Which tax benefits exist?
In Brazil, companies in the IT and information and communication technology (ICT) sectors can exclude certain costs from the net income for the purpose of calculating actual profit, without prejudice to the normal deduction. The costs that can be excluded are expenses for training of personnel that works in the development of computer programs and software. The exclusion only applied to the IRPJ and CSLL taxes and is based on Law 11.774 / 2008 and the Normative Instruction 986/2009 of the Receita Federal do Brasil.
It is important to notice that the exclusion is limited to the value of the real profit before the exclusion itself. Consequently, the use of any excess in a subsequent verification period is forbidden.
Who can profit from the text benefits?
Under the respective law, IT and ICT include the following services:
- systems analysis and development
- data processing and the like
- development of computer programs, including electronic games
- licensing or assignment of right to use computer programs
- computer advice and consultancy
- computer technical support, including installation, configuration and maintenance of computer programs and databases, as well as technical support services for computer equipment in general
- planning, preparation, maintenance and updating of websites
- Continued execution of procedures for preparing or processing corporate, public or private management data and client process management, with the combined use of manpower and computer systems
Which values can be excluded?
Values allowed in the calculation of exclusion are:
- the costs and expenses corresponding to the cost of technical, superior or advanced (postgraduate) training
- specific training or specialization in IT or ICT, including scholarship costing, offered to the worker if he is employed by the beneficiary company and works in the development of software or ICT within the company
Which criteria have to be fulfilled by the training courses?
The training courses have to be:
- offered by an education institution duly accredited by the Ministry of Education or by the competent state or municipal education agencies and
- the technical course or higher has to be included in the National Catalog of Technical Courses or the National Catalog of Higher Technology Courses, prepared by the Ministry of Education
Expenditure on teaching and proficiency in foreign languages is not allowed in the calculation of the exclusion, except if the training is provided under the technical or higher or postgraduate course
How to get the exclusion?
In order to make use of the exclusion covered in this Roadmap, the IT and ICT company is required to individually control the costing expenses of each technical course, higher or advanced, and also identify, individually, the costs per educational institution and per worker benefited.
The legal entity that calculates the IRPJ based on the Real Profit, in relation to the exclusions and additions to the Net Profit, must comply with the general bookkeeping rules of the Real Profit Book (LALUR).
These regulatory changes could affect your business with view to customizing or support of your ERP/SAP system. Please contact us to learn about possible necessary reactions to the changes – we are happy to assist you!