Provisional Measure ("MP") No. 960/2020 extended for one (1) year the term for suspension of payments of taxes provided for in the Drawback concession acts that had already been extended for one (1) year and would expire in 2020.
The Drawback is a special regime provided for in Law No. 11,945/2009 and aims to allow the manufacturer or Brazilian producer to acquire inputs free of tax, via import or domestic market, for the manufacture of products for export.
The tax relief, which starts with a suspension of taxation and may be converted into exemption, reaches, at the federal level, which is covered by MP no. 960/2020, the II, the IPI, and the PIS and COFINS contributions.
According to the MP's explanatory memorandum, in 2019 alone about $49 billion in exports were made with the use of Drawback, or about 21.8% of total Brazilian exports.
For further information on Drawback or its extension, contact the Tax Advisory Services team (tributarioconsultivo@btlaw.
