The new legislative package, or Law No. 7103 has been published on March 27, 2018 in the official gazette, which provides for several investment incentives in support of employment, research & development as well as manufacturing. It was officially gazetted on March 27, 2018. It brings incentives for tax advantages for auto-producers in renewable energy, shortened depreciation periods for machinery purchases whose main purpose is research and development (R&D), favorable taxation practices to vehicles using electrical-engines compared to conventional internal-combustion engines, VAT exemption.
Under this Law, companies who are making operation in technological development fields and their income derived from transfer, sale, or lease of registered intellectual property rights get exemption conditioning that the exemption can be claimed in the period the income is earned.
According to this Law, domestic car manufacturers are permitted to claim for a special consumption tax (SCT) refund on certain goods used in production, and delivered for export. But if those goods are not exported within 3 months, then those manufacturer has to wait for additional three months for the SCT declaration and payment to be made.
This Law brings a Value Added Tax (VAT) exemption for industrial facilities in their machinery purchases between May 1, 2018 and December 31, 2019. This incentive can apply if these machinery products used in manufacturing, R&D, innovation and design activities.
