“REINTEGRA”: Tax benefict broaden application of 3% for 2015

The Special Regime for the Reintegration of Taxes for Exporting Companies (Reintegra) was launched with the objective of reintegrating amounts referring to residual tax costs in the production chains of exporting companies, since 2011, through Provisional Measure nº 540/2011, which become Law 12,546 / 2011.

In the first stage, the aim is to increase the competitiveness of national industry by encouraging technological innovation and value added. Among other measures foreseen in the Brazil Plan - PBM, the “Reintegra” aims to encourage the national industry through the tax exemption of exports, thus preventing the export of taxes.

In this sense, as of 01/12/2011, the legal entity producing the export of the manufactured goods classified in the "Tax Incidence of Industrialized Products" codes (TIPI) disposal in the Decree that regulates it (nº 7.633 / 2011 ), may establish value for the purpose of partially or totally reimbursing the existing taxable waste in its production chain. Nevertheless, Decree nº 8,415 of 2015 reduced the tax benefit granted so far from 3% to 1% between March 1, 2015 and December 31, 2016. It is also noted that the percentage of benefit to return export revenue varies a lot over the years. It was still reduced to 0.1% in the period from December 1, 2015 to December 1, 2016. In addition, it was set at 2% from January 1, 2017 to December 31, 2017. It is also worth noting that in 2018 the percentage was reduced to 2% until December 31, 2018.

Despite this scenario, the Federal Supreme Court (STF) has issued favorable decisions to taxpayers against the reduction to apply the benefit in 2015, a benefit offered by “Reintegra”. To sum up, before companies would apply 1%, and now can reach the level of 3%. The main argument is based on the constitutional principle of annual precedence which prohibits the increase of taxation in the same period which the law has instituted it, and in part also violates the principle of “ninety days” precedence, which sets that a tax can only be levied by the Federal Treasury after 90 days (hence the name) of the publication of the new Law forcing the duty.

It should be noted that although there is no consolidated understanding by the Court, the decisions issued by the STF Ministers are consolidating this argument in the ground that taxpayers can benefit from the increased rate.

It should be clarified that the amount of the benefit consisting of 3% of exports may be used in two scenarios, one to offset federal taxes administered by the Brazilian Internal Revenue Service, such as IPI, PIS, COFINS, IRRF, IRPJ, CSLL, IOF, and the second, to request your compensation.

Our team is available to discuss the new rules.