G/SCM/N/372/BRA  
 
1 July 2021  
(21-5271) Page: 1/11 
Committee on Subsidies and Countervailing Measures  Original: English  
 
SUBSIDIES  
NEW AND FULL NOTIFICATION PURSUANT TO ARTICLE XVI:1 OF  
THE GATT 1994 AND ARTICLE 25 OF THE AGREEMENT ON  
SUBSIDIES  AND COUNTERVAILING MEASURES  
BRAZIL 
The following communication, dated and received on 30 June 2021, is being circulated at the request 
of the delegation of Brazil.  
 
_______________  
 
 
The following notification constitutes Brazil's subsidies notification for the fiscal years 2019 and 2020.  
This notification does not prejudge the nature or legal status of the progr ammes herein under 
GATT  1994 and Articles 1 and 2 of the Agreement on Subsidies and Countervailing Measures (ASCM). 
Data may reflect approximations, estimates or preliminary information. Technical or legal 
inaccuracies may have been inadvertently introduce d in the text in the attempt to make the 
description of the programmes sufficiently illustrative, but also straightforward and concise. For 
transparency purposes, Brazil may have included certain programmes that arguably are not specific 
within the meaning  of the ASCM and/or are not covered by that Agreement.  
Table of Contents  
1   INDUSTRIAL INCENTIVES  ................................ ................................ ..........................  2 
1.1   Capacity Building and Competitiveness Enhancement in Information and Communication 
Technology  ................................ ................................ ................................ .......................  2 
1.2   Productive Development Policy  ................................ ................................ .....................  3 
1.3   Rota 2030 Programme – Mobility and Logistics  ................................ ...............................  4 
1.4   Reporto - Tax Regime to Encourage Modernization and Expansion of Port Structure  ............  5 
2   REGIONAL INCENTIVES ................................ ................................ ..............................  6 
2.1   Amazon Development Authority and Northeast Region Development Authority  ...................  6 
2.2   Regional Development and Promotion of R&D and Technological Innovation Programme  ..... 8 
3   FISHERIES INCENTIVES  ................................ ................................ .............................  9 
3.1   Diesel Oil Price Equalization Scheme  ................................ ................................ .............  9 
3.2   Programme for Vessel Fleet Enlargement and Modernization  ................................ ..........  10 
  G/SCM/N/372/BRA  
 
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1  INDUSTRIAL INCENTIVES  
1.1  Capacity Building and Competitiveness Enhancement in Information and 
Communication Technology  
1. Title of the programme  
Capacity building and competitiveness enhancemen t in Information and Communication Technology 
and related fields.  
2. Period covered by the notification  
From January 2019 to December 2020.  
3. Policy objective and/or purpose  
To encourage manufacturers of information and communication technology goods to invest in 
research and development activities (R&D), create new products and improve the country's 
competitiveness.  
4. Legislation and authority  
Law 8248/91, as amended by Law 10.176/01, by Law 11077/04, by Law 13674/18 and by 
Law 13969/19.  
Within their respective a rea of responsibility, the Ministry of Economy and the Ministry of Science, 
Technology and Innovation manage the provision of incentives such as financial credit proportional 
to the investment in R&D carried out by the company and the follow up offered to the counterparts, 
such as research and execution of development programmes.  
5. Form of subsidy  
Qualifying companies will be granted an amount of financial credits calculated on determined 
investments made in research, development, and innovation activities. To qualify for this 
programme, companies must invest at least 4% of their turnover from product sales (after deduction 
of other indirect taxes) in research, development and innovation activities and they must carry out 
business in Brazil accord ing to a pre -approved plan.  
6. To whom and how the subsidy is provided  
Industrial manufacturers of information and communication technology goods, by the means of 
financial credits provided by the Federal Government.  
7. Total amount  
Fiscal Year 2019 : R$ 5 ,836.72 million;  
Fiscal Year 2020: R$ 5 ,500.00 million.*  
*Estimated value . 
8. Duration  
The programme will be phased out by 2029.  
9. Trade effects  
N.A. G/SCM/N/372/BRA  
 
