The President of the Republic, Jair Bolsonaro, sanctioned with vetoes the law that establishes a new model of tax incentives for information and communication technology companies and investments in research and development in this sector.
Law 13,969, of 2019, published in the 12/26/2019 edition of the Diário Oficial da União, is the result of a project by deputies Marcos Pereira (PRB-SP), Bilac Pinto (DEM-MG), Vitor Lippi (PSDB- SP) and Daniel Freitas (PSL-SC), and complies with the determination of the World Trade Organization (WTO) to reformulate the Information Technology Law by the end of 2019. In the Senate, the text had Senator Plínio Valério (PSDB-AM) as rapporteur ). The WTO ruling came in response to a complaint by the European Union in 2014 and Japan in 2015 according to which Brazil grants tax incentives through taxes, but collects these taxes in full from imported competitors.
how was the text
The law ends the tax exemption and creates a credit value based on the amount the company invests in research, development and innovation each quarter. The new incentive will be valid until December 2029.
The measure affects manufacturers and developers of electronic components (chips, for example), equipment and machines (except audio and video), computer programs and specialized technical services. The complete list will be defined by the Executive Branch, which will also establish the basic production process to be followed.
Conditions
In order to receive the incentive, the company must present a proposal for research, development and innovation in the sector, which will depend on approval by the Ministries of Economy and Science, Technology, Innovation and Communications.
According to the Information Technology Law (Law 8248/91), companies must annually invest 5% of their gross sales in the domestic market.
The novelty in this topic is that the text allows the use of up to 20% of these values in the implementation, expansion or modernization of physical infrastructure and research laboratories of science and technology institutes (ICTs), which will be considered as research and development.
The text also allows the company, instead of depositing 10% of the minimum limit of application in research at the National Fund for Scientific and Technological Development (FNDCT), to direct this amount to programs and projects of national interest in the areas of information and communication technologies considered priorities by the government.
How it works
Every quarter, the interested company must submit a statement to the Ministry of Science and Technology with data on investments made in research, the amount of credit calculated using the calculation memory and its gross revenue.
The declaration can only be presented after all investments have been made. The ministry will then check for issues such as outstanding investment debts, credits within the permitted limits, and requested data.
The ministry will have 30 days to give its opinion. If you do not do so within this period, the company can use the credit automatically. The maximum period to offset federal taxes with these credits will be five years, and another declaration must be sent to the Federal Revenue.
If there is a questioning of the compensated amounts, a fine of 50% or 75% may be applied, depending on the situation. After the administrative instance is exhausted, the unpaid amount will be sent for collection by the Attorney General's Office of the National Treasury (PGFN).
What can not
Compensation will be prohibited in some situations, such as:
— import-related taxes;
— installment debt;
— debt already cleared;
— amount object of the rejected reimbursement request;
— amount referring to the request for reimbursement under investigation;
— values of family allowance and maternity allowance; and
— estimated income tax amounts paid.
Nor can there be compensation with debts of third parties with the Revenue or pending a final court decision.
Companies whose owners, controllers, directors and their respective spouses occupy positions of free appointment (without public contest) in the public administration will not be able to count on the benefits.
Each year, the Ministry of Science and Technology will disclose, in aggregate form, the resources applied to research, development and innovation.
In addition to the credits related to investments, participating companies will have PIS/Pasep suspension on the purchase of raw materials, intermediate products and packaging that will be used in the sector's production process.
In 2018, investment in research and development was around R$ 2 billion. In 2017, the tax waiver of the Tax on Industrialized Products (IPI) of the benefited companies increased from R$ 5.5 billion. And the taxes paid by them, more than R$ 10 billion.
vetoes
Bolsonaro vetoed a device that granted companies a financial credit of 75% on the value of investments made in Research, Development and Minimum Innovation (PD&IM), limited to 3% of the value of the PD&IM calculation base in the calculation period. According to the veto message, the device “increases the waiver of revenue to the Executive Branch, without indicating the respective source of funding”. According to Palácio do Planalto, the measure violates the Fiscal Responsibility Law and the Budget Guidelines Law of 2019.
Bolsonaro also vetoed an excerpt that prevented some companies from accessing federal government incentive programs. Legal entities whose owners, controllers, directors and their respective spouses hold commissioned positions or elective positions would be excluded. For the Planalto Palace, the measure would offend the principles of isonomy and proportionality.
Source: Agência Senado
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