REPORTO and RETID are extended to 2020 and 2032
On 31 May 2016, the Federal Revenue Services (RFB) published Normative Instruction 1,644/2016, which extends the validity of tax benefits set forth in the so-called Tax Regime for Incentive to the Modernisation and Enlargement of Ports Structure (REPORTO) and in the so-called Special Tax Regime for the Defence Industry (RETID).
The REPORTO was created by Law 10,033/2004 and regulated by Normative Instruction 1,370/2013, and is intended to promote the modernisation and enlargement of the country’s port structures.
The main feature of REPORTO is to grant tax relief on the acquisition of certain machinery and other goods by its beneficiaries, in Brazil and abroad (complete list in Decree 6,582/2008, Appendix I), with suspension of payment of IPI, PIS/COFINS, IPI-importation, Importation Tax and PIS/COFINS-Importation.
Possible beneficiaries of the regime are (i) port operators; (ii) concessionaires of organised ports; (iii) tenants of public use port facilities; (iv) the legal entity authorised to exploit port facilities of total or partial private use, including those that operate with offshore vessels; (v) concessionaries of railway transportation; (vi) dredging companies, as defined in the Ports Law (Law 12,815/2013); (vii) concessionaires or holders of permissions to operate secondary zone bonded facilities; and (viii) professional and multifunctional training centres, as defined in art. 33 of Law 12,815/2013.
The RETID, in its turn, was created by Law 12,598/2012, and allows sales to its beneficiaries with the suspension of payment of PIS/COFINS and IPI levied on the output from industrial establishments, and allows beneficiaries’ industrial establishments to undertake importations with IPI-importation payment suspension.
The possible beneficiaries of the regime are (i) Strategic Defence companies (“EEDs”) that either produce or develop national defence goods, as defined in acts issued by the Executive Power, or provide the services listed up in art. 10 of Law 12,598/2012, to be applied in the maintenance, conservation, modernisation, repair, overhaul, conversion and industrialization of the referred to goods; (ii) legal entities that either produce or develop parts, spare parts, tools, components, equipment, systems, subsystems, inputs and raw materials to be applied in the production or development of national defence goods, as defined in acts issued by the Executive Power, and (iii) legal entities that provide the services listed up in art. 10 of Law 12,598/2012, to be applied as inputs in the production or development of national defence goods, as defined in acts issued by the Executive Power.
The benefits of REPORTO that have already been granted by Declaratory Executive Acts (ADEs) issued pursuant to art. 17 of Normative Instruction 1,370/2013 are automatically extended up to 31 December 2020, except for the cases of possible non-compliance with the conditions required for the fruition of the regime, as defined in said normative instruction.
The benefits of RETID that have already been granted by ADEs issued pursuant to art. 18 of Normative Instruction 1,454/2014 are automatically extended up to 22 March 2032, except for the cases of possible non-compliance with the conditions required for the fruition of the regime, as defined in said normative instruction.