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1.2  Productive Development Policy  
1. Title of Programme  
Productive Development Policy  
2. Period covered by the notification  
From January 2019 to December 2020.  
3. Policy objective and/or purpose  
Support for shipbuilding, vessels maintenance and aircraft maintenance industries.  
4. Legislation and authority  
Law 8.032/90, art. 2º, II, "j"; Law 8.402/92, art. 1., IV; Law 9.432/97, art. 11; L aw 11.774/08, 
art. 15; MP 2.158 -35/01, art. 14, VI and § 1; Law 10.865/04, art. 8, § 12, I, VI and VII, art. 28, 
IV and X.  
The Ministry of Economy is responsible for the inspection of the tax incentives and the Ministry of 
Defense is responsible for the Br azilian Special Register (REB).  
5. Form of subsidy  
a. Exemption of tax levied on the importation of parts and components intended for repair, 
overhaul and maintenance of vessels and aircraft. Exemption of Import Tax - II and IPI 
levied on the importation of part s and components intended for employment in the 
construction, conservation, modernization, conversion or repair of vessels registered in 
the REB, provided that they are carried out in Brazilian shipyards.  
b. Exemption of the contribution for the PIS/ Pasep and Cofins on the revenue obtained by 
Brazilian shipyards in the activities of construction, conservation, modernization, 
conversion or repair of vessels pre -registered or registered in the REB. Reduction to zero 
of the rates of contribution to the c ontribution for the PIS/Pasep and Cofins levied on the 
gross revenue from sales in the domestic market or the importation of materials and 
equipment, parts and components, employed in the construction, maintenance, 
modernization and conversion of vessels r egistered or pre -registered in the REB.  
Reduction to zero of the contribution for the PIS/Pasep and Cofins tax rates on the sale or 
importation of aircraft classified under heading 88.02 of Tipi, its parts, tools, components, 
supplies, hydraulic fluids, pa ints, anti -corrosives, lubricants, equipment, services and raw 
materials to be used in the maintenance, conservation, modernization, repair, overhaul, 
conversion and industrialization of aircraft, their engines, parts, components, tools and 
equipment.  
6. To whom and how the subsidy is provided  
Exemptions of II and IPI of item 5 (a) are directed to national shipyards, airlines and aeronautical 
maintenance enterprises.  
The exemption and reduction of indirect taxes referring to the contribution for the PIS/Pasep and 
Cofins mentioned in 5(b) is granted to shipyards that execute the activities of building, conservation, 
modernization, conversion or repair of vessels registered in the REB.  
The reduction to zero of the contribution for the PIS/Pasep and Cofins rates o f item 5 (b) is objective 
and applies to acquisitions and imports of the goods mentioned.  G/SCM/N/372/BRA  
 
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7. Total amount*  
Fiscal year 2019 : R$ 3,553.08 million;  
Fiscal year 2020: R$  3,621 .10 million.  
*Estimated values . 
8. Duration  
There is no pre -established time limit for the programme's termination.  
9. Trade effects  
N.A. 
1.3  Rota 2030 Programme – Mobility and Logistics  
1. Title of programme  
Rota 2030 Programme - Mobility and Logistics.  
2. Period covered by the notification  
From January 2019 to December 2020.  
3. Policy objective and/or pur pose 
To foster the technological development of the domestic automotive industry, including with regard 
to energy efficiency and environmental sustainability, by creating incentives for R&D activities 
nationally.  
4. Legislation and authority  
Law 13,755/18.  
The Ministry of Economy is responsible for formulating, managing and monitoring the 
Rota 2030 Programme. Some responsibilities are shared with other Ministries and federal agencies, 
such as the Ministry of Science, Technology and Innovations, the National Institute of Metrology, 
Quality and Technology - INMETRO, the Brazilian Institute of Environment and Renewable Natural 
Resources - IBAMA, among others.  
5. Form of subsidy  
Fiscal incentives based on the volume of R&D expenditures made in Brazil.  
6. To whom and ho w the subsidy is provided  
The subsidy is directed to companies that manufacture vehicles and their parts and pieces and is 
granted by the means of a reduction in the calculation basis of the Corporate Income Tax (IRPJ) and 
the Social Contribution on Net Pr ofit (CSLL).  
7. Total amount*  
Fiscal Year 2019: R $ 255 ,852,403.46; 
Fiscal Year 2020: R$ 244 ,671,653.43. 
*Estimated values . G/SCM/N/372/BRA  
 
