Angelo Ambrizzi
Lawyer at Marcos Martins Advogados
Taxation on consumption in Brazil is known to be one of the highest in the world, which inflates the prices of a wide variety of products and hampers the development of industry and commerce. The plastics sector is no different.
In addition to facing macroeconomic challenges, such as global inflation, rising interest rates and recession in general, the segment has to deal with a variety of taxes levied on sales and the excessive tax bureaucracy that exists in the country.
The reduction in IPI rates implemented by the Federal Government, which initially caused a general cheer in the industry, has been suspended by the Federal Supreme Court, in an action aimed at protecting the interests of companies based in the Manaus Free Trade Zone.
The decision, in addition to generating a number of doubts in the sector due to the practical difficulty of implementation, because there is no official list of products produced in the Free Trade Zone, caused a considerable increase in taxation.
Recently, the Brazilian Plastics Industry Association (Abiplast) sent a letter to the STF asking for the suspension of the IPI reduction to be reconsidered, but so far there is no deadline set for a definitive judgment on the issue. Against this backdrop, it is essential that entrepreneurs reassess all the tax implications of their operations.
The complexity of taxation in Brazil opens the door to judicial or administrative challenges over certain taxes, a review of the tax burden through special regimes or even the operating model adopted by the company, among other measures that can ease the tax burden and increase competitiveness.
The analysis and strategic review of the taxes levied on the taxpayer’s operations, from the credits taken for ICMS, PIS/COFINS, IPI, payroll taxes and the calculation of taxes levied on sales operations, plays an extremely important role in building competitive advantage.
A lack of fiscal intelligence means an excessive increase in the tax burden and a flattening of the entrepreneur’s margin. In this context, it is of the utmost importance to have specialized advice, attentive to legislative changes and judicial/administrative decisions, in order to achieve a level of tax burden that suits the taxpayer’s financial planning.
Angelo Ambrizzi is a lawyer specializing in Tax Law from IBET, APET and FGV, with an Extension in Finance from Saint Paul and in Turnaround from Insper and Head of the Tax area at Marcos Martins Advogados.
About Marcos Martins Advogados:
Founded in 1983, Marcos Martins Advogados is highly regarded in the areas of Corporate, Tax, Labor and Business Law. Based on values such as commitment, ethics, integrity, transparency, responsibility and the constant specialization and improvement of its professionals, the firm positions itself as a true partner for its clients.
