Middle East & Africa, and the Americas.
Tax authorities and customs are failing multinationals by creating uncertainty with contradictory assessment and guidance, say in-house tax directors.
The CJEU said the General Court erred in law when it ruled that both companies benefitted from Italian state aid.
An OECD report reveals multinationals have continued to shift profits to low-tax jurisdictions, reinforcing the case for strong multilateral action in response.
The UK government announced plans to increase taxes on oil and gas profits, while the Irish government considers its next move on tax reform.
War and COVID have highlighted companies’ unpreparedness to deal with sudden geo-political changes, say TP specialists.
A source who has seen the draft law said it brings clarity on intangibles and other areas of TP including tax planning.
Tax consultants say companies must not ignore financial transactions in their TP policies as authorities, particularly in the UK, become more demanding.