Special Tax Credit For Investments

Author:Mr Ricardo Seabra Moura
Profession:Vieira de Almeida & Associados

It was published today Law nr. 49/2013, establishing a Special Tax Credit for Investments ("STCI").

What is the STCI?

The STCI is a 20% Corporate Income Tax ("CIT") deduction of the amount made in certain investment expenses that are made between June 1, 2013 and December 31, 2013.

What are the eligible investment expenses?

The following investment expenses are eligible to the STCI :

Expenses regarding the investment on new fixed assets used for the operational activity of the company - i.e. expenses with the acquisition of new fixed tangible assets (e.g. machinery) and non-consumable biological assets that are acquired in new condition (land is not considered as such) and entering into service or used by the end of the tax period that begins on or after January 1, 2014. Expenses on development projects Expenses on industrial property elements (e.g.: patents, trademarks, licenses, production processes, models or other similar rights, acquired for valuable consideration and whose sole use is recognized for a limited period of time). It is clarified that are not considered investment expenses those incurred on assets susceptible of use for personal purposes such as: Expenses with passenger cars or mixed vehicles, yachts and tourism aircrafts, except when such goods are used on public transport activities or intended for rental or lease of the respective use in the normal activity of the company; Expenses with furniture and comfort or decoration items, and those incurred with the construction, acquisition, repair or extension of any buildings, except when used in productive or administrative activities. Expenses incurred on assets engaged to the activities under concession agreements or public-private partnership agreements with public sector entities and expenses related to intangible assets acquired in acts or legal transactions with related parties are excluded from the STCI rules. Who can benefit?

CIT taxpayers who mainly develop a commercial, industrial or agricultural activity, provided that the following requirements are met:

Such entities must have regularly...

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