TAX INCENTIVES

AND BENEFITS

The region of the port of Pecém area has one of Brazil’s most interesting tax incentive package covering the federal, state and municipal sectors.

Incentives – Industrial Development Fund (FDI)

Ceará has opened its doors to growth and has welcomed anyone who wants to grow together. For this purpose, the state investment attraction policy offers tax incentives such as the ICMS exemption derived from industrial activities.


The Industrial Development Fund (FDI), Law #10.367, dated 07/12/1979 and amendments, aims to foster the state industrial policy. The percentage of the tax incentives, return rate and the exploitation of benefits are variable.


Benefits
Federal
State

Municipal

Program to Encourage the Industrial Development – PROVIN

PROVIN, up to 75% of the ICMS due, return from 1% to 25%.


Program to Encourage Merchandise Distribution Centers in Ceará – PCDM
PCDM: up to 75% of the ICMS due in the interstate outgoing merchandises. Deferments: 100% on fixed assets, up to 100% on raw material.


Program to Encourage the Productive Chain Generating Renewable Energy – PIER

PIER: 75% of the ICMS collected monthly within the legal timeline; return of 1%.


Program to Attract Strategic Ventures – PROADE

PROADE: up to 99% of the ICMS related to the company’s own production transactions; return up to 1%.

PROVIN
P1: Creation of Jobs
P2: Transaction Costs
P3: Definition of the Business Location
P4: Social, Cultural and Environmental Responsibility
P5: Research and Development Program
Pe: Suitability to the Production Base


Methodology to calculate the benefit

The basis for percentage calculation is made after analyzing 5 important parameters in which each of them has a specific scale score.

The benefit is defined according to the score the company intend to achieve, in which each score will correspond to one percentage point of benefit, taking into consideration the maximum limit of 75% of the ICMS due.


The total score (PT) is defined by:
PT = P1 + P2 + P3 + P4 + P5 + Pe

P1 – Creation of Jobs

The P1 score is defined by:
a) Over 300 direct jobs: 25 points
b) 200-299 direct jobs: 20 points
c) 100-199 direct jobs: 15 points
d) 50-99 direct jobs: 10 points
e) Up to 49 direct jobs: 05 points

P2 – Transaction Costs


The P2 score is defined by:
P2 = [(external entry of goods +  release of goods – except export) (total entry + total release)] x 100
 

Where:
External entry of goods = the value of the company’s entry of goods transactions coming from other states.
External release of goods = the value of the company’s release of goods to other states (except export).
Total entry = the value of total company’s entry of goods transactions.
Total release = the value of total company’s release of goods transactions.


a) Over 60: 20 points
b) 51-60: 15 points
c) 41-50: 10 points
d) 30-40: 05 points
e) Up to 29: 00 points

P3 – Definition of the Business Location


The P3 score is defined by:

P3 = Dist + [(GDPceará - GDPmun) / 25]


Where: 
Dist = Distance in a straight line between the city where the company will set up and the capital of the state.
GDPceará = GDP per capita of the state of Ceará
GDPmun = GDP per capita of the city where the company will set up


PS: Only positive values for the second component of the formula will be taken into account.
a) Over 201: 40 points
b) 101-199: 30 points
c) 50-100: 20 points
d) Up to 49: 10 points

P4 – Social, Cultural and Environmental Responsibility

The P4 score is defined by:
a) Education, health and food safety: 01 point
b) Culture (*): 01 point
c) Sports (**): 01 point
d) Digital inclusion (***): 01 point
e) Environmental management: 02 points
f) Support programme for disabled people (PCD): 02 points
g) Federal, State and Municipal Government’s Social Programmes: 01 point

P4 can achieve the maximum number of 5 points.


(*) Investments in cultural places like libraries, cultural centres etc., investments in both material and non-material heritage, technology applied to culture, sound recording, audio-visual materials, collections,  musical investiments and others.

(**) Investments in sports that benefit low income families.

