Law 11.196/2005, also known as the “Lei do Bem,” is an important tool aimed at fostering technological innovation and scientific development in Brazil. Through this law, the government offers tax incentives for companies investing in research, development, and innovation (R&D), contributing to the country’s technological advancement and competitiveness on the global stage.
Brazil’s “Lei do Bem” law offers significant tax breaks for companies investing in research and development (R&D). The main benefit is a potential tax deduction of up to 100% of R&D investments. This reduces the taxable base for two corporate taxes: Income Tax (IRPJ) and Social Contribution on Net Profit (CSLL). Additionally, companies can benefit from a 50% discount on the Tax on Industrialized Products (IPI) when buying machinery and equipment specifically for R&D activities. Finally, the law allows for full depreciation of these R&D assets in the year they are acquired, maximizing tax savings.
These tax benefits encourage companies to invest in innovation and represent an opportunity to reduce the tax burden, since R&D expenditures can be used as a strategy to decrease taxes owed. This becomes especially relevant in a context where companies are looking for legal and effective ways to optimize their tax load and maximize their financial results.
Furthermore, “Lei do Bem” plays a key role as a feedback instrument for innovation. By offering tax incentives for R&D activities, the legislation encourages companies to invest in the research and development of new technologies, products, and processes, contributing to increased competitiveness and the creation of qualified jobs in the country. Companies don’t need to develop a groundbreaking innovation to qualify for the “Lei do Bem” tax benefits. The innovation can be new for the company itself, even if similar products or processes already exist elsewhere in the market.
It’s important to highlight that “Lei do Bem” can represent an alternative for companies that have lost the tax benefit brought by Complementary Law 160/2017. The latter stipulated that the subsidies offered through ICMS tax incentives would not be considered in the calculation base for the collection of IRPJ and CSLL. With the loss of this benefit, companies may find in “Lei do Bem” a new opportunity to reduce their tax burden, encouraging investment in innovation and technological development in the country.
“Lei do Bem” represents not only a significant incentive for companies to invest in research and development but also a strategic alternative for reducing the tax burden and promoting innovation in Brazil. Through this legislation, the government and companies can work together to boost the country’s technological and scientific development, generating long-term economic and social benefits.
