The program stipulates rules that aim to improve fuel consumption (“energy efficiency”) and safety – with specifications defined by the National Traffic Council – (“CONTRAN”) – and also offers, initially for a period of 05 (five) years, tax discounts to companies that invest, in Brazil, in technological innovation projects and research.
Despite some controversial points, Rota 2030 brings good news to the Northeast (where Ford and Fiat Chrysler are located) and North (where BMW, Harley-Davidson, Honda and Yamaha are located), as the regional incentive program, which was scheduled to last until 2020, has been extended to 2025. Manufacturers in the Central-West region who meet the beneficiary requirements and present projects for the development of new products (or new models of existing products) will be entitled to presumed IPI credits as relative reimbursement of the PIS and COFINS contributions levied on sales made between 2021 and 2025.
According to article 10, companies that may qualify for the Rota 2030 Program are those that: (i) are in good standing with regard to federal taxes; and (ii) prove that they are formally authorized to (ii.i) carry out, within the national territory, the activities of providing technical assistance services and organizing a distribution network and (ii.ii) use the manufacturer's brands in relation to the vehicles subject to import.
In general, qualified companies may deduct from the Corporate Income Tax (IRPJ) and Social Contribution on Net Profit (CSLL) due the amount corresponding to the application of the IRPJ rate and additional rate and the CSLL rate on up to 30% (thirty percent) of the expenditures made in the country, in the assessment period itself, provided that they are classifiable as operating expenses under IRPJ legislation and applied to research and technological development.
Rota 2030 aims to make the domestic market more competitive, as most technological innovations are currently imported rather than developed domestically. The automotive sector plays a significant role in the global industrial structure and, in Brazil, accounts for approximately 22% of industrial GDP.
