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Proposal for Law No 229 /XII

Exhibition of Motives

The promotion of competitiveness and investment has been a priority of the Government

from the beginning of the legislature.

In this matter, during the year 2013, initiatives of the greatest relevance were adopted,

notably, the package for investment and the Tax Reform on the

Income of Collective Persons (IRC).

In the framework of the package for the investment a significant set of

measures that have contributed, decisively, to promoting investment and the

competitiveness. Among these measures stands out the creation of the Extraordinary Tax Credit

to the Investment to enable to strengthen private investment in 2013.

On the other hand, in the framework of the IRC Reform, the nominal IRC rate was reduced by two

percentage points and simplified the tax, decreasing compliance costs and

increasing the competitiveness of the tax system.

Following the reform of the IRC and with the aim of intensifying investment support,

favoring sustainable growth, job creation, and contributing to the

strengthening the capital structure of companies, the Government is now proposing to promote the

comprehensive review of investment benefit schemes and capitalization.

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In this context, the Government considers pressing the revision of the Tax Code of the

Investment in such a way as to, on the one hand, adapt it to the new European legislative framework

applicable to state aid for the period 2014-2020 and, on the other hand, strengthen the

various schemes of tax benefits to investment, in particular with regard to

investments that provide for the creation or maintenance of jobs and if

locate in less favored regions.

So, and as far as contractual tax benefits are concerned, the Government intends to increase

the maximum limit of the IRC-based tax credit, as well as the majorities

forecasted for investments carried out in regions with a purchasing power per capita

significantly lower than the national average, which provide for the creation or maintenance

of jobs, contribute to technological innovation or the protection of the

environment.

On the other hand, regarding the Fiscal Investment Support Regime, the Government

intends to increase the limit of the IRC-based tax credit, extend the term of the

exemption from Municipal Tax on Real estate, as well as the scope of the exemption

of Ice Tax, encouraging entrepreneurship, innovation and favoring the

setting up of companies with healthy capital structures.

Thus:

Under the terms of the paragraph d) of Article 197 (1) of the Constitution, the Government presents to the

Assembly of the Republic the following proposal for a law:

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Article 1.

Object

Is the Government authorized to approve a new Tax Code of Investment, revoking

o Decree-Law No. 249/2009 of September 27, and adapting the benefit schemes

tax on investment and capitalization of companies to the new applicable European rules

on State aid for the period 2014-2020, with a view to promoting the

competitiveness of the Portuguese economy and the maintenance of a favourable tax context

investment, the creation of employment and the strengthening of the companies ' own capitals,

as well as amending the Status of Tax Benefits (EBF), approved by the Decree-Law

n. 215/89, of July 1.

Article 2.

Sense and extension

1-A The authorization referred to in the previous article is granted to the Government for:

a) Approve a new Tax Code of Investment by repealing the Tax Code of the

Investment approved by Decree-Law No 249/2009 of September 27;

b) Amend the scheme of contractual benefits to productive investment, provided for in the

article 41 of the EBF, approved by the Decree-Law No. 215/89 of July 1,

transferring you to the new Tax Code of Investment;

c) Approve, in the framework of the new Tax Code of Investment, the Tax Regime of

Support for Investment (RFAI);

d) Change the benefit to reinvestment of profits and reserves provided for in the

articles 66-C to 66.-L of the EBF, transferring it to the new Fiscal Code of the

Investment;

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e) Amend the scheme of the conventional remuneration of the social capital provided for in the article

9. of Law No. 2/2014 of January 16, transferring it to the Statute of the

Tax Benefits;

f) Integrate into the new Tax Code of Investment the system of tax incentives in

research and business development II (SIFIDE II), provided for in the current articles

33 to 40 of the Tax Code of Investment, approved by the Decree-Law No. 249/2009,

of September 23.

2-A authorisation provided for in the paragraph a) and b) from the previous number has as a sense and

extension:

a) Adapting the scheme to the European provisions on State aid for

the period 2014-2020 in particular:

i) To the provisions set out in the General Exemption Regulation by category

that defines the conditions under which certain categories of aid may be

considered to be compatible with the internal market;

ii) To the rules laid down in the national map of state aid with purpose

regional.

b) Establish that the scheme is applicable to contractual benefits to investment

to be granted until December 31, 2020;

c) Define the regions and economic activities susceptible to the granting of benefit

under this scheme, in accordance with the European rules and the map

national state aid with a regional purpose;

d) Define the limits and criteria for determining the tax benefit globally

assigned, specifically:

i) Listen to indexes per capita of purchasing power with regard to the

location of the investment project;