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8. Duration  
From December 2018 to December 2023.  
9. Trade effects  
N.A. 
1.4  Reporto - Tax Regime to Encourage Modernization and Expansion of Port S tructure  
1. Title of Programme  
Reporto.  
2. Period covered by the notification  
From January 2019 to December 2020.  
3. Policy objective and/or purpose  
Modernization and expansion of port structure.  
4. Legislation and authority  
Law 11.033/04, arts. 13 to 15 and Decree 6. 582/08.  
The Ministry of Economy is responsible for the inspection of the tax incentives.  
5. Form of subsidy  
Suspension and subsequent exemption of II, IPI and the contribution for the PIS/Pasep and Cofins  
on imports, and of IPI and the contribution for the PIS/Pasep and Cofins on domestic purchases of 
machinery, equipment, spare parts and other goods imported by Reporto beneficiaries and destined 
to their fixed assets for exclusive use in the execution of the following services: loading, unloading, 
storage and handling of goods and products; supplementary operational support systems; 
environmental protection; security systems and monitoring of the flow of people, goods, products, 
vehicles and vessels; dredg ing; and training of workers, including the implementation of 
Professional  Training Centers.  
6. To whom and how the subsidy is provided  
Beneficiaries of Reporto are the port operator, the port concessionaire, the tenant of a public port 
facility and the compa ny authorized to operate a mixed or exclusive private port facility, including 
those operating with offshore vessels, railroad concessionaries, dredging companies, secondary zone 
customs office and Professional Training Centers.  
7. Total amount*  
Fiscal Year 2 019: R$ 184,966,686;  
Fiscal Year 2020: R$ 188,087,048.  
*Estimated values.  
8. Duration  
Expired on 31 December 2020.  G/SCM/N/372/BRA  
 
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9. Trade effects  
N.A. 
2  REGIONAL INCENTIVES  
2.1  Amazon Development Authority and Northeast Region Development Authority  
1. Title of programme  
Amazon Develop ment Authority (SUDAM) and Northeast Region Development Authority (SUDENE).  
2. Period covered by the notification  
From January 2019 to December 2020.  
3. Policy objective and/or purpose  
SUDAM and SUDENE programmes provide assistance to the economically disadvanta ged Amazon 
and Northeast regions (this latter includes the Northern regions of the States of Espírito Santo and 
Minas Gerais), by means of income tax reductions.  
The purpose of SUDAM and SUDENE is to reduce economic and social imbalances between the 
Brazil ian regions by means of compensatory mechanisms for the sustainable development and 
competitive integration in the national economy of the North and Northeast Regions.1 
The area covered by SUDAM is denominated "Legal Amazonia", or the Amazon Region, 
encompassing the States of Acre, Amapá, Amazonas, Mato Grosso, Pará, Rondônia, Roraima, 
Tocantins, and part of the State of Maranhão. The Amazon Region is an area of continent al 
dimensions covering 5,046,143 square kilometers and corresponding to 59% of Brazil's territory and 
approximately 70% of the so -called Pan -Amazon or Continental Amazon, which has a population of 
approximately 22 million inhabitants heavily concentrated i n urban areas and scattered widely across 
a vast rural area.  
4. Legislation and authority  
SUDAM was established by Law 5174/66. SUDENE was established by Law 3692/59. 
Provisional  Measures 2156 -5 and 2157 -5, of August 2001, extinguished both authorities and th e 
programmes they administered. The same Provisional Measures replaced those authorities by 
"Agência do Desenvolvimento da Amazônia" (ADA) and "Agência do Desenvolvimento do Nordeste" 
(ADENE). On 3 January 2007, ADA and ADENE were extinguished by Supplemen tary Laws 124/07 
and 125/07, respectively, being replaced by SUDAM and SUDENE. The changes introduced by 
Supplementary Laws 124/07 and 125/07 relate mainly to the legal structure and legal nature of 
those authorities.  
Both programmes are under the responsi bility of SUDAM and SUDENE, as established by 
Supplementary Law 124/07 and Supplementary Law 125/07. Law 9532/97 regulates the tax 
exemptions and reductions. Provisional Measure 2199/01, as amended by Law 11196/05 and by 
Law 13799/19, is the most recent re gulation on the matter.  
 
