Income Tax Reduction for Brazilian Companies Promoting Abroad
In order for company services or products to establish themselves in foreign markets, it is necessary that the products or services be known outside Brazil, thus the importance of international promotion of Brazilian companies. Let us take a look at how this is encouraged by the Brazilian government.
International Promotion
International fairs, exhibitions and other promotional activities of services and intangible assets outside Brazil are the best opportunities for presenting what a company has to offer and to conquer new markets. The Ministry of Foreign Affairs offers an online tool for searching fairs abroad.
This tool can be accessed via this link, where it is possible to sort international events by organizer, country where it is held, business area, name, date and whether Brazilian presence is supported by the Ministry of Foreign Affairs.
Apex-Brasil, the Brazilian Trade and Investment Promotion Agency, also has an international events calendar, which can be accessed here. The agency develops special programs for different sectors of Brazilian industry, helping to promote specific sector’s goods and services abroad. Among all the sectors supported by Apex-Brasil, the following ones can be cited:
- Organic food, with the Organics Brasil program
- Pet products, with the Pet Brasil program
- Footwear, with the Brazilian Footwear program
- Sweets, with the Sweets Brazil program
For those sectors that develop export promotion programs, the respective representative associations will also hold international events calendars, such as Abicab for the sweets industry.
Trips abroad are also another modality used for the promotion of services in foreign markets. Personal contact with possible clients is useful for researching markets, observing competition, searching for representatives and promoting sales.
Incentive for Foreign Promotion
Brazil developed a series of programs granting tax incentives for Brazilian exporters in order to boost certain sectors’ exports. This was done also as a way of increasing the competitivity of certain sectors of Brazilian industry, since they would start to compete with foreign brands.
Among these, Brazil offers a special tax incentive for international promotion of Brazilian companies.
SISPROM
Brazil’s Secretariat of Foreign Trade - SECEX - along with MDIC - Ministry of Development, Industry and Foreign Trade - developed SISPROM in order to foster international promotion of Brazilian companies. SISPROM stands for Sistema de Registro de Informações de Promoção, which is Portuguese for Promotion Information Record System and will record expenses by companies, associations and similar entities that are promoting their services outside Brazil.
For these companies, provided that they are duly registered with SISPROM, will be granted total exemption from the payment of Income Tax on remittances for payment of expenses in the following cases:
- Participation in trade fairs
- International workshops
- Trade missions
- Research in foreign markets for the entry of Brazilian products
Expenses for advertising in all these events will also be covered by SISPROM.
It is important to state that all operations concerning the promotion of Brazilian companies’ services must be registered with SISPROM before they actually take place.
Finally, it is necessary to say that company expenses that are not linked to any international events or market research cannot benefit from the tax incentive, such as expenses for general advertising or for events held in Brazil. Expenses for sales commission, travelling, accommodation and car rentals are also not covered by SISPROM.
Accessing SISPROM
SISPROM can be accessed via this link, by means of the company’s Digital Certificate, its e-CNPJ. When registering a new company with SISPROM, it is possible for the company to individually register its own legal representatives by means of their e-CPF. After the registry, the company will be free to register promotion operations with SISPROM.