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ii) Define benefit attribution scales depending on the number of posts

of work created or maintained in the framework of the investment project;

iii) Meet the contribution of the investment project to the development

strategic, technological innovation and scientific research, the protection of the

environment, the strengthening of competitiveness and the increase in productive efficiency.

e) Reviewing the scope and sense of the relevant applications, identifying fixed assets

tangible that, despite affections to the realization of the investment project, are

excluded from the scope of the benefit, as well as intangible assets

covered by the scheme;

f) Reviewing and simplifying procedures for application and assessment of processes

contractual concession of the benefits;

g) Review the conditions for contractuation, surveillance and monitoring of the

eligible project;

h) Establish that the tax benefits to the investment of a contractual nature

provided for in Article 41 of the EBF, they become fully established and

regulated in the new Fiscal Investment Code.

3-A authorisation provided for in the paragraph c) of paragraph 1 has as a sense and extension:

a) Adapting the scheme to the European provisions on State aid for

the period 2014-2020, namely:

i) To the provisions set out in the General Exemption Regulation by category

that defines the conditions under which certain categories of aid may be

considered to be compatible with the internal market;

ii) To the rules laid down in the national map of state aid with purpose

regional.

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b) Extend the duration of the scheme until December 31, 2020;

c) Define the regional and sectoral scope of application of the benefit accordingly

with the European rules and the national map of state aid with purpose

regional;

d) Define the limits of tax benefits to be granted, in particular, in function,

of the regions eligible under the applicable European legislation and, in the case of

newly constituted companies, allow a deduction to the collection up to the competition of the

same as for the relevant applications effected in the period of taxation

of the commencement of activity and the following two periods of taxation;

e) Predict that the portion of the deduction to collection that cannot be deducted for insufficiency

of collection, can be deducted up to 10 periods of later taxation;

f) To strengthen the mechanisms for monitoring and monitoring this benefit scheme.

4-A authorisation provided for in the paragraph d) of paragraph 1 has as a sense and extension:

a) Adapting the scheme to the European provisions on State aid for

the period 2014-2020, namely:

i) To the provisions set out in the General Exemption Regulation by category

that defines the conditions under which certain categories of aid may be

considered to be compatible with the internal market;

ii) To the rules laid down in the national map of state aid with purpose

regional.

b) Enabling the cumulation of this regime with the RFAI;

c) To strengthen the mechanisms for monitoring and monitoring this regime of

benefits;

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d) Exclude this benefit from the scope of the limitation provided for in Article 92.

Tax Code on Collective Persons Income (CIRC), approved

by Decree-Law No 442-B/88 of November 30;

e) Establish that the benefit to reinvestment of profits and reserves, provided for in the

articles 66-C to 66.-L of the EBF, passes to be fully established and regulated

in the new Fiscal Investment Code;

5-A authorisation provided for in the paragraph e) of paragraph 1 has as a sense and extension:

a) Adapting the scheme to the European provisions on State aid for

the period 2014-2020, namely:

i) To the provisions set out in the General Exemption Regulation by category

that defines the conditions under which certain categories of aid may be

considered to be compatible with the internal market;

ii) To the applicable European rules on aid de minimis .

b) Establish that the regime of conventional remuneration of social capital passes through

be fully established and regulated in the EBF;

c) Exclude this benefit from the scope of the limitation provided for in Article 92.

of the IRC Code.

Article 3.

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Duration

The authorisation granted by this Law shall be for the duration of 180 days.

Seen and approved in Council of Ministers of May 22, 2014

The Prime Minister

The Minister of the Presidency and Parliamentary Affairs

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The promotion of competitiveness and investment has been a priority of the Government

from the beginning of the legislature.

In this matter, during the year 2013, initiatives of the greatest relevance were adopted,

notably, the package for investment and the Tax Reform on the

Income of Collective Persons (IRC).

In the framework of the package for the investment a significant set of

measures that have contributed, decisively, to promoting investment and the

competitiveness. Among these measures stands out the creation of the Extraordinary Tax Credit

to the Investment to enable to strengthen private investment in 2013.

On the other hand, in the framework of the IRC Reform, the nominal IRC rate was reduced by two

percentage points and simplified the tax, decreasing compliance costs and

increasing the competitiveness of the tax system.

Following the reform of the IRC and with the aim of intensifying investment support,

favoring sustainable growth, job creation, and contributing to the

strengthening the capital structure of companies, the Government is now proposing to promote the

comprehensive review of investment benefit schemes and capitalization.

In this context, the Government considers pressing the revision of the Tax Code of the

Investment in such a way as to, on the one hand, adapt it to the new European legislative framework

applicable to state aid for the period 2014-2020 and, on the other hand, strengthen the

various schemes of tax benefits to investment, in particular with regard to

investments that provide for the creation or maintenance of jobs and if

locate in less favored regions.

