Originally published in the June 3 edition of World Tax Daily (Copyrights Tax Analysts)
Brazil’s Ministry of National Integration has issued Resolution 20/2010, which approves a single tax incentives regulation for tax breaks in force in the jurisdictions of the Superintendence for Development of the Amazon Region (SUDAM) and the Superintendence for Development of the Northeastern Region (SEDENE).
The regulation, published in the official gazette on May 28 and entered into force the same day, consolidates all the rules for tax breaks available to companies established or interested in establishing production businesses in the two regions. SUDAM has jurisdiction over Brazil’s northern states of Acre, Amapá, Amazonas, Mato Grosso, Rondônia, Roraima, Tocantins, Pará, and a portion of the state of Maranhão. SUDENE’s jurisdiction covers the northeastern states of Maranhão, Piauí, Ceará, Rio Grande do Norte, Paraíba, Pernambuco, Alagoas, Sergipe, Bahia, and some municipalities of the southeastern states of Minas Gerais and Espírito Santo.
The regulation contains 50 articles dealing with tax relief and incentives, including:
- a corporate income tax reduction of 75 percent;
- a regressive reduction (of either 25 percent or 12.5 percent) of corporate income;
- deposits for reinvestments;
- accelerated depreciation rates;
- the accelerated use of P.I.S. (Program for Social Integration contribution) and COFINS (the Contribution for the Financing of Social Security) tax credits;
- an exemption from the freight tax on imports; and
- the financial operations tax for currency exchanges related to payments for imports destined for the SUDAM region.
David Roberto R. Soares da Silva