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Anpei Official Statement: New agreement for the Good Law – PM 694

In order to give clarity to the effort of Anpei, its associates and the Business Mobilization through Innovation of CNI, to reverse the damaging impacts of PM 694, published on 30/9/2015, suspending the fiscal benefits for innovation in 2016, described in Law 11.196/05, known as Good Law, we provide the following clarifications:
• On the last December 15th, 2015, it was released the preliminary statement of the rapporteur of PM 694 Joint Parliamentary Commitee. This document got contaminated by the fiscal crisis deepening and, in an effort of the Federal Revenue with the Joint Commission that was analysing the PM, it incorporated new paragraphs that aimed to change, permanently, the scope and impact of Good Law. The proposal orchestrated by the Treasury would reduce by half the right of companies to take advantage of fiscal incentives for innovation and change all rates that parameterize the use of expenditures and aggregation of RD&I efforts to half established in 2005. Furthermore, the text would extend the suspension of the benefit use, also for the year 2017.
• Considering the seriousness of this change for the future and investments in innovation in Brazil, Anpei, its Good Law Working Group and the Business Mobilization through Innovation of CNI organized a task force and were in action yesterday, 16/12/2015, in the National Congress. In order to reverse the proposal presented, the group supported the discussions at the meeting of the PM 694 Joint Commission, negotiated with the deputies and senators of the commission and the Secretary of Federal Revenue, Jorge Antônio Deher Rachid. It should be highlighted the balance and sobriety of the Commission`s President, the deputy Eduardo Cury, in conducting the debates.
The mobilization generated brought to the plenary parliamentarians who are icons of the Congress CT&I agenda, such as the senator Cristovam Buarque, president of the Senate Commission on Science, Technology, Innovation, Communication and Informatics. His performance at the meeting allowed rescuing, through debates, the strategic nature of the Good Law for the future of ST&I in Brazil. At the end of the Commission`s morning session, the senator had already officially incorporated himself as a member of this important commission.

The result of this effort was the successful negotiation with the rapporteur Romero Jucá, who sensitive and attentive to the economic and social future of the country, articulated a negotiation between the actors and enabled an alternative way to the suspension of Good Law benefit, in the following terms:
• Maintenance of parameters and rates originally established in the Law 11.196 of November 21st, 2005.
• Conversion of tax royalties generated by RD&I expenditures in 2016 in credit for usufruct in 2017 and 2018. This way, the private sector supports the fiscal effort in 2016, but not abruptly interrupts investments in RD&I in the country.

The text discussed yesterday with Jucá hasn’t been published yet, because there are other controversial points in the PM that are under negotiation, relating to the financial sector. Due to this lack of general agreement, the Commission meeting held yesterday was adjourned without a vote. The works will be resumed in February.
Other advances needed to the adjustment of Good Law to the existing international instruments, such as the use of Good Law credits in subsequent fiscal years, will be discussed in a particular bill over 2016. This determination is already part of the institutional agenda of Anpei and Business Mobilization through Innovation of CNI.

Next steps
The Joint Commission will meet again in the first half of February to seek agreement on other items of PM 694, such as sectoral tax agenda (agriculture for biofuels) and taxation of investment funds (banking agenda). After the agreement on these items by the Joint Commission, the text of the PM can go to vote in Congress.
If there is no agreement, the more likely it is that the PM fell for lapse of time, since it has already been extended once. In this case, the Good Law would be suspended for the period from January to March. For companies to recover the credit of this period, it will be necessary a Legislative Decree.
Anpei and CNI will continue working to ensure that the text agreed yesterday will be presented when the Joint Commission get back to work, in February. As contingency action, we will also work to support the writing of the Legislative Decree.
We also thank the associates TOTVS, Inventta, Whirpool, Natura, Embraer, 3M, Brasscom, P&D Brasil, Sindipeças and many other organizations that joined us in this successful task force and contributed decisively to the protection of the Good Law.

Check out the text agreed in the minutes of Joint Committee on December 16th:
http://www.senado.leg.br/atividade/rotinas/materia/getTexto.asp?t=185513&c=RTF&tp=1 

São Paulo, December 17 th, 2015.
National Association for Research and Development of Innovative Companies – ANPEI