Through the publication of MP 1,185/2023, Article 30 of Law 12,973/2014 is revoked (if approved), among others and also establishes criteria for granting investment subsidy tax credit to legal entities taxed by Real Profit.
One of the provisions of the aforementioned MP will also be the authorization for the use of subsidy credit for investment, which must be previously authorized by the Special Secretariat of the Federal Revenue of Brazil of the Ministry of Finance, with requirements such as a concessional act prior to implementation/expansion of the enterprise and clear definition of counterparts:
• Implementation: establishment of an economic enterprise for the development of an activity to be explored by a legal entity not domiciled in the geographic location of the federative entity that grants the subsidy;
• Expansion: expansion of capacity, modernization or diversification of the production of goods or services of the economic enterprise, including the establishment of another unit, by the legal entity domiciled in the geographic location of the federative entity that grants the subsidy; It is
• Subsidy tax credit for investment is a credit right: a) arising from the implementation or expansion of the economic enterprise subsidized by a federative entity;
b) granted as Corporate Income Tax – IRPJ; It is
c) subject to reimbursement or compensation with taxes administered by the Special Secretariat of the Federal Revenue of Brazil of the Ministry of Finance.
You will be able to calculate a tax credit that will correspond to the product of the subsidy revenues and the IRPJ rate, including the additional rate, in force in the period in which the revenues
were recognized under the terms established in the applicable accounting standard. When calculating the tax credit, only income from
grant that:
I – Are related to the implementation or expansion of the enterprise
economic; It is
II – Be recognized after:
a) completion of the implementation or expansion of the economic enterprise; It is
b) the protocol of the request for authorization of the legal entity.
When calculating the tax credit, the following CANNOT be computed:
I – Revenues not related to depreciation, amortization or depletion expenses related to the implementation or expansion of the economic enterprise;
II – The portion of revenue that exceeds the value of expenses referred to in item I;
III – The portion of revenue that exceeds the value of subsidies granted by the federative entity;
IV – Revenues that have not been computed in the IRPJ and Social Contribution on Net Profit – CSLL calculation basis;
V – Revenues arising from IRPJ incentives and the investment subsidy tax credit itself; It is
VI – Revenues recognized after December 31, 2028. Finally, Article 14 of the aforementioned MP, provides that the amounts recorded in the reserve referred to in art. 30 of Law No. 12,973, of 2014, may only be used for:
“I – absorption of losses, provided that the other profit reserves have previously been fully absorbed, with the exception of the legal reserve; or
II – increase in share capital.
§ 1 In the hypothesis provided for in item I, the legal entity must replenish the reserve as profits are determined in subsequent periods.
§ 2º The values referred to in the caput will be taxed if the provisions of § 1º are not observed or a destination other than that provided for in the caput is given, including in
hypotheses of:
I – capitalization of the value and subsequent refund of capital to the partners or the holder, through a reduction in the share capital, in which case the basis for the incidence will be the established value, limited to the total value of the exclusions arising from donations or government subsidies for investments;
II – refund of capital to partners or holder, through reduction of share capital, in the five years prior to the date of the donation or subsidy, with subsequent capitalization of the value of the donation or subsidy, in which case the basis for the incidence will be the refunded value, limited to the total value of exclusions resulting from donations or government subsidies for investments; or
III – integration into the calculation basis for mandatory dividends.”
We will follow the discussion of this topic in the National Congress, which may or may not be converted into Law.
The following are revoked: 1st § 2nd of art. 38 of Decree-Law No. 1,598, of 1977; 2nd item X of § 3rd of art. 1st of Law No. 10,637, of December 30, 2002; 3rd item IX of § 3 of art. 1st of Law No. 10,833, of December 29, 2003; and 4th art. 30 of Law No. 12,973, of 2014.
Read the MP in full: http://www.planalto.gov.br/ccivil_03/_Ato2023-2026/2023/Mpv/mpv1185.htm
