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Thread: New Tax Incentives Approved in Brazil to Accommodate iPad Production

  1. #1
    MMi Staff Writer Akshay Masand's Avatar
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    Default New Tax Incentives Approved in Brazil to Accommodate iPad Production


    According to the Brazilian newspaper, Folha, the Brazilian government has officially approved tax incentives that will allow Foxconn to begin producing iPads in the country. The Interministerial Ordinance #34, which was signed on Monday and published in Brazil’s official register recently, specifically provides for a reduction in or exemption from certain taxes associated with the production of touchscreen tablet devices lacking a keyboard and weighing less than 750 grams.

    According to ministerial decree 34 published Wednesday in the "Official Gazette", the company will be entitled to the benefits provided for in Decree 5906 of September 2006.

    The determination provides for exemption or reduction of the IPI (Excise Tax), PIS and Cofins for companies investing in research and development of technology products.
    With these specifications, the iPad 2 fits the description, weighing in at just over 600 grams with only slight variation among the various models. The ordinance also permits the production of accessories, cables, power supplies, and manuals associated with the allowed tablet devices. While the ordinance applies to all tablet devices, it was clearly written to support the plans Foxconn had for the iPad.

    This became the case after Foxconn previously announced a major push to iPad production to Brazil, but the company’s efforts were slowed as it negotiated with government officials over tax breaks and other issues. The company signaled its intention to begin production by December as early as October, and while the company seems to have missed that target, it appears to be ready to move forward. The launch of the iPad production in Brazil comes at a key time for Apple, as the company CEO, Tim Cook, recently noted that Brazil is its next area of emphasis after China among the “BRIC” countries with newly advanced economies. Russia and India are the other two countries in that grouping and Cook has acknowledged that Apple has begun going “deeper into Brazil” as its next target, although he did caution against any expectations of Apple retail stores arriving in the country over the near term.

    Previously, high import taxes on foreign-made goods kept Apple from making significant inroads in Brazil, with iPad pricing currently starting at the equivalent of $925 U.S. dollars for the 16GB Wi-Fi iPad 2. With Foxconn moving the production of the iPad to Brazil under the new tax incentives, Apple should be able to offer more competitive pricing on the device as production ramps up.

    Source: Folha

    Twitter: @AkshayMasand

  2. #2
    I like how those fences in the picture appear to be keeping employees in foxconn. Not keeping unwanted visitors out.

  3. #3
    Quote Originally Posted by tricked View Post
    I like how those fences in the picture appear to be keeping employees in foxconn. Not keeping unwanted visitors out.
    Then the same could be said for every door on that building too.
    Hmm...

  4. #4
    Quote Originally Posted by tricked View Post
    I like how those fences in the picture appear to be keeping employees in foxconn. Not keeping unwanted visitors out.
    Ok, I'm brazilian and I've found this comment very ofensive. Our reality here is a lot diferent than chinese one. We still have a lot of problems about security here, but I can say freedom is not an issue.

  5. #5
    Of Course, how are you going to get people to work so many long hard hours if they think they can leave?
    I say get bigger fences and thicker doors cause I want the Next Big item NOW!!!!!!!!

    Seriously though, I hope its nicer on the inside

  6. #6
    Lol no matter where a company goes they always complain about taxes. It's called paying your dues people...

    Quote Originally Posted by alvaroliva View Post
    Ok, I'm brazilian and I've found this comment very ofensive. Our reality here is a lot diferent than chinese one. We still have a lot of problems about security here, but I can say freedom is not an issue.
    Welcome to America?
    And I don't think he was personally saying or meaning that brazil people have to be kept as rats.
    I thought of the fence keeping people in more of apples idea lol
    Last edited by Cellular; 01-26-2012 at 09:04 AM.

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