The Office of the Comptroller General of the Republic (CGR) asked the Economic Affairs Committee of the Legislative Assembly to review the 50-year exemption proposed in the reform of the Free Trade Zone Regime to bring investments to places of lesser development.
The Division of Operational and Evaluative Inspection, which issued the criteria on December 19th, indicated that this proposal would grant 50 years of total or partial exemption of income tax to companies located outside the Greater Metropolitan Area, which is a period that in practical terms could be considered open or indefinite.
This project points out that although there are incentives in the Free Trade Zone Law, these have not been enough to bring investments to the less developed areas.
The changes would be made in subsection d) of article 21 of the Free Zone Regime Law (Law No. 7210 of November 23rd, 1990 and its amendments).
The objective is to extend the term of the income tax exemption for companies located outside the GAM, which would increase from six to 30 years for the total exemption, and the subsequent two periods -currently six years each- would increase to 10 years, in which they would pay a rate of 5% and 15%, respectively.
The Office of the Comptroller General pointed out that without detracting from all the positive aspects that are sought with the reform, the application is also a very considerable extension of the term currently provided by the legislation, which is 18 years.