The Brazilian Chamber of Deputies has passed a Senate bill that will validate most state-government tax incentive programs offered to businesses for periods of up to 15 years. The legislation is considered critical for creating greater ease of doing business in Brazil since it eliminates vexing legal doubts about state-run tax incentives. Brazilian courts have tended to strike down incentive programs unless approved unanimously by the nation’s 26 states and the Federal District through an entity known as CONFAZ, which represents the 27 state and district finance secretariats. This week’s legislation, PLP 24/2015, specifically permits tax incentive programs outside of the CONFAZ framework to continue for periods ranging from one year to 15 years. Businesses in areas of agriculture, industry and most infrastructure sectors will be eligible for the full 15-year extension o f tax incentives. The Chamber of Deputies voted by a massive 405-28 margin in favor of the bill. Last minute negotiations eliminated a provision which would have gradually reduced incentives over 15 years. Instead, the Chamber decided to allow full incentives to continue for the entire 15-year period. The bill will now return to the Senate, which must vote on minor amendments adopted by the lower house of Congress.
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