ICT LAW - LAW No. 13.969/2019
Information Technology Law - Law No. 13.969/2019
The Information Technology Law (Law No. 8,248/91, recently amended by Law No. 13,969/19), provides for the training and competitiveness of the information technology (ICT) sector.
The Information Technology Law is intended for all hardware and automation companies that invest in Research and Development, prove Fiscal Compliance and are producers of an item whose NCM (Mercosul Common Nomenclature) is included in the list of products encouraged by the Law.
The main change in the Legislation is in the format of the benefit, which until 03/31/2020 was a reduction in the IPI (Tax on Industrialized Products) by 80% when the product leaves the establishment and, from April 2020, will be through financial credit. This credit can be earned annually or quarterly.
The minimum investment percentage in RD&I required in return for the benefit has not changed. There was, however, an increase in the calculation base, which is no longer based on Net Revenue, and is now calculated in relation to Gross Revenue.
The new law does away with tax exemptions and creates a credit value based on the total amount that the company invests in research, development and innovation each quarter - this credit can be earned annually or quarterly. The new incentive will be valid until December 2029. The advantages in hiring by the federal public administration and special lines of financing were maintained.
The Legislation is applicable to legal entities that manufacture information and communication technology goods that invest in Research, Development and Innovation (RD&I) activities, that comply with the Basic Production Process (PPB) and that are qualified under the terms of Law nº 8.248, of October 23, 1991. To enjoy the benefit, the company must request the approval of the product from the MCTIC. Companies already qualified by Law 8,248 will remain so, as long as compliance with established obligations is maintained.
The basic production processes (PPBs) will have to undergo alterations to adapt to the new legislation, since the new formula for calculating the benefit provides for a PPB per scoring system and not as it is today, by definition of compliance with the production stage.
Several points of the previous legislation have not yet been clearly addressed, such as the specific definition of the benefit, presentation of the companies' counterparts, the control of the benefit and the way of presenting the information to the MCTIC, and it is still expected a regulation more complete and comprehensive than that of MCTIC Ordinance No. 1294/2020. During this period, companies must adjust internal processes and controls in order to adapt them to the new legislation.