Decree regulating the recycling incentive law (“LIR”) is published
On July 11, 2024, Federal Decree No. 12,106/2024 was published, regulating the tax incentive for the recycling sector established in Law No. 14,260 of 2021.
The income tax abatement applies to entities or individuals that offer direct support for projects that have been approved by the Ministry of the Environment and Climate Change (“MMA”). Such projects must aim at:
(i) developing research and studies related to shared responsibility for the life cycle of products;
(ii) incubation of micro-enterprises, small businesses, cooperatives and solidarity-based social enterprises that operate in recycling activities;
(iii) implementing and adapting the physical infrastructure of micro-enterprises, small businesses, industries and cooperatives of recyclable material collectors;
(iv) acquiring equipment and vehicles for the selective collection, reuse, processing, treatment and recycling of materials by industries;
(v) organization of marketing networks and production chains, and support for these networks;
(vi) strengthening the participation of collectors of reusable and recyclable materials in recycling chains;
(vii) development of new technologies to add value to the work of collecting reusable and recyclable materials;
(viii) training, education, and technical assistance, including the promotion of exchanges.
Such income tax abatement will be limited to 1% of the tax due in each quarterly or annual assessment period in the case of legal entities and to 6% of the income tax in the case of individuals.
The MMA will establish all administrative proceedings related to Decree.
The Environmental & Sustainability team at Souto Correa is available to provide more information and clarifications on the matter.