On June 5, 2020, Decree No. 10,387/2020 was published, which provides incentives to finance infrastructure projects with environmental and social benefits, allowing the income earned by individuals and legal entities arising from financial instruments for funding this type of project to receive the tax benefit of a reduced rate of withholding income tax, similar to the income from the so-called "infrastructure debentures" and CRIs (Real Estate Receivables Certificates).
The decree brought changes to articles 2 and 3 of Decree 8,874/206 to include as priority projects of infrastructure or economic production intensive in research, development and innovation that provide relevant environmental or social benefits, which may raise funds through the issuance of so-called green bonds or greenbonds:
- Sector of urban mobility:
- non-motorized or low-carbon public transport, such as monorails, subways, urban trains and LRVs - light rail vehicles;
- electric and hybrid biofuel or biogas buses;
- implementation of Bus Rapid Transit - BRT infrastructure.
- Sector of energy:
- renewable technologies for solar, wind and waste power generation;
- small hydroelectric plants with a minimum power density of 4W/m² (four watts per square meter) of flooded area.
- Sector of basic sanitation:
- water supply and sewage systems;
- stormwater management and urban drainage systems; and
- solid urban waste management systems.
In addition, projects carried out in subnormal settlements or isolated urban areas were included, as they are considered social benefits, according to the definition established by the Brazilian Institute of Geography and Statistics - IBGE, provided that they are linked to the sectors object of the decree.
The Ministry responsible for the sectors contemplated with such benefit shall issue an ordinance regulating the rules for the approval of projects, such as simplified requirements and ways to monitor the stages of the projects.
Such measure indicates a trend to encourage investments in the infrastructure area, which is proving to be a very relevant alternative to boost the economy and the Brazilian capital market and generate new opportunities
Barcellos Tucunduva's Tax Planning and Infrastructure and Energy practice areas are at your disposal - [email protected] and [email protected].
