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

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

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 (nelio.weiss@br.pwc.com) and Philippe Jeffrey (philippe.jeffrey@br.pwc.com), São Paulo

PwC

Tel: +55 11 3674 2271

Fax: +55 11 3674 2040

Website: www.pwc.com

more across site & shared bottom lb ros

More from across our site

Wim Wuyts, who had been head of the specialist tax network since 2017, is moving on to a new role with WTS’s Belgian member firm
MNEs are increasingly using algorithmic tools in TP. Sahasranshu Dash argues that data ethics should therefore plug directly into the TP design process
The Institute of Chartered Accountants in England and Wales also queried whether HMRC resources could be better spent scrutinising larger entities
Grant Thornton’s Austria tax head likens his practice to an escape room, shares his football coaching ambitions, and explains why tax is cool
Awards
ITR is delighted to reveal all the shortlisted nominees for the 2025 EMEA Tax Awards
Awards
ITR is delighted to reveal all the shortlisted nominees for the 2025 Asia-Pacific Tax Awards
The fates of pillars one and two hang in the balance after the US successfully threw its weight around in G7 and Canadian negotiations
Rafael Tena tells ITR about the ‘crazy’ Mexican market, ditching the hourly rate, and refusing to grow his fledgling firm in an ‘unstructured way’
It should be easy for advisers to be transparent about costs, Brown Rudnick partner Matthew Sharp said in response to exclusive ITR in-house data
The sprawling legislation phases out Joe Biden-era green tax incentives for businesses; in other news, the UK will reportedly maintain its DST despite US pressure
Gift this article