Recently, Brazilian Federal Government has adopted measures that affected exporters resulting in a net tax increase.
The background for such measures has its origin in efforts to compensate for losses in government overall tax collection due to reductions on the sales of diesel fuel, a result of negotiations with truck drivers to end a national strike in June 2018.
The reduction of REINTEGRA tax credit rate is one of such measures affecting exporters. REINTEGRA is a tax exemption that allows exporting companies to book a credit at the rate of 2% of its exporting revenue. However, as of June, the Decree No. 9,393/2018 was issued to reduce such percentage to 0.1%, effective immediately.
According to the Federal Constitution, any decision that results in tax increase demands a 90-day period prior to effectiveness, which presents a high probability for companies that benefit from the special tax regime of REINTEGRA to postpone the adoption of the new tax credit rate to September 2018, by filing a lawsuit to obtain an injunction.
Our firm has a team of experts on REINTEGRA’s benefits to advise you about this matter.