Tax Incentive for Recovery

Everything you need to know about IFR - Tax Benefit for Recovery

• Methodology

  • Preliminary meeting
  • Mid-term meeting
  Analysis of the scope of investments made
  Technical description of investments
  • Calculation of the value of the IFR tax benefit
  Post-submission follow-up Mod. 22 IRC

• Recipients

  IRC taxpayers who carry out, as their main activity, a commercial, industrial or agricultural activity.

• Access conditions

  Organized accounting;
  Taxable income is not determined by indirect methods;
  Have the tax situation regularized;
  Do not terminate employment contracts for 3 years, counted from the 1st day of the 7th month of the tax period in which the eligible investment expenses are incurred, under the terms of collective dismissal or dismissal due to the termination of the job;
  Do not distribute profits for 3 years, counted from the 1st day of the 7th month of the tax period in which the eligible investment expenses are incurred.

• Eligible expenses and investments

  Expenses on investment in operating assets are those relating to tangible fixed assets and biological assets that are not consumables, acquired as new and that come into operation or use by the end of the tax period that begins on or after January 1, 2022.

  Investment expenses in intangible assets subject to deterioration are also eligible, namely:
  Development projects;
  Elements of industrial property, such as patents, trademarks, permits, production processes, models or other assimilated rights, acquired for consideration and whose exclusive use is recognized for a limited period of time.
  Additions of assets that, not referring to advances, translate into additions to ongoing investments initiated in those periods.

• Non-eligible expenses and investments

  Asset additions resulting from transfers of ongoing investments.
  Investments in assets susceptible of use in the personal sphere, considering:
  Light passenger or mixed vehicles, pleasure boats and tourist aircraft, except when such goods are allocated to the operation of the public transport service or are intended for rental or the assignment of the respective use or enjoyment in the exercise of the normal activity of the taxable person;
  Furniture and comfort or decoration items, except when related to productive or administrative activity;
  Those incurred with the construction, acquisition, repair and expansion of buildings, except when related to productive or administrative activities.
  Assets allocated to activities under concession agreements or public-private partnerships entered into with public sector entities.
  Intangible assets, whenever acquired as a result of acts or legal transactions of the beneficiary taxable person with entities with which it finds itself in a situation of special relationships, under the terms defined in paragraph 4 of article 63 of the Cod. from IRC.
  Land is not an asset acquired in new condition.
  The assets underlying the eligible expenses must be held and accounted for in accordance with the rules that determined their eligibility for a minimum period of 5 years or, when less, during the respective minimum period of useful life, determined in accordance with Dec. Reg. n.º 25/2009, of September 14, or until the period in which the respective physical slaughter, dismantling, abandonment or destruction takes place, observing the rules provided for in art. 31.º – B of Code. IRC.

• Scope of Deduction

  The tax benefit to be granted corresponds to a tax deduction, calculated on investments in eligible fixed assets and related to exploration incurred between July 1 and December 31, 2022.
  The maximum amount of eligible expenses is €5,000,000.00 and the value of the collection deduction is given by the following compound rate:
  10% of the eligible expenses incurred in the tax period up to the amount corresponding to the simple arithmetic average of the eligible investment expenses of the 3 previous tax periods;
  25% of eligible expenses incurred in the tax period in the part that exceeds the limit set out in the previous point.

• Benefit Exclusivity

  The IFR tax incentive is not cumulative, in relation to the same eligible investment expenses, with any other tax benefits of the same nature provided for in other legal diplomas.

  Note: Can be combined with tax benefits for job creation.