The Decree for the Promotion of the Manufacturing, Maquila and Export Service Industry (IMMEX Decree) grants the right to companies that are authorized to obtain the value-added tax (VAT) favorable balances refund in a term that shall not exceed five business days.

In the event that a Company does not obtain a refund from the federal tax authorities within the above-mentioned term, this company may ask for the payment of interests for all the time period exceeding the five business day's term, up to the moment the deposit is made. This criterion has been backed up in case law issued by the Full Collegiate Court of the Federal District, when deeming that the federal tax authorities shall pay an indemnity when they do not refund the VAT within the term mentioned above.

In this regard, we deem there are reliable and reasonable elements to obtain a final favorable ruling in a nullity lawsuit (45 days) that binds the federal tax authorities to pay interests when a refund has not been made within the five days subsequent to the respective request.

The Federal Fiscal Code sets forth that the refund will be applied firstly to interests and subsequently to the amounts the refund of which has been requested.  In this regard, if the refund including interests is not completely paid, what would be demanded in the nullity lawsuit would be the refund of the VAT favorable balance excess, plus the interests on this amount calculated as from the moment the defense means is lodged and up to the moment the owed amount is deposited.