Provisional Measure 1.205/2023 established the Green Mobility and Innovation Program (MOVER Program) in Brazil. The measure aims to boost technological development and global competitiveness in the automotive industry. The program broadens sustainability requirements for the automotive fleet and encourages the production of new technologies in the areas of mobility and logistics, replacing the former “Rota 2030”.

Conceived by the Ministry of Development, Industry, Commerce, and Services (MDIC), the new program will promote the expansion of investments in energy efficiency, include minimum recycling limits in vehicle manufacturing, and offer lower taxes for those who pollute less, creating the Green IPI (Tax on Industrialized Products).

The fiscal incentive for companies to invest in decarbonization and meet the program’s mandatory requirements will be R$ 3.5 billion in 2024; R$ 3.8 billion in 2025; R$ 3.9 billion in 2026; R$ 4 billion in 2027; and R$ 4.1 billion in 2028, amounts which shall be converted into financial credits. Ultimately, the program will reach over R$ 19 billion in granted credits.

To benefit from the tax incentive, which can amount to financial credits of up to 300% of the expenditures made on research and development (R&D), companies manufacturing vehicles and auto parts in the country must register with the Ministry of Development, Industry, Commerce, and Services (MDIC) and meet the stipulated requirements. These include being taxed under the real profit regime, having a dedicated research and development cost center, and being in good standing with federal taxes.

Thus, companies in the automotive sector, as well as those involved in any way with this industry’s production chain, should be aware of the new tax opportunities presented by this new program.