Tax reduction for airlines is sanctioned

On May 31, Brazil’s President Jair Bolsonaro sanctioned Law 14,355 of 2022, which reduces the Income Tax (IRRF, in Portuguese) for aircraft leasing payments by Brazilian companies. Aeronautical leasing works like a lease made by banks and companies to airlines. Aircraft owners lease them to airlines, which pay a monthly fee for its use. Most companies in Brazil and around the world operate with leased aircraft. According to the sector, one of the advantages of these contracts is the lower immediate cost for airlines in relation to what they would have if they bought the aircraft. Law 14,355, which is the result of a provisional measure enacted in December (PM 1,094/2021), reduced the tax on remittances made abroad to pay for aircraft and engines. The change benefits airlines, and the tax reduction will be valid until 2026. As the PM was issued in December, it was guaranteed that in 2022 (and also in 2023) the rate would fall from 15% to 0%. In 2024, the rate will be 1%; in 2025, 2% and in 2026, 3%. “In our view, the relevance and urgency of these IRRF reductions are even more evident with the conflict between Russia and Ukraine, which erupted in February and caused international oil prices to rise, which was passed on to the price of aviation kerosene”, said Senator Nelsinho Trad (PSD-MS), who reported the PM to the Senate. According to the government, the tax waiver of Law 14,355 will be BRL 1.7 MM: BRL 374 M in 2022, BRL 382 M in 2023, BRL 378 M in 2024, BRL 371 M in 2025, and BRL 371 M in 2025, and BRL 158 M in 2026. “This is an achievement for the national air sector, which should be reflected in the reduction of costs and, consequently, we hope that in the price of air fares”, said the Minister of Tourism, Carlos Brito, alluding to the sanction, published in an extra edition of the Federal Official Gazette. Estimates from the Brazilian Association of Airlines (ABEAR, in Portuguese) indicate that the measure will allow the permanence of 95,400 jobs, the maintenance of salaries in the order of BRL 2.8 MM, and the injection of BRL 6.2 MM in the Brazilian GDP . – https://www.panrotas.com.br/aviacao/parcerias/2022/06/reducao-de-imposto-para-companhias-aereas-e-sancionado_189753.html