Indirect TaxJune 05th, 2008ProVeículo – Incentive Program in connection with Automotive Producer Investment São Paulo State has just issued a new ruling (State Decree n° 53.051/08) that establishes the ProVeículo, a program that intends to stimulate investment in machinery, equipment, cars, busses, trucks and agricultural machinery occurring in the state. To receive this benefit, a company that produces vehicles and machinery classified under chapters 84 and 87 of the NBM/SH – Nomenclatura Brasileira de Mercadorias / Sistema Harmonizado (Merchandise Brazilian Name – Harmonized System) shall present an investment plan to (i) modernize its plant(s) or increase plant capacity; (ii) build a new plant; (iii) develop a new product; or (iv) increase its business in São Paulo State. This program grants its beneficiaries the right to use ICMS credits accumulated until November 30th, 2010, to: a) pay for goods acquired (including electric power) that will be used in the investment plan in São Paulo State. However, this benefit is not applicable when the acquired good is not used for production; b) pay ICMS related to the importation of goods destined to the fixed asset, if customs clearance procedures are taken in São Paulo State; and c) transfer the ICMS accumulated credit to another ICMS taxpayer, in order to make the investment project available. In order to use the ICMS accumulated credit, the following requirements must be met: (i) the global amount invested must be at least R$ 300 million; (ii) the ICMS accumulated credit must be at least R$ 5 million and must be properly registered by the time the benefit request is filed; (iii) the taxpayer must formalize its participation into Jovem Cidadão - Meu Primeiro Trabalho, a specific labor program, and meet all terms determined by the Secretaria de Emprego e Relações do Trabalho do Estado de São Paulo (Labor Secretariat of São Paulo State). If all requirements are met, the Secretaria da Fazenda do Estado de São Paulo (Treasury Secretariat of São Paulo State) is authorized to grant the Special Regime to:
For regulatory purposes, the Secretaria de Desenvolvimento, de Economia e Planejamento do Estado (Development, Economic and Planning Secretariat of São Paulo State), as well as the Secretaria da Fazenda (Treasury Secretariat of São Paulo State), will issue the new ruling. For this benefit, the taxpayer must file a request with the Secretaria de Desenvolvimento, de Economia e Planejamento do Estado (Development, Economic and Planning Secretariat of São Paulo State) before December 31st, 2010. This request shall be addressed to a specific commission (Comissão de Avaliação da Política de Desenvolvimento Econômico do Estado de São Paulo). For more information, contact one of our professionals: Roberto Cunha, + 55 11 2183-3118, rcunha@kpmg.com.br Roberto Alves da Cunha |
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