One of the key difficulties that foreign suppliers have when competing against Brazilian companies is the tax incentives granted to their Brazilian competitors. The availability of these incentives has been the subject of many diplomatic battles and WTO arbitrations.
Very large players looking to enter the Brazilian market are often able to obtain tax incentives themselves. However, smaller suppliers often struggle, as qualifying for the incentives may be too difficult, expensive and time consuming to commit to the market.
Until now, even ascertaining which competitors received incentives required some time and effort, as businesses did not have to publicise that they received incentives in the vast majority of the schemes.
On 16 May 2023, the Brazilian Federal Revenue Department published Portaria RFB 319/2023. This new rule requires that companies provide information to the Department regarding “incentives, waivers, benefits or immunities of a tax nature whose benefit is the legal entity”. In turn, the Department will make these available on its website and accessible to the public.
At this point, only those businesses that were receiving incentives in 2021 at the federal level are covered. However, the scope of the information to be provided is to be “gradually expanded”.
This is another positive step towards modernising Brazil’s regulatory framework. Moreover, the availability of this information to potential suppliers to the Brazilian market will permit more accurate assessments of the competitive landscape that the suppliers are likely to face in Brazil.
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Brazil Brazilian Federal Revenue Department Compliance Foreign Direct Investment Importing Receita Federal
Last modified: May 18, 2023