Programa Mover

Law No. 14.902 was published on June 28, 2024 to establish the National Green Mobility and Innovation Program (“Programa Mover”) determining sustainability standards for Brazil’s automotive industries, destined to encourage the development of new technologies by offering financial and tax incentives.

Among other issues, Programa Mover establishes mandatory requirements for the sale and import of new vehicles in Brazil concerning energy-environmental, technology and labeling efficiency criteria, including (i) compensatory fines and IPI rate increase (from 1% to 2%) for those who fail to comply with the respective standards and (ii) IPI rate reductions (from 1% to 2% or, for flexible fuel engine, 3%, up to 12/31/2026) for those who meet these standards. The program also determines benefited IPI rates to sustainable vehicles according to energy-environmental, recyclability and carbon footprint standards and Import Tax reduction on the import of auto parts not produced in Brazil, required the importer invests 2% of the customs value of the imported parts in R&D and Innovation projects in priority programs for the automotive sector and its chain in Brazil.

Also, for R&D activities and technological production, Programa Mover determines (i) financial credit of 50% on the expenditure related to R&D and the investment on technological production in Brazil (limited to 5% of the monthly revenue from sales of products and rendering of services), equivalent to CSLL credits to be offset by other federal tax debts or reimbursed in cash; (ii) financial credit equivalent to 12,5% of investment in the production of vehicles and 25% of investment in the production of auto parts, systems and strategic solutions; (iii) financial credit to industrial plant relocation projects, corresponding to the Import Tax on the imported goods destined to the project and of the Corporate Income Tax (IRPJ) and Social Contribution on Net Income (CSLL) on the profit obtained from exports.

Finally, Programa Mover also creates the National Fund for Industrial Development to channel resources into priority industrial, scientific and technological development programs and projects.

This bulletin is for information purposes only and should not be relied upon to obtain legal advice on any of the topics dealt with here. For additional information, please contact the leaders of the Tax team.

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