Brazil released the National Congress Act No. 8 of 14 March 2018 in the Official Journal. The Act extends by 60 Days of Provisional Measure No. 810 of 8 December 2017. This act changes the tax incentive for IT companies investing in research and development (R&D) including reduction of federal tax on finished goods. Main changes are:
- IT companies can use the incentive for third party R&D studies;
- increases the cost of R&D that can be shared with startups;
- provides for a minimum requirement for R&D investment of 5% of gross domestic income;
- clarifies the documentation requirement for incentives for companies whose annual turnover is less than 10 million BRL.
Legislation to convert PM 810 into law is currently pending and if not approved within 60 days, the amendments of PM 810 will cease to apply.
