Auto industry tries to overturn tax assessments

Companies in the automotive industry are awaiting Federal Revenue’s millionaire tax assessments. According to tax assessment notifications, no Import Taxes, known as II taxes, have been paid on import operations of auto components from Paraguay over the last five years, also affecting the Tax on Industrialized Products (IPI).

A new tax issue will arise in the Judiciary, depending on the outcome of the administrative negotiations. Paraguay is Brazil’s 15th largest supplier of auto parts. Last year, the country imported BRL 178,196,074 worth of car components, up 21.9 % from 2020, when it imported BRL 146,221,729 in auto parts.

The imbroglio began in 2019 when the Federal Revenue demanded the collection of the II tax and payment of the IPI difference on imported auto parts. Because the Import Tax is a part of the IPI calculation basis, it has an impact on the IPI.

Since the creation of Mercosur in 1991, customs barriers between the countries have been removed, and different tax treatment given to companies within the bloc. For this, the Economic Complementation Agreement (ACE) No. 18 was signed in 1992, which provided for a zero rate of Import Tax in trade between these countries and exceptions for the benefit.

“No guideline exempts the taxation of any imported items from the automotive industry from Paraguay,” comments lawyer Andréa Mascitto from Pinheiro Neto Advogados.

Thus, despite the absence of a specific agreement with Paraguay, taxpayers used agreements signed with Uruguay and Argentina (ACE nº 2 and 4, respectively) and the Mercosur rules themselves to obtain the tax benefit.

“Companies were able to import using the tariff rules of these agreements from 1992 and 2019.” But, according to lawyer Guilherme Mendes of Stocche Forbes Advogados, a Siscomex News [Integrated Foreign Trade System] published in 2019 stated that “imports from the automotive sector in Mercosur only have preferential treatment with Argentina and Uruguay.”

Source: Valor Econômico

To read the full original article please visit the link:

https://valor.globo.com/legislacao/noticia/2022/02/14/setor-automotivo-tenta-derrubar-autuacoes-fiscais.ghtml

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