Brazil: Brazil announces new incentives to boost competitiveness of national goods
International Tax Review is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2023

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

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

More than 1,000 PwC staff in China and Hong Kong engaged in improper answer sharing, it is understood
Yusuf Akhmadi of Indonesia’s Directorate General of Taxation reports on the country’s latest domestic and cross-border initiatives to clamp down on tax evasion
The new rate is a blow to Samsung, while two law firms have made significant tax hires into their respective Washington DC offices
Rema Serafi, KPMG’s first-ever female vice chair for tax, talks about breaking the mould in an exclusive interview with ITR
The metal multinational’s victory, in a case worth $12 million, continues the trend of companies coming out on top against India’s revenue department
Guy Bud and Matthew Greene from litigation firm Stewarts review a dispute on tiered partnerships, which raises questions on corporation tax and partnership law
The stagnating pay and tax bonuses cap follow slashed payouts for the deals team and business consolidation in the last month
A greater UN role has been secured after disagreements between developed and developing countries over the OECD’s influence in global tax reform
The US-based firm picks up investment fund specialist Ceinwen Rees, while Ireland nearly doubles its corporation tax receipts in three years
The order comes amid controversy over another of David Collard’s companies’ tax and TP affairs