Everything you need to know about Reintegra

Reintegra is an important program that encourages export companies to reimburse some taxes paid during the production chain. This practice had its first seed planted in the 1960s, however, after an interruption in the 1980s, it was resumed as a provisional measure in 2011 and solidified as a law in 2014.

To better understand Reintegra’s impacts on companies in the industry, we explain in what cases it applies, how the program works and what are the ways to request tax refunds – which can be used to reduce debts with the IRS, for example . We invite José Augusto de Castro, president of the Brazilian Foreign Trade Association (AEB), to help us better understand this law.

Read on to find out more about Reintegra and its potential impact on foreign trade. Check out!

Reintegra

Reintegra’s origins date back more than 50 years. In 1969, the Federal Government initiated a plan to stimulate the export of manufactured products. At the time, the program was called Export Credit Award, which represented up to 23% of the value exported by companies in manufactured products. “This was a benefit granted to entrepreneurs to make the product much more competitive,” explains Castro.

In 1985, the measure was considered illegal, forcing the government to cancel the benefit. It was only in 2014 – after it was originally recreated as a provisional measure, in the year 2011 – that the idea succeeded again. With the name of Special Regime of Reintegration of Tax Values ​​for Exporting Companies (or Reintegra, as it is more commonly called), the program was converted into law. Just as supplementary information, this benefit is applied in China with the name of Rebate and in Argentina of Reintegro, in rates that reach up to 16%.

With Law 13,043 / 2014 approved, the tax refund of taxes that are paid throughout the entire production chain of a given asset was regulated, until the moment it is exported abroad in a commercial transaction. Essentially, companies receive back the amount paid in the main taxes on this economic activity.

Among the main taxes that are returned are:

• Social Integration Program (PIS);
• Contribution to Social Security Financing (COFINS);
• Withholding Income Tax (IRRF);
• Tax on industrialized products (IPI).

In addition to these, taxes that have already been collected and ceased to exist, such as the Provisional Contribution on Financial Transactions (CPMF), were also refunded to exporters.

Companies covered by Law 13,043 / 2014

All companies that work with the export of products can have the tax refund by Reintegra, as long as certain prerequisites are met:

the item must be produced in the national territory, which includes industrialization processes ranging from processing to assembly, including renovation, reconditioning and / or transformation;

product must be included in the Industrialized Product Tax (TIPI) Incidence Table;

the inputs used to manufacture the product that are imported cannot have a cost higher than the percentage limit of the export value of the good;

inputs that come from other Mercosur countries are considered national, for all purposes. In addition, the cost of the inputs corresponds to its customs value, to which is added the import tax and the Additional Freight for Renewal of Merchant Marine (AFRMM);

the cost of an imported input, if it comes from a foreign company, is considered equal to the final cost of the importing manufacturer. Its export price is defined at the place of shipment.

The operation

In order to request the request for the return of tax amounts within Reintegra, it is necessary to make available to the Federal Government all records regarding the export operation. This includes invoices compatible with exports carried out in the period – the program only refunds the values ​​of items sent out of the country commercially in the previous five years. The legislation that created Reintegra established its rate at 3%, but currently it is only 0.1%.

The reimbursement can be requested right after the end of the quarter in which the export took place and can be carried out by means of a credit in a current account or, still, as a way of reducing any debts that the company has with the Federal Revenue.

Reintegra redemption requests

Exporters who wish to participate in Reintegra must pay attention to certain points, such as the Mercosur Common Nomenclature (NCM), a mandatory code in this type of merchandise. If the data is wrong or is considered irregular, the request may be blocked by the IRS.

It is also advisable to request a refund as soon as possible to avoid losses, as Reintegra does not offer monetary restatement. For those who prefer to obtain reimbursement through credits to be used to pay debts with the Federal Government, care is even more important, since this type of debt has an interest rate. In this case, it is necessary to inform the desire for credits in the Declaration of Federal Tax Debts and Credits (DCTF).

For the president of AEB, however, there are still some challenges for Reintegra to be more effective in the daily lives of exporting companies. This is because, according to Castro, there is room in the legislation to raise the rate to 5%.

Such a modification would represent a great help for companies to recover more significant values ​​and make exports of manufactured products more competitive, which would have a positive impact on the Brazilian economy by generating more jobs. The establishment and compliance with shorter deadlines for receiving the amounts is also a point of improvement, in the manager’s view.

Similar measures to Reintegra exist in several countries. “It is a mechanism that the world adopts. So, we have to change the operational rules so that we can make the manufactured product more competitive,” believes Castro. “We could export more to the United States and more to the European Union, which are the major world markets”, adds the president of AEB.

Throughout the article, we seek to explain how Reintegra works, what its benefits are and how the program can impact the business of Brazilian exporters. By recovering part of the amounts paid in taxes and duties, companies have the potential to become more profitable and, thus, achieve better results and stimulate the Brazilian economy.

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