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The consideration for the benefit is annual investment in R&D in information technology. This researchshall occur in the Country, in a minimum sum of 5% of the gross revenues of the company applying forthe benefit, derived from the sale, in the domestic market, of information technology and automationgoods. For the purpose of the calculation of gross revenues, the taxes imposed on the said sale, andthe purchase cost of the products eligible for the incentive shall be deducted, pursuant to law.The law and its regulation stipulate in detail the method of allocating resources to be invested in R&Dby the applicant company of the benefit, including establishing minimum percentages to be earmarkedfor agreements with official or accredited research and teaching centers and entities.The investment percentage in R&D will be reduced progressively, as shown in the table below:Reduction of Investments in R&DYEAR20% 01.01.04 to 12.31.201425% 01.01 to 12.31.201530% 01.01.16 to 12.31.2019When involving investments related to information technology goods produced in the Mid-West Regionand regions of influence of ADA and ADENE, the reduction of the investment percentage in R&D willobserve the following criteria:Reduction of Investments in R&DYEAR13% 01.01.04 to 12.31.201418% 01.01 to 12.31.201523% 01.01.16 to 12.31.2019The beneficiary companies of the incentives shall submit to the Science and Technology Ministry, onan annual basis, descriptive reports to evidence observance of the investment percentages requiredby law. If the beneficiary company fails to observe the legal requirements, the benefit may besuspended, without prejudice to the reimbursement of already enjoyed benefits, adjusted andincreased by arrears interest and fines.The producer companies of information technology and automation goods, whose plants are locatedin the Manaus Free Trade Zone, shall also invest at least 0.8% of their gross revenues in R&Dannually, in exchange for the tax incentives granted. The funds shall be earmarked for research in theAmazon, in accordance with the project to be submitted by each company to SUFRAMA and to the59

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