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Brazil Introduces Tax Breaks To Boost Internet Access

by Mike Godfrey, Tax-News.com, Washington

25 February 2013


The Brazilian Government has approved new tax breaks to encourage investment in the nation's Internet infrastructure as the country prepares to host the world's two largest sporting events in 2014 and 2016, the FIFA World Cup and the Olympics.

Companies wishing to secure the tax breaks must submit investment plans by June 30, 2013, outlining proposed improvements to their 3G and 4G networks to improve mobile access to the Internet.

The breaks, detailed in Decree 7291, provide for an exemption to PIS/COFINS taxes (social security levies) and to industrial profits tax, known as IPI. The concessions will not only benefit telecoms providers but also those firms providing the equipment and necessary hardware and software infrastructure to facilitate the improvements. It is estimated that in total the tax breaks will be worth BRL9bn (USD4.5bn) by 2016.

In order to be eligible for the tax breaks, companies must complete their proposed projects by the end of 2016, and domestically source at least 50% of the technologies and components they intend to use.

TAGS: tax | social security | Brazil | tax breaks | telecoms

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