The 2030 Route is the government's new tax incentive program that allows the automotive industry to deduct part of the value invested in research and development.
This is a government program with rules and incentives for car manufacturers, which should be in force for the next 15 years. Among the program's milestones is the fiscal incentive of R $ 1,5 billion per year for the entire automotive industry and basic rules for improving fuel consumption (energy efficiency) and safety, under penalty of fine.
The tax incentive foresees that vehicle manufacturers will be able to reduce from 10,2% to 12% of the amount they invest in research and development in the payment of Corporate Income Tax and Social Contribution on Net Income (CSLL).
The program also foresees the reduction of the Industrialized Products Tax (IPI) for vehicles that exceed energy efficiency and safety targets. For the hybrids and electric the tax drop may fall from 25% to a range between 7% and 20%.
The objective of the 2030 Route is to encourage research and development in the sector and "ensure that investments in research and development are made in Brazil," said Antonio Megale, president of the National Association of Automobile Manufacturers (Anfavea).
The 2030 Route will cover a period of 15 years (until the end of 2032) and as of 1 of August of 2018, electric and hybrid cars will have reduced IPI in Brazil. The provisional measure already signed by President Michel Temer, comes into force next month but most of the changes will not affect the value of ordinary cars, that is, who buys the car powered by alcohol and gasoline will not receive any discount; only the hybrid and electric vehicles will receive reduction of IPI.
However, with the rise in the dollar, it is possible that production and import costs will exceed the discount granted by the IPI reduction, not reflecting a significant reduction in the final price that reaches the consumer at the time of purchase.
Check out the main points of the 2030 Route:
Up to R $ 1,5 billion per year companies that invest at least R $ 5 bi in research in Brazil.
Until 2022, companies are expected to reduce emissions by 11% on current fuel consumption rates.
Vehicles should be labeled with fuel consumption and safety items.
Until 2027 new equipment will be mandatory in all models to reduce number of deaths and accidents.
Companies that fail to comply with the new standards will be subject to 20% fines on sales revenue.
Electric and hybrid vehicles
The IPI charged will be reduced from 25% to a range between 7% and 20% and hybrid vehicles with flex engine will have extra discount.
This change will impact the final value of the product, but it is worth noting that the dollar's rise may make it impossible to reduce the final price of imported vehicles, making the consumer discount impossible due to the abrupt fluctuation of the American currency.