Foxconn will soon begin production of iPads in Brazil, as the country has approved specific tax incentives designed to aid Apple’s popular tablet.
The Brazilian government will give tax breaks to Foxconn for the production of tablets specified as weighing under 750 grams and lacking keyboards. The taxes that will be affected are the Excise Tax (IPI), Social Contribution Tax (PIS), and Federal Contribution Tax (COFINS)
Here’s the relevant chunk, as reported by Brazilian newspaper Folha (google translation):
According to the ministerial decree 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.
According to the ordinance today, the rule will apply to tablets with touch screens, no keyboard and weighing less than 750 grams. Also included as accessories, cables, power supplies and manuals that are related to the tablets.
The expectation is that Foxconn start producing devices – especially the iPad from Apple – the factory in Jundiai, São Paulo.
The $12 billion deal to bring Apple manufacturing to Brazil hit some roadblocks in 2011. From Foxconn’s end, it was the ridiculous bureaucracy and high tax rates in Brazil that held up production. From the Brazilian government’s end, Foxconn was simply demanding insane tax breaks.
iPad production was supposed to kick off in July 2011, but these differences of opinion held it back. With the passing of these new incentives, it follows that Foxconn’s Brazilian plant should start pumping out Apple tablets in no time.