1 The Constitution of Brazil, in its article 3, item III of Title I, regarding the Fundamental Principles,  considers that "the 
fundamental objectives of the Federative Republic of Brazil are to eradicate poverty and  substandard living conditions and to reduc e 
social and regional inequalities". In Section IV (article 43,  paragraph 2, item III) of Chapter VII, Title III, which refers to the 
Organization of the State considers that "the  regional incentives shall include, among others, as prescribed by law, exemp tions, 
reductions or temporary  deferment of federal taxes owed by individuals or by legal entities". In article 151, item I, Section II of Title VI,  
regarding Taxation and Budget considers that "it is forbidden for the Union: to institute a tax which is no t uniform  throughout  the entire 
national  territory  (...), it being  allowed  to grant  tax incentives  for the purposes  of promoting the balanced social and economic 
development of the various regions of the country". In article Â  165, paragraphs 6 and 7, Section Â II of Chapter II, Public Finances, of 
the previous Title, considers that "the  budget bill shall be accompanied by a regionalized statement on the effect on revenues and 
expenses, deriving  from exemptions, forgiveness,  remissions,  subsidies  and benefits  of a financial,  tributary  and credit  nature  (Â§Â 6). 
The budget set forth (...) in consistence with the pluriannual plan, shall include the functions of  reducing  interregional inequalities, 
according  to population criteria (Â§  7)". G/SCM/N/372/BRA  
 
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5. Form of subsidy  
Income tax reductions.2 
6. To whom and how the subsidy is provided  
The program is directed to industrial and agricultural enterprises with undertakings in the Amazon 
Region, the Northeast Region and the Northern region  of the States of Espírito Santo and Minas 
Gerais.  
The incentives administered by SUDAM and SUDENE are directed to the legal entities that apply for 
the implementation, modernization, expansion, or diversification of enterprises, registered and 
approved un til 12/31/2023, with a 75% (seventy -five percent) reduction or exemption of the 
Corporate Income Tax (IRPJ), including non -refundable additionals, for a period of 10 (ten) years, 
as well as the reduction of the reinvestment of 30% of the IRPJ, by the means  of a deposit made on 
the same date as the collection of the IRPJ, at Banco do Nordeste S.A. and Banco Amazônia S.A. 
branches.  
These resources may be used by the companies operating in the regions of operation of SUDAM and 
SUDENE for modernization, impleme ntation, expansion and diversification of their production lines.  
Exclusively for the right to exemption from the IRPJ, the activities of the enterprise shall be limited 
to the manufacturing of machines, equipment, instruments, and devices, based on digita l 
technology, in the context of the Federal Government's digital inclusion program.  
The production unit that is the object of the incentive must be located and operating in the SUDAM 
or SUDENE area. The activities of the enterprise object of the incentive must belong to the sectors 
of the economy considered priorities for regional development, as defined in specific legislation.  
The legal entity that owns the enterprise must opt for taxation based on the real profit.  
7. Total amount*  
SUDAM:  
Fiscal year 2019: R $ 4,256.58 million;  
Fiscal year 2020: R$  4,214.96 million.  
SUDENE:  
Fiscal year 2019: R$  6,359 .77 million;  
Fiscal year 2020: R$  6,482.30 million.  
*Estimated values  
8. Duration  
Companies are allowed to  submit projects until 31 December 2023. The income tax reduction is 
terminated after 10 years from the date on which the industry started its operation.  
9. Trade effects  
N.A. 
 
