Tax Exemption for Smartphones in Brazil

Rebeca Duran

Staff Writer
The Brazil Business

Updated

20 December 2013

First the tablets receive tax exemption in Brazil through Lei do Bem, and now its time for the smartphones. This article outlines the exemptions and the companies that are allowed to apply for it.

With the so called Lei do Bem for tablets already sanctioned and being applied in the country, it was time for the federal government to turn its eyes to smaller but similar electronics: smartphones. Such gadgets are still expensive in Brazil, even those that are locally assembled. A new project of the Ministry of Communications was approved in 2013 that gives tax incentives for selling smartphones in the country.

Which Taxes are Comprised in the Exemption?

The main objective of the tax incentives is to increase this product's access to classes C, D and E, by the inclusion of smartphones in the Lei do Bem, reducing the rate of PIS/ Pasep and Cofins to zero for these products. According to the Ministry of Communications, the measure can make the price of smartphones fall by 30%.

Conditions for the Exemption

For the Ministry of Communications, smartphones comprised by the exemption are the ones that have 3G or 4G connections, Wi-Fi capabilities, a built-in web browser and email, an operating system with SDK for developers and a screen size of at least 18 cm ² (about a 2 inch diagonal) screen.

National Apps

With the possibility of cellphones' producers receiving tax exemption of PIS/Pasep for selling smartphones manufactured in Brazil, the government decided that the devices in the market should have at least five national applications installed on their systems.

The Ministry of Communications has released the list of applications for the companies that applied for the exemption. The applications that should be pre-installed on smartphones for each company are:

Apple will have three devices on the exemption list (iPhone 4, 4S and 5), Samsung will have two (S4 and Galaxy Note), Sony will have nine smartphones, Motorola will have 28, Nokia has seven, Digibras has two, Huawei will have three, LG has 27, and Positivo closes the list with nine appliances covered by the exemption.