On Thursday, August 31, 2023, an extraordinary edition of the Federal Official Gazette published Provisional Measure no. 1.185\/2023 (“MP”), which changes the rules for taxing investment subsidies.<\/p>\n\n
Investment grants are forms of financial aid granted by government entities or other organizations to companies, aimed at boosting economic growth, fostering investments in specific sectors or areas, or encouraging the execution of particular projects that result in advantages for society or the economy as a whole.<\/p>\n\n
With the Provisional Measure, which repealed articles 30 of Law 12.973\/2014, and item X of \u00a7 3 of art. 1 of Law 10.637\/2002 and Law 10.833\/2003, these investment subsidies are no longer excluded from the IRPJ, CSLL, PIS and COFINS calculation basis.<\/p>\n\n
According to the system established by the Provisional Measure, taxpayers who receive subsidies from the Federal Government, states, municipalities or the Federal District will be able to calculate a type of tax credit relating to investment subsidies in the Tax Accounting Bookkeeping (ECF) for the calendar year in which the subsidy revenues were recognized, which 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.<\/p>\n\n
This credit may be offset against own debts, due or overdue, relating to taxes administered by the Ministry of Finance’s Special Federal Revenue Office, in accordance with specific legislation; or reimbursed in cash.<\/p>\n\n
Profit reserves already set up based on the exclusion established in article 30 of Law 12,973\/2014, repealed by the Provisional Measure, can only be used to absorb losses, provided that other reserves have already been used up, or to increase capital.<\/p>\n\n
In addition, the Provisional Measure establishes new criteria for companies to qualify for the tax credit related to the investment subsidy, which, in practice, makes it difficult to access the tax benefits that were earned based on the exclusions promoted by Article 30 of Law 12.973\/2014 and the PIS and COFINS Contribution legislation.<\/p>\n\n
This MP comes as a reaction from the government to what was decided by the Superior Court of Justice in Theme 1.182, in which the classification of ICMS benefits as investment grants was recognized, as long as the requirements set out in the law are met – specifically in art. 30 of Law 12.973\/2014, repealed by the MP.<\/p>\n\n
It is important to note that the validity of Provisional Measure 1.185\/2023 is 60 days, extendable for another 60 days, but its approval by the National Congress is necessary. If approved, the new rules for taxing investment grants will come into force on January 1, 2024.<\/p>\n\n
In view of the legislative change, which brings about substantial changes in the rules for taxing investment grants, we are available for any clarifications on the impacts of the new regime and its applications.<\/p>\n\n
Atenciosamente,<\/p>\n\n
Passos e Sticca Advogados Associados \u2013 PSAA<\/p>\n","protected":false},"excerpt":{"rendered":"
On Thursday, August 31, 2023, an extraordinary edition of the Federal Official Gazette published Provisional Measure no. 1.185\/2023 (“MP”), which changes the rules for taxing investment subsidies. Investment grants are forms of financial aid granted by government entities or other organizations to companies, aimed at boosting economic growth, fostering investments in specific sectors or areas, […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[184],"tags":[],"class_list":["post-8989","post","type-post","status-publish","format-standard","hentry","category-informativo"],"_links":{"self":[{"href":"https:\/\/psaa.com.br\/en\/wp-json\/wp\/v2\/posts\/8989","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/psaa.com.br\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/psaa.com.br\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/psaa.com.br\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/psaa.com.br\/en\/wp-json\/wp\/v2\/comments?post=8989"}],"version-history":[{"count":1,"href":"https:\/\/psaa.com.br\/en\/wp-json\/wp\/v2\/posts\/8989\/revisions"}],"predecessor-version":[{"id":8990,"href":"https:\/\/psaa.com.br\/en\/wp-json\/wp\/v2\/posts\/8989\/revisions\/8990"}],"wp:attachment":[{"href":"https:\/\/psaa.com.br\/en\/wp-json\/wp\/v2\/media?parent=8989"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/psaa.com.br\/en\/wp-json\/wp\/v2\/categories?post=8989"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/psaa.com.br\/en\/wp-json\/wp\/v2\/tags?post=8989"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}