2 Companies which submitted the project until 14 November 1997 and which were granted income tax  exemption  will be entitled  
to such exemption until  the date specified in the  act of concession.  G/SCM/N/372/BRA  
 
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2.2  Regional Development and Promotion of R&D and Technological Innovation 
Programme  
1. Title of programme  
Regional Development and Promotion of Research and Development and Technological Innovation 
Programme.  
2. Period covered by the notification  
From January 2019 to December 2020.  
3. Policy objective and/or purpose  
To reduce economic and social imb alances between Brazilian regions by means of compensatory 
mechanisms for the development of the North, Northeast and Midwest regions and to promote 
investment in research, development and technological innovation in the North, Northeast and 
Midwest region s. For the purpose of the programme, the Midwest region does not comprise the 
Federal District.  
4. Legislation and authority  
Law 9.826/1999, amended by Law 12.973/2014 and by Law 14.076/20, and Law 9.440/97, 
amended by Laws 12.407/11 and 13.755/2018.  
The Mini stry of Economy is responsible for determining the requirements for the submission and 
approval of projects and for the evaluation, approval and monitoring of the programme. The Ministry 
of Science, Technology and Innovation is responsible for verifying th e proof of investment in research 
and development and technological innovation in the regions covered by the programme.  
5. Form of subsidy  
Tax reduction.  
6. To whom and how the subsidy is provided  
Under Law 9.826/99, industrial enterprises in the North, Northeas t and Midwest regions are entitled 
to a reduction of 32% of IPI levied on sales of products classified under codes 8702 to 8704 of the 
Table of Incidence of IPI. The reduction is applied on products produced in the domestic market or 
directly imported.  
Under Law 9.440/97, industrial enterprises in the North, Northeast and Midwest regions are entitled 
to IPI reduction. Companies shall invest, at least, 10% of the value corresponding to IPI reduction 
in research and development and technological innovation in  the regions covered by the programme.  
7. Total amount*  
Fiscal Year 2019 : R$ 4,553.11 million;  
Fiscal Year 2020: R$ 3,516.87 million . 
*Estimated values  
8. Duration  
Expiration is scheduled for December 2025.  
9. Trade effects  
N.A. G/SCM/N/372/BRA  
 
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3  FISHERIES INCENTIVES  
3.1  Diesel Oil Price Equalization Scheme  
1. Title of programme  
Programme for Economic Subvention to the Price of Diesel Oil Used by Fishing Vessels.  
2. Period covered by the notification  
From January 2019 to December 2020.  
3. Policy objective and/or purpose  
The main objective of the programme is to equalize the domestic price of maritime diesel paid by 
fishing companies or fishermen with the international market price.  
4. Legislation and authority  
The programme was established by Law No. 9.445/97 and regulated by Decree No. 7.077/10.  
Law 13.844/19 establishes that the Ministry of Agriculture, Livestock and Food Supply is responsible 
for operationalizing the concession of the subvention, which, according to Decree 10.253/20, is 
accomplished by its Secretariat of Aquaculture and Fisheri es. 
In order to qualify for the equalization scheme, the fishing companies or fishermen must comply 
with administrative procedures set by regulation of the Ministry of Agriculture, Livestock and Food 
Supply, which take into account vessel control and other  administrative issues.  
5. Form of subsidy  
Reimbursement of the difference between the price of maritime diesel in Brazil and that of 
international markets. This equalization payment, however, is limited to 25% of the price of maritime 
diesel at the refinery level.  
6. To whom and how the subsidy is provided  
Recipients are fishing vessel owners or charters (natural or legal persons); professional fishermen 
and fishing industries.  
In operational terms, the recipients pay the regular national price of maritime diese l (with the tax 
exemption of the ICMS), and, subsequently, the Ministry of Agriculture, Livestock and Food Supply 
reimburses to the recipients the difference between the price paid and the international market price, 
up to the limit of 25% of the maritime diesel price at the refinery level.  
At the end of each fiscal year, a public regulation issued by the Ministry of Agriculture, Livestock and 
Food Supply establishes the recipients (company, cooperative, association or fishermen), by State 
level (regional),  and the maximum amount of the reimbursement that will be available in the 
following year for each of them.  
7. Total amount  
Fiscal Year 2019: R$ 0;  
Fiscal Year 2020: R$ 120,137.49.  
8. Duration  
Not defined.  G/SCM/N/372/BRA  
 
