Decree n. 9.904 reduces tax rate on service exporters

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Decree n. 9,904, signed by the Brazilian President on July 8, 2019, provides for the reduction to zero of the income tax rate on commissions paid by exporters to their agents abroad. As a result, Brazil is expected to increase its competitiveness in the export segment.

The zero rate falls on payments made with the purpose of hiring agents abroad, who act in the intermediation of transactions between the Brazilian company and its foreign clients, as well as on the issuance of documents carried out outside Brazil.

The reduction of the rate to zero was already established by Decree n. 6,761/2009, which provides for taxation related to amounts paid, credited, delivered, employed or remitted to residents or persons domiciled abroad, related to expenses with market research, rental and leasing of stands and places for exhibitions, fairs and similar activities abroad, including promotion and advertisement, within the scope of these events, of Brazilian products and services, as well as the promotion of Brazilian tourist destinations or the contracting of services destined to the promotion of Brazil abroad.

With the introduction of Decree n. 9.904/2019,  it is established that these operations are to be registered in systems maintained by the Ministry of Economy, such as Siscoserv, which will establish complementary rules for this purpose, and registration on the Sisprom website is not necessary.

According to the Ministry of Economy, it is estimated that 12,000 service exporters can benefit from the zero income tax rate.

If your business needs assistance with adapting to the new rule, please contact our team via email – info@drummondadvisors.com