Result of the conversion of MP 960, adopted to reduce pandemic impacts, legislation applies to the suspension and exemption regimes.

Law no. 14.060 was sanctioned on Friday, which extends the terms of the suspension and exemption drawback regimes for one year, informed the Ministry of Economy. The law is the result of the conversion of Provisional Measure (MP) 960, of May 4, adopted to reduce the impacts of covid-19 on the Brazilian economy.

Drawback regimes seek to make Brazilian products more competitive by relieving taxes on imports and local purchases of inputs for the production of goods destined for the foreign market.

Last year, US $ 49.1 billion were exported using drawback, according to data from the Foreign Trade Secretariat (Secex). The value represents 21.8% of Brazil's total foreign sales in the period.
According to the Ministry of Economy, the original text of MP 960 extended the deadlines only for the suspension drawback. However, the law extended the benefit to the exemption regime.
As a result, companies gained more time to carry out imports authorized under this regime and which have a deadline to be completed. It was estimated that, in a scenario of declining activity and lower revenues, the purchase of inputs in the authorized quantities could cause cash difficulties for exporters.
In the exemption drawback, the company exports and, with that, gains the right to purchase inputs without taxes to eventually use in a future export.
According to data from Secex, there are 325 concessionary drawback exemption acts due this year and authorized input replacements in the order of US $ 942.3 million. Of these, US $ 424.9 million, or about 45% of the total, refer to operations that, with the new law, may be concluded in 2021.

Por Lu Aiko Otta, Valor

Source: https://valor.globo.com/brasil/noticia/2020/09/25/sancionada-lei-que-prorroga-prazos-do-drawback-por-um-ano.ghtml