As of 2023, Brazilian exporters will be able to take advantage of the regime's tax exemption to purchase services such as transport, insurance, cargo handling and storage.

Law No. 14,440, of September 2, 2022, was enacted this Monday (5/9), which authorizes the inclusion of services in the suspension drawback regime, among other provisions. The measure allows Brazilian exporters to purchase imported or domestic services with suspension of payment of the contribution to PIS/Pasep and Cofins, provided that these services are directly and exclusively linked to the export or delivery, abroad, of the product resulting from the use of the drawback mechanism.

The suspension drawback is a tool for the international insertion of Brazilian companies that supported the export of more than US$ 61 billion in 2021 and, currently, covers tax relief only on the purchase of foreign and national goods intended for the industrialization of products that will be exported.

With the new legislation - which will come into force in January 2023, to comply with the country's tax rules -, services related to the export of goods, such as transport, insurance, handling and storage of cargo, will be treated similarly to that applied to goods used in the manufacture of items sold abroad, generating a reduction in charges and greater competitiveness for local exporters.

Services in the economy

The initiative gains relevance in the context of the increasing use of services by other sectors of the economy, especially the industrial sector, through global and regional value chains. Data from the Organization for Economic Cooperation and Development (OECD) indicate that services represent 35.7% of the value added to Brazilian exports of manufactured goods.

The legislation published now is also in line with an international benchmarking study that verified the practice of inserting services in special customs regimes for processing for export. The work, available on the website of the Secretariat of Foreign Trade (Secex), was carried out within the scope of the Technical Cooperation Agreement signed between the Ministry of Economy and the United Nations Development Program (UNDP), with the G20 - group of the 20 largest economies in the world.

The study results revealed that ten G20 members allow the acquisition of tax-exempt services through regimes similar to the Brazilian drawback - South Africa, Germany, Saudi Arabia, Argentina, France, Italy, Mexico, United Kingdom, Russia and the Union European.

These G20 members adopt strategies to include services in special customs regimes for the industrialization of export-oriented goods combined with general internal tax policies, showing that the measure sanctioned by the Executive Power of Brazil has already been applied by several countries to increase the tax neutrality and improve competition conditions in its foreign sales.

Adjustments and regulation

For the implementation of the new legislation, the federal government will make adjustments to computerized control systems and will issue an ordinance regulating the criteria for granting, fruition, monitoring and inspection of the drawback suspension regime, considering the possibility of using services.

The estimated fiscal cost for the coming year, due to the normative act sanctioned by the Executive Branch, will be approximately R$ 1.1 billion, as provided for in the Budget Law Project (PLOA) sent to the National Congress.

Source: www.gov.br