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Legal Update

Brazil: Rio de Janeiro State Decree No. 45339/2015 – Special Tax Treatment for Implementation of Offshore Naval Base Projects in Rio de Janeiro

18 August 2015
Tauil & Chequer Legal Update

On August 14, 2015, Rio de Janeiro State Decree No. 45339 was published in the Official Gazette. This Decree contemplates the rules for concession of a special tax treatment applicable to acquisitions of goods for the fixed assets that are necessary for the implementation of offshore naval base projects in Rio de Janeiro.

This program defers the state taxes due in the following transactions:

  • Imports of machinery, equipment, parts, pieces and accessories to be included in the taxpayer’s fixed assets, provided that they are imported and cleared through customs in Rio de Janeiro’s ports or airports;
  • acquisition - within the State of Rio de Janeiro - of machinery, equipment, parts, pieces and accessories to be included in its fixed assets; and
  • Interstate acquisition of machinery, equipment, parts, pieces and accessories to be included in the fixed asset, in relation to the difference between tax rates (DIFAL).

The relevant purchaser will be liable for paying the deferred taxes. Such deferred taxes should be paid in case of sale or exit of the assets, in which case the tax basis will be the value of the sale.

Taxpayers intending to benefit from this Special Tax Treatment must submit a (duly approved) formal request to the Industrial Development Company of the State of Rio de Janeiro (Companhia de Desenvolvimento Industrial do Estado do Rio de Janeiro).

Finally, a taxpayer will not be granted the special tax treatment in question if:

  • it is not in good standing with the tax register of the State of Rio de Janeiro;
  • it has debts towards the State Treasury (unless the enforceability of such debts has been suspended);
  • it holds interests or has a shareholder that holds interests in a company that has enforceable debts recorded in the state debt register (unless the enforceability of such debts has been suspended) or its state registration has been cancelled or suspended due to a tax irregularity.
  • it is not in good standing with, or is in default in, tax installment payment programs of the State of Rio de Janeiro; and it has an environmental liability that has not been resolved with the appropriate state agencies.

Authors

  • Ivan Tauil
    Partner
    T + 55 21 2127 4213
  • Carolina M. Bottino
    T +55 21 2127 4217
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