(***) Adoption of digital devices including assembly and maintenance.

P5 – Research and Development Program

The P5 score is defined by:
For each 1% of the ICMS payable invested in R&D will be given one point in the score ranking, limited to the maximum number of 5 points. The investments in R&D must be recognized and validated by the Secretary of Science, Tecnology and Higher Education of the state of Ceará – SECITECE.

 

Pe - Adequacy on the Regional Production

The Pe score is defined by:
Evaluation up to 30% from the sum of P1 + P2 + P3 + P4 + P5 for enterprises whose activities show concrete progress in the consolidation of economic sectors presenting strategic relevance for the region development where they intend to settle, defined according to CEDIN criteria.

 

Definition of return

It will be defined according to the score obtained as follows:
a) PT ≥ 75 = 25% return
b) PT > 75 = [25 – (PT – 75)] % return

 


Term Benefit
It will be defined according to the score obtained as follows:
a) PT ≥ 50: 10 years
b) 35 ≤ PT < 50: 8 years
c) PT < 35: 5 years

PCDM


The companies encouraged by the PCDM will be entitled to:
I) Warranty of PCDM incentives up to 120 consecutive months, with the ICMS reduction of 75% for inter-states release of goods;


II) Exemption from ICMS:
     
a) on import goods with no similar produced in Ceará;
     
b) on import from abroad as well as on the entry of goods from other states to integrate fixed assets.


The benefit criteria is defined by:

The gross annual revenue of R$ 15.000.000,00 at least that could be achieved as follows:
R$ 5.000.000,00 in the first 12 months;
R$ 10.000.000,00 from the 13th to the 24th month.

 

PIER

Benefit intended to manufacturers of equipments used for producing renewable energy.


 Business enterprises encouraged by PIER will be entitled to:


 I) Benefits guarantee granted for a period up to 120 months;


II) Exemption from 75% of ICMS collected monthly;


III) Return of the main limit and addition of 1% corrected by the TJLP (Long-Term Interest Rate).

Tax incentives fostering the installation of economic enterprises considered strategically important  to the development of the state of Ceará.


Business societies encouraged by PROADE will be entitled to:


I) Benefits guarantee for a period up to 10 years, extentable for equal period;
II) Tax incentives up to 99% of the ICMS related to the company’s own production activities;
III) Return rate up to 1%. 

Are duly taken into account strategic undertakings projects considered important to the state of Ceará development such as  the implementation, the modernization and expansion of industrial plants of:


I) Extraction of metallic minerals;
II) Manufacture of non-metallic mineral products;
III) Manufacture of pharmochemical and pharmaceutical products;
IV) Manufacture of vehicles, vans, trucks and buses;
V) Manufacture of chemical products;
VI) Textile industry;
VII) Footwear manufacturing;
VIII) Manufacture of oil refinery and petrochemical products;
IX) Steel industry;
X) Manufacture of locomotives, wagons and other rolling stocks;
XI) Manufacture of aircrafts, aircraft structural components and engine parts;
XII) Milling wheat grains;
XIII) Manufacture of electric motors, spare parts and accessories;
XIV) Other industrial activities that have no similar production within national territory;
XV) Implementation of the entrepreneurial company in areas to be defined  by the act of Executive Power and placed, necessarily, in  regions containing correctional facilities and/or prison establishments administered by the Department of Justice and Citizenship of the state of Ceará – SEJUS, or any other that may replace it, in order to guarantee the minimum percentage of 90% of job vacancies to the prisoners kept in the Penitentiary Compounds of the state of Ceará.

Other Potential Benefits

IR: reduction up to 75% (Income Tax)


AFRMM: 100% reduction (Additional Freight for the Renewing of the Merchant Marine)


ISS: rate reduction up to 2% (Services Tax of any kind)


IPTU: possible reduction

(Municipal Real Estate Tax)


ITBI: possible reduction (Property Transfer Tax)

 

 

 

 

FONTE: ADECE.

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