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9. Trade effects  
N.A. 
3.2  Programme for Vessel Fleet Enlargement and Modernization  
1. Title of programme  
National Programme for Financing the Enlargement and Modernization of the National Fishing Fleet  – 
PROFROTA Pesqueira.  
2. Period covered by the notification  
From January 2019 to December 2020.  
3. Policy objective and/or purpose  
Construction, acquisition and improvements of fishing vessels in order to enhance the ocean fishing 
fleet, taking into consideration environmental criteria of sustainability (including management of 
fishing activities).  
Replace ment of coastal and continental fleet fishing vessels with the objective of renewing them, 
taking into consideration environmental criteria of sustainability (including management of fishing 
effort).  
Modernization, conversion, equipping and adaptation of f ishing vessels to enhance the management 
control on fishing activities, taking into consideration environmental criteria of sustainability.  
4. Legislation and authority  
The programme was established by Law No. 10.849/04 and regulated by Decree No. 5.474/05 an d 
Decree No. 6.746/09.  
The Ministry of Agriculture, Livestock and Food Supply, through its Secretariat of Aquaculture and 
Fisheries, is responsible for the administration of the programme. In order to participate in this 
Programme, the recipients must comp ly with administrative procedures set by regulation of the 
Ministry of Agriculture, Livestock and Food Supply. This Ministry conducts the technical assessment 
of the projects.  
The program is financed with resources from the Merchant Marine Fund - FMM and t he Constitutional  
Funds for Financing the North - FNO and the Northeast - FNE. The FMM is subordinated to the 
Ministry of Infrastructure, the FNO to the Banco da Amazônia and the FNE is linked to 
Banco  do Nordeste.  
5. Form of subsidy  
A "non -default" bonus ("p aid-on time" installment performance bonus) calculated on the interest 
due of the financed amount, taking into consideration environmental, social and targeted species 
stimulus issues.  
This performance bonus can be granted to the loan taker, in a non -cumul ative way, to be calculated 
only on the interest amount of the loan. It is only granted when the installment of the loan is paid 
on time and taking into consideration sustainability criteria and improvements in the working 
conditions for the workers in the  vessel.  
The bonuses can be of 5%, 20% and 30%.  G/SCM/N/372/BRA  
 
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6. To whom and how the subsidy is provided  
Recipients are fishing vessel owners or charters (natural or legal persons); professional fishermen 
and fishing industries; industrial fishing companies (natural or leg al persons and cooperatives 
dedicated to fishing activities).  
The bonus is granted only when the installment of the loan is paid on time and sustainability criteria 
and improvements in the working conditions for the workers in the vessel are met. In operat ional 
terms, it generates a discount in the interest payment to be made on that installment.  
7. Total amount  
Fiscal Year 2019: R$ 0.00;  
Fiscal Year 2020: R$ 0.00.  
8. Duration  
Not defined.  
9. Trade effects  
N.A. 
 
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