Brazil Lei do Bem R&D Tax Incentive 2026

Program Overview

Lei do Bem (Law No. 11.196/05) is Brazil's most comprehensive tax incentive for innovation. The law provides a 'super deduction' mechanism designed to reduce institutional barriers and encourage R&D investment by Brazilian companies.

Super Deduction Benefits

Base Super Deduction: 160-180% deduction of R&D expenses from taxable income

Patent Bonus: Additional 20% deduction for costs incurred in developing registered patents

Effective Tax Reduction: 20.4% to 34% reduction in income tax (IRPJ) and social contribution (CSLL) on R&D expenditures

Total Benefit: Combined income tax and CSLL deductions create substantial savings

Additional Tax Benefits

IPI Reduction: 50% reduction in industrialized products tax on R&D machinery and equipment purchases

Accelerated Depreciation: Immediate or accelerated amortization of R&D machines and equipment

Income Tax Exemption: On remittances abroad for registration and maintenance of patents, trademarks, and plant varieties

Immediate Depreciation: Full depreciation of R&D equipment in year of acquisition

Eligibility Requirements

Companies operating under 'Lucro Real' (actual profit) tax regime

R&D activities conducted within Brazil

Profit-making companies (not in loss position)

Compliance with tax obligations

R&D activities must qualify as technological innovation

Proper documentation and accounting of R&D expenses

Submission of annual report to Ministry of Science, Technology and Innovation (MCTI)

Qualifying R&D Activities

Development of new products or production processes

Technological innovation in existing products or processes

Basic and applied research

Experimental development

Pilot projects and prototypes

Industrial design for technological innovation

Software development (if represents technological innovation)

Application Process

1. Ensure company operates under Lucro Real tax regime
2. Document all R&D activities and expenses separately
3. Maintain detailed technical reports of innovation activities
4. Calculate eligible R&D expenses according to Lei do Bem guidelines
5. Apply super deduction in annual corporate tax return (IRPJ/CSLL)
6. Submit annual report to MCTI via online portal
7. Retain documentation for audit purposes (5-10 years)
8. Consider engaging tax/innovation consultants for compliance

2026 Tax Reform Context

Supplementary Law 214/2025 introduced new taxes (IBS, CBS, Selective Tax) with gradual implementation starting 2026. The government has focused on maximizing tax collection with some restrictions on tax incentive calculations for IRPJ/CSLL and PIS/COFINS. However, Lei do Bem core benefits remain operational for qualifying companies.

Key Advantages

Automatic benefit (no pre-approval required)

One of the most generous R&D tax incentives in Latin America

Multiple stackable benefits (super deduction + IPI + depreciation)

No cap on total R&D expenses eligible

Bonus deduction for patent development

Reduces both income tax and social contribution

Can be combined with BNDES/FINEP grants and other programs

Contact Information

Ministry of Science, Technology and Innovation (MCTI) Lei do Bem Portal: https://www.gov.br/mcti

Receita Federal do Brasil (Federal Revenue) Website: https://www.gov.br/receitafederal

Consult with Brazilian tax advisors and innovation consultants for compliance guidance