Because of this decision, taxpayers may be able to include revenue from the sales of goods to the Manaus Free Trade Zone in the calculation for PIS/COFINS tax credits.

Brazil's Superior Court of Justice (STJ) held, on February 18, 2020, that sales of goods with national origin to the Manaus Free Trade Zone (MFTZ) for consumption, industrialization or re-export abroad are considered exports that qualify for the tax benefit known as Reintegra (i.e., Special Regime for Reinstatement of Tax Amounts to Exporting Companies).

Law 12,546/2011 established Reintegra, which is a tax incentive that returns PIS/COFINS (i.e., social contributions) tax credits to exporting companies to eliminate remaining tax liabilities in the production chain and preserve the competitiveness of Brazilian export prices. The credits are calculated by applying a specific rate determined by Brazilian tax authorities. The rates varied during the past five years, but could reach as high as 2%, depending on the period.

The STJ and lower courts of justice may use this decision as a guide in future cases beginning on the date the decision is published in the Electronic Court Gazette. The decision states the following:

The tax benefit of the Special Regime for Reinstatement of Tax Amounts to Exporting Companies (Reintegra) reaches the operations related to the sale of goods of national origin to MFTZ, for consumption, industrialization or re-export abroad.

Because of this decision, companies that have sales to MFTZ and are beneficiaries of Reintegra could include the revenue of these sales in the calculation of the PIS/COFINS tax credits.

Given that this decision is not binding (but a relevant precedent), entities with sales to the MFTZ should evaluate how they might benefit from Reintegra.

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