SUDENE AND SUDAM
75% reduction and 30% reinvestment of IRPJ
As a fiscal instrument of the National Policy for Regional Development (PNDR), tax incentives and benefits compete together with constitutional and development funds for the attraction and local promotion of new investments, functioning, in particular, as an auxiliary element in the improvement of economic development and of the North and Northeast regions, stimulating the growth of sectors of the economy considered by the Federal Government as priorities for these regions.
The importance and necessity of the fiscal mechanism in attracting new investments and maintaining existing ones are based on the observation that historically production and per capita income in the North and Northeast regions have always been and continue to be lower than in the dynamic centers of the national economy. which makes these regions tend to attract fewer companies than the richest regions and, consequently, grow less.
The main objectives of this project for our clients are:
a) Advising on the preparation of the claim for obtaining or renewing the 75% IRPJ reduction incentives, for each of the appropriate production lines with the modality;
b) Carry out due follow-up with the responsible bodies – Superintendence for the Development of the Northeast – SUDENE. Superintendency for the Development of the Legal Amazon - SUDAM and Federal Revenue Service of Brazil - RFB, in order to give due speed in the approval of the claims;
Legal framework:
✓ Legal: Law No. 13,799 of January 3, 2019, Provisional Measure No. 2,199-14, of August 24, 2001 and Law No. 8,167, of January 16, 1991;
✓ Regulatory: Normative Instruction RFB No. 267 of December 23, 2002;
✓ Conception and methodology: Sudene and Sudam manuals;
General Lines:
The benefit is based on the calculation of the Operating Profit for projects located in the North, Northeast and part of MG and ES.
The idea of the incentive is to enable regional development and, for that, there is a need to produce a specific calculation base, distinct from real profit. Thus, the Operating Profit will correspond to the calculation base for the 75% reduction in IRPJ. The general rules to be observed by taxpayers are found in Decree-Law nº 1.598/77 and Normative Instruction nº 267/2002.
We can divide the way of calculating the Operating Profit into three phases:
a).
b) Appropriation of incentivized Net Revenue - is a fundamental step, and must be determined or produced by the Constitutive Report Sudam;
c) Calculation of the benefit – IRPJ and incentive incentive.
Once the operating profit of each incentivized unit is determined, the benefit will then correspond to a 75% reduction in the sum of IRPJ and additional incentivized, as above. This amount can be deducted directly from the “general” IRPJ calculated for all the taxpayer's operations.
REQUIREMENTS
The company needs to have an enterprise in the N/NE regions, be taxed by the Real Profit and fit into sectors considered by the government as a priority, such as infrastructure, represented by energy projects, telecommunications, transport, installation of gas pipelines, gas production, water supply and sanitary sewage, agribusiness linked to irrigated agriculture, fish farming and aquaculture, the transformation industry, electro-electronics, mechatronics, information technology, biotechnology, vehicles, components and auto parts, and the component industry ( microelectronics), among others.
ASKEL PERFORMANCE
Obtaining/Renewing the incentive from the regional superintendencies and the following fronts:
Fixed reduction of 75% of IRPJ
Review / Compliance of the calculation of the 75% Reduction benefit, revisiting the following aspects:
Methodology for calculating Incentive Net Revenue, and;
Review of specific addition/exclusion adjustments to Exploration Profit;
Thus, maximum use of the incentive is guaranteed and we recover what was not used in the last five calendar years.
Reinvestment of 30% of the IRPJ – if there was a profit in 2018.
The Reinvestment of 30% of IRPJ is an incentive that allows companies in the SUDENE and SUDAM area to reinvest in their own equipment modernization or supplementation projects. The reinvestment corresponds to 30% of the Income Tax due, calculated on the operating profit – further reducing the IRPJ payable.
Law 13,799/2019, which extended the Sudene and Sudam benefits, also brought a novelty that companies with Reinvestment projects of 30% of the IRPJ will be able to use half (50%) of that amount to be reinvested as working capital.
The unpaid portion of the IRPJ referring to the use of the Reinvestment benefit must be deposited in the Bando do Nordeste. Such deposits will be made, at the latest, on the tax payment dates. The amount deposited, while not invested, is reserved and preserved, in an escrow account, and from the date the deposits are made until their release, they are remunerated by the Bank based on the Extramarket Rate of the Central Bank (around of 95% of SELIC), according to article 10, of Law nº 10.177, of 01/12/2001.
The amount deposited will be redeemed upon presentation of a technical-economic project.