The control of SIFIDE is “very complex”, but the coordination between the tax authorities and the National Innovation Agency has already resulted in 20 million euros of tax corrections in three years, the tax administration assured this Wednesday, 25th.
The guarantee was left in parliament by the general director of the Tax and Customs Authority (AT), Helena Borges, who is being heard at the Budget, Finance and Public Administration Committee on a Government law proposal that extends the Tax Incentive System for Business Research and Development (SIFIDE) until 2026 and revokes indirect application of the benefit through investment funds.
“This is a highly complex control regime”, he highlighted, explaining that the responsibility for supervision is divided between the Federal Revenue and ANI and that there is good cooperation between the two institutions to prevent companies from being able to “take advantage of the benefit” unduly.
SIFIDE is a tax benefit that allows companies to deduct from the profit that is taxed in IRC a part of the expenses incurred in research and development (R&D) activities, such as expenses with personnel directly involved in research and development tasks or costs with the registration, purchase and maintenance of patents.
Helena Borges explained that a significant part of the supervision, relating to the eligibility of expenses and the nature of investments, is the responsibility of ANI, she said that the division of these tasks is well defined and guaranteed that there are regular contacts and “full coordination” between the two institutions.
“I can convey this confidence to the deputies”, he said, referring to the efficiency of fiscal control.
Borges said that “in the last three years, 600 beneficiary companies were subject to inspection control actions”, which resulted in tax corrections of 20 million euros.
These were not, however, the only control actions carried out by AT, he highlighted, saying that tax services carry out control when companies submit their tax returns and a subsequent control “when they receive configuration data from ANI”, which validated the applications, the type of investment considered eligible and the amounts eligible for the tax benefit.
In the bill under discussion in parliament, in addition to the government obtaining authorization from parliament to extend the rules for another year, it will be able to “extend, from three to five years, the deadlines for investment funds to make investments in companies that make the aforementioned investments in research and development activities and for these to make the respective investments in research and development activities”, according to the text of the initiative.
At the same time, the executive is authorized to “not extend the possibility of indirect application of SIFIDE II through investment funds”, ending the possibility for companies to deduct the amounts invested in venture capital funds that support R&D projects, that is, deduct indirect research expenses.
As a result, companies can no longer create new investment ‘stocks’ to be deducted, but those that have already created an investment ‘stock’ will be able to access the tax benefit.
Regarding the fact that the government had proposed not to extend the indirect SIFIDE, the director of AT said that this decision would have resulted from the “finding of evidence” that the values “are not translating into investment”.
The proposed law under discussion was approved in general on January 23, and is currently being considered in the specialized phase.
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