Originally published in the June 6 edition of World Tax Daily (Copyrights Tax Analysts – www.taxanalysts.com)
Brazil’s Senate on June 4 approved Provisional Measure 418, which introduces a new, beneficial tax regime applicable to the country’s special export processing zones (ZPEs). Senate approval came less than a month after the measure was approved by the House of Representatives.
Provisional Measure 418 suspends the import tax, the federal excise tax (IPI), P.I.S. (Program for Social Integration contribution), COFINS (the Contribution for the Financing of Social Security), including the P.I.S. and COFINS on imports, and the additional tax on international freight for business located in ZPEs.
The Senate made no change to the measure approved by the House of Representatives on May 6. The measure now will be submitted to President Luiz Inácio Lula da Silva for signature.
The next step is for the government to issue a presidential decree that creates a commission charged with reviewing criteria for the creation of new ZPEs. Brazil currently has 17 operating ZPEs and 7 awaiting formal creation, which should be expedited by the new measure.
David Roberto R. Soares da Silva