Approved at the end of December last year, Law No. 14,260/2021 created ProRecicle, a program originally designed to stimulate business activities aimed at recycling materials and the use of recyclable raw materials, through the granting of tax incentives within the scope of the IRPJ.
The initial plan was to allow companies taxed based on Real Profit to deduct part of their income tax (up to 1%) for projects approved by the Ministry of the Environment aimed at developing recycling (training; research and studies; infrastructure implementation, etc.). Individuals could deduct up to 6% of their income tax (IRPF) due.
However, the provisions granting tax benefits were vetoed because they implied a waiver of revenue without demonstrating their fiscal impact and presenting counterparts that would safeguard the achievement of fiscal targets, and due to a lack of budgetary provision.
With this, the programs will provide those who invest in recycling projects with a simple certificate of recognition for investors who contribute.
Therefore, companies operating in the recycling sector will still have to “fight” in court to ensure their right to PIS and COFINS credits on purchases of waste, residues or scraps of plastic, paper or cardboard, glass, iron, steel, copper, nickel, aluminum, lead, zinc and tin, currently prohibited due to articles 47 and 48 of Law No. 11,196/2005. The good news is that the precedents are favorable to taxpayers.
Regarding ICMS, the following is the difficulty regarding the lack of harmonization of treatment (presumed credit and tax deferral).
Tax planning continues to be essential for the sector.
