December 19 2003
A wide range of government-sponsored investment incentives are available in Brazil. This update discusses some of the special incentives available in the free trade zone of Manaus for investors in the industrial, commercial and agricultural sectors that are interested in carrying out business within this geographic market area.
The free trade zone of Manaus was created in 1967 to stimulate manufacturing investment in the region by providing tax incentives to companies on a phase-out basis until 2013.
In order to enjoy the region's tax and tariff incentive benefits, the applicant company must submit details of its projected activity, manufacturing processes and other relevant data to the Superintendency of Manaus. Such information is required in order to ensure that the applicant companies are not simply imported product assembly warehouse operations (which are expressly prohibited in Article 1(2) of Decree 2891/1998).
If the superintendency gives its approval, the company becomes eligible to receive the various federal, state and municipal tax and tariff incentives.
Federal tax and tariff incentives include:
Special Amazon Export Programme
The Special Amazon Export Programme concerns the import of raw and component products for the manufacture of goods that are intended exclusively for export. The following incentives are available under this programme:
Company federal income tax benefits are also available. Initially, Decree-Law 756/1969 stipulated total exemption, although currently this exemption is variable at a rate of between 30% and 75% (pursuant to Decree 1564/1977) and relative only to those projects approved from January 1 1998 under Provisional Measure 2199-14.
State tax and tariff incentives include:
A 50% ICMS tax credit is presumed on state and inter-state commercial operations that are unrelated to the commercialization of foreign products outside the free trade zone.
ICMS tax deferment applies to the importation of raw goods. ICMS taxation does not apply to moving parts and pieces.
Municipal tax and tariff incentives include:
For further information on this topic please contact Lourdes Helena Moreira de Carvalho or Augusto Barbosa Moreira de Carvalho at Garcia & Keener Advogados by telephone (+55 21 2203 2466) or by fax (+55 21 2233 3184) or by email (firstname.lastname@example.org or email@example.com).
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Lourdes Helena Moreira de Carvalho