Brazil Plans Tax Breaks for Some Foreign Automakers, Folha Says

Foreign carmakers that set up factories in Brazil will receive tax breaks under new rules that increase the industrial-production duty to prevent a surge in vehicle imports, Folha de S. Paulo reported, without saying where it obtained the information.

The companies will pay less than the 30 percentage-point tax increase on the so-called IPI tax, and in exchange will be required to gradually increase the share of locally produced parts to 65 percent, the Sao Paulo-based newspaper said.

Government officials are negotiating with Bayerische Motoren Werke AG (BMW), and Hyundai Motor Co. (005380), the newspaper said, citing unidentified presidential aides.

To contact the reporter on this story: Adriana Brasileiro in Rio de Janeiro at abrasileiro@bloomberg.net

To contact the editor responsible for this story: Laura Price at lprice3@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.