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, and Hyundai Motor Co., the newspaper said, citing unidentified presidential aides.