By Moema Giovanella

On September 19, 2023, the Federal Senate approved Bill 2.646/20 (“Bill 2.646/20”), which establishes tax benefits for infrastructure projects in the country, through infrastructure debentures, proposing changes to the current regulation of incentivized debentures. The text, from the Chamber of Deputies, was approved with changes, in accordance with the recommendation of the rapporteur, Senator Rogério Carvalho (PT-SE), and will return for analysis by the deputies.

In association with the Growth Acceleration Program – New PAC, recently proposed by the Federal Government, in order to increase investments in infrastructure in the coming years, the approval of PL 2.646/20 brings the estimate that the infrastructure sector in the country will receive investments of R$1.7 trillion by 2026, with R$612 billion coming from the private sector, which means the construction of railways, widening of highways, improving the rural road network in our country, integrating various modes of transport, that is, it is a project of the utmost importance for the development of the country, where one of the main bottlenecks is infrastructure.

These proposals seek to materialize massive investments by the private sector in infrastructure projects in the coming years, considering that the tax benefits offered will allow issuers to tolerate more attractive remunerations for debenture holders, especially those who are already exempt from income tax.

Established by Law 12,431/11, incentivized debentures currently guarantee certain tax benefits to investors who wish to act as creditors of infrastructure projects, and individuals who invest in this type of debt security are exempt from the respective income tax. For corporate investors, the income tax rate is 15%.

Bill 2,646/20 therefore aims to guarantee tax benefits to the debenture issuers themselves, indirectly encouraging the participation of institutional investors exempt from or with a reduced income tax rate, such as, for example, pension funds and certain investment funds.

Among the various measures proposed by Bill 2,646/2020 in relation to infrastructure debentures, the following stand out:

(i) the waiver of prior ministerial approval for projects in the priority sectors listed in the biennial regulations to be published by the federal government;
(ii) the possibility of an exchange rate correction clause in infrastructure debenture issuances, based on an act to be issued by the federal government with the aim of attracting foreign investors;
(iii) the reduction equivalent to 30% of the interest paid by the issuer within the scope of that debenture issue from its income tax and contribution on net profit calculation basis.

According to the text approved by the Chamber of Deputies, the new tax rate would be tiered: debentures would have progressive rates of 20%, 22.5% and 25%, starting in the fiscal year following the publication of the law. According to the rapporteur, Senator Rogério Carvalho (PT-SE), the tax format could reduce the volume of resources raised through incentivized debentures, in addition to increasing the tax cost for new infrastructure debentures.

Furthermore, the change made to the CI was confirmed, avoiding a “relaxation” in the rules for the minimum application of resources in investment projects in the areas of infrastructure, research, development and innovation. Currently, the legislation provides for the transfer of 67% and 85% of the value of the fund's net equity, and in the Chamber's project, the calculation basis is changed to the “reference value of the fund” — the lowest value between the net equity on the reference date and the average of this value in the last 180 days.

According to Bill 2,646/2020, debentures cannot be purchased by people linked to the issuer, such as controlling shareholders or shareholders with more than 10% of voting shares, directors and spouses and relatives up to the 2nd degree. As for companies, those that are affiliated, controlled or controlling cannot purchase the debentures. For funds, the restriction applies to those that have shareholders with more than 10% of shares under the control of any of the companies or individuals prohibited from purchasing the securities.

Those who fail to comply with the purchase prohibitions will be subject to a fine of 20% on the value of the debenture. In cases of fraud, collusion or simulation, even when the buyer is a resident abroad, or even through artifices regarding the legal form, the issuing company will be jointly liable for the fine, if the prohibitions are violated.

Finally, regarding the current ceiling on benefits for debentures issued within five years of the publication of the Law, Bill 2,646/2020 amends this text to determine that the benefit complies with the provisions of the Budget Guidelines Law (LDO), which, for the author of the amendment and the rapporteur, makes the text more suitable for the purpose of attracting long-term investments.