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Brazil tax exemption removal curbs Wobben’s wind turbine orders

Enercon GmbH’s Wobben Windpower is losing contracts in Brazil after tax authorities canceled some exemptions for wind turbine manufacturers in the country, an official said.

Enercon GmbH’s Wobben Windpower is losing contracts in Brazil after tax authorities canceled some exemptions for wind turbine manufacturers in the country, an official said.

The Brazil unit of Germany’s Enercon had a single customer so far this year, Mathias Moser, a vice president of Wobben, said in an interview yesterday in Rio de Janeiro. The company had considered leaving South America’s fastest-growing market after Brazilian tax authorities in April removed a tax incentive and required turbine makers such as Wobben, Spain’s Gamesa Corp., Tecnologica SA and Denmark’s Vestas Wind Systems A/S to pay back taxes for the exemption.

“This is definitely a restructuring year for us in Brazil,” said Mathias, who came to the country in April amid a management change.

Enercon, based in Aurich, Germany, decided to stay in Brazil last month after filing an appeal on the tax incentive ruling, according to Mathias. He didn’t disclose how much the company owes in back taxes. Brazil is seeking the previous five fiscal years of back taxes for the exemption.

“We have always produced in Brazil, so we have had the benefit for many years,” Mathias said. “It is a lot of... more [truncated due to possible copyright]  

Enercon GmbH’s Wobben Windpower is losing contracts in Brazil after tax authorities canceled some exemptions for wind turbine manufacturers in the country, an official said.

The Brazil unit of Germany’s Enercon had a single customer so far this year, Mathias Moser, a vice president of Wobben, said in an interview yesterday in Rio de Janeiro. The company had considered leaving South America’s fastest-growing market after Brazilian tax authorities in April removed a tax incentive and required turbine makers such as Wobben, Spain’s Gamesa Corp., Tecnologica SA and Denmark’s Vestas Wind Systems A/S to pay back taxes for the exemption.

“This is definitely a restructuring year for us in Brazil,” said Mathias, who came to the country in April amid a management change.

Enercon, based in Aurich, Germany, decided to stay in Brazil last month after filing an appeal on the tax incentive ruling, according to Mathias. He didn’t disclose how much the company owes in back taxes. Brazil is seeking the previous five fiscal years of back taxes for the exemption.

“We have always produced in Brazil, so we have had the benefit for many years,” Mathias said. “It is a lot of money.”

Wobben started manufacturing turbines in Brazil in 1995, the first turbine maker to install a facility in the country. It has four facilities in the country, and has the capacity to produce as many as 200 turbines at its Sorocaba plant in Sao Paulo state. In its sole contract this year, the company delivered 23 turbines for Elecnor SA of Spain’s wind park in southern Brazil.

“It is a drop from last year’s,” Mathias said, without specifying 2013 deliveries.

Turbine Talks

Brazil’s Ministry of Finance is considering reinstating the tax exemption for turbine makers, according to Elbia Melo, president of the country’s wind power association known as Abeeolica.

“The wind industry is facing problems with the government’s special incentive plan for the equipment manufacturers and it is relevant to solve it,” Melo said in a phone interview from Sao Paulo. “We are in talks with the government.”

The Ministry of Finance’s press office said it does not comment on potential rule changes.

Wind energy in Brazil is among the cheapest sources of power. The country has the biggest capacity in Latin America, according to a Global Wind Energy Council report of 2013.

Wobben is optimistic about winning its appeal in court, according to Mathias.

“We are staying, given the good prospects for the Brazilian market,” said Mathias. “The size of the company’s business in the country can be affected if we don’t sign contracts in the future.”


Source: http://www.bloomberg.com/ne...

AUG 30 2014
http://www.windaction.org/posts/41128-brazil-tax-exemption-removal-curbs-wobben-s-wind-turbine-orders
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