Brazil Foxconn To Begin Producing iPads As Tax Hurdle Overcome

Brazil Foxconn To Begin Producing iPads As Tax Hurdle Overcome

A Brazil-made iPad has been in the offing since July 2011. However, plans by Taiwan’s Foxconn to build the tablet in South America were held up by negotiations surrounding taxes that could double the cost of Apple’s tablet. Now comes word the government has exempted the iPad, freeing Foxconn to begin churning out iPads stamped “Made in Brazil.”

The tax issue was an important hurdle to overcome as they raised the cost of Apple doing business in Brazil as well as hiked the price of Apple products for South American consumers. The tablet and other keyboardless devices weighing less than 750 grams will forego Brazil’s Excise Tax, Social Contribution Tax and Federal Contribution Tax, according to the Portuguese-language news site FOLHA.

In September, Foxconn decried the taxes, warning they could threaten the $12 billion deal to build iPads in the South American country. The agreement, announced Monday in the Brazil’s Inter-Ministerial Decree 34, apparently suggests the parties have settled their disputes. A government minister in 2011 was quoted as calling Foxconn’s concerns as “crazy demands.”

The deal could also be seen as relieving some pressure from both Foxconn and Apple. The Cupertino, Calif. company was recently criticized for the working conditions at plants run by Chinese suppliers. Apple CEO Tim Cook refuted a New York Times front-page article about how iPhones are built, saying he was “outraged” about the report which he described as “offensive” and “patently false.”

  • nolavabo

    All that will happen now is we’ll see stories describing work conditions in Brazil as evil and immoral too.

  • Al

    We indeed might.

    However I think Brazil has much better employment laws than China, so hopefully Foxconn will do better.

    For this reason alone I want my next iProduct to have “Industria Brasileira” stamped on it.

  • Al

    Brilliant news. I hope India is next.

  • Carlos Francisco Suarez Doriga

    Are they gonna produce the iPhone too?

About the author

Ed SutherlandEd Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.

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