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So, and as far as contractual tax benefits are concerned, the Government intends to increase

the maximum limit of the IRC-based tax credit, as well as the majorities

forecasted for investments carried out in regions with a purchasing power per capita

significantly lower than the national average, which provide for the creation or maintenance

of jobs, contribute to technological innovation or the protection of the

environment.

On the other hand, regarding the Fiscal Investment Support Regime, the Government

intends to increase the limit of the IRC-based tax credit, extend the term of the

exemption from Municipal Tax on Real estate, as well as the scope of the exemption

of Ice Tax, encouraging entrepreneurship, innovation and favoring the

setting up of companies with healthy capital structures.

Thus:

In the use of the legislative authorization granted by the Article [...] of the Law n. [...], and in the terms

of the points a) and b ) of Article 198 (1) of the Constitution, the Government decrees the following:

Article 1.

Object

The present decree-law proceeds to the revision of the schemes of tax benefits to investment

productive, and respect for regulation, with a view to promoting the competitiveness of the

Portuguese economy and the maintenance of a favourable tax environment for investment, à

job creation and the strengthening of the own capitals of companies, and approves a new

Investment Code code.

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Article 2.

Approval of the new Fiscal Investment Code

The new Tax Code of Investment is approved, in annex to this decree-law, which

of it is an integral part.

Article 3.

Amendment to the Income Tax Code of Collective Persons

Article 92 of the Income Tax Code of Collective Persons, approved

by Decree-Law No. 442 -B/88 of November 30, passes to have the following essay:

" Article 92.

[...]

1-[...].

2-[...]:

a) [...];

b) [...];

c) [...];

d) [...];

e) [...];

f) The deduction scheme for retained and reinvested profits (DLRR),

provided for in the Fiscal Code of Investment;

g) The conventional remuneration scheme of the social capital provided for in the

article 41 of the Status of Tax Benefits. "

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Article 4.

Addition to the Status of Tax Benefits

It is added to the Status of Fiscal Benefits, approved by the Decree-Law No. 215/89, of 1

of July, Article 41, with the following essay:

" Article 41.

Conventional remuneration of social capital

1-In the determination of the taxable profit of commercial or civil corporations under

commercial form, cooperatives, public companies, and too many collective people

of public or private law with head office or effective direction in territory

portuguese, an importance corresponding to remuneration can be deduced

conventional of the social capital, calculated by applying the rate of 5%

to the amount of the entries carried out, by cash deliveries, by the partners, in the

scope of the constitution of society or the rise of social capital, since

that:

a) The beneficiary society is qualified as micro, small or

average company, in accordance with the criteria set out in the Annex to

Decree-Law No 372/2007 of November 6, amended by the

Decree-Law No 143/2009 of June 16;

b) The partners participating in the constitution of the society or in the

increase in social capital are exclusively natural persons,

venture capital corporations or venture capital investors;

c) Your taxable profit is not ascertained by indirect methods.

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2-A deduction referred to in the preceding paragraph:

a) It applies exclusively to entries, within the framework of the constitution of

societies or the increase of the social capital of the beneficiary society;

b) It is effected in the finding of the taxable profit for the period of

taxation in which the mentioned entries occur and in the three

following periods of taxation.

3-The tax benefit provided for in this Article is subject to the European rules

applicable in aid of aid de minimis . "

Article 5.

Systematic changes

Chapter VI of Part II of the Status of Tax Benefits, approved by the Decree-Law

n ° 215/89 of July 1, composed of Article 41, It shall have by epitographe " Benefits

tax to the capitalization of companies ".

Article 6.

Transient standard

The provisions of Chapter II of the new Tax Code of Investment, with the essay given

by the present decree-law, applies to the investment projects whose applications are

presented in, or from, July 1, 2014, keeping up with respect to the

previous contracts the legal regimes under which the same were concluded.

Article 7.

Abrogation standard

1-Are repealed Articles 41, 66-C to 66.-L of the Status of Tax Benefits,

approved by Decree-Law No. 215/89 of July 1.

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2-The Tax Code of Investment, approved by the Decree-Law No 249/2009, is repealed,

of September 23, as amended by Law No. 20/2012 of May 14, by the Decree-Law

n ° 82/2013 of December 31 and by the Law No. 83-C/2013 of December 31.

Article 8.

Entry into force and production of effects

This decree-law shall come into force on the day following that of its publication and it produces effects

since July 1, 2014.

Seen and approved in Council of Ministers of

The Prime Minister

The Minister of State and Finance

The Minister of Economy

The Minister of Education and Science

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ANNEX

(referred to in Article 2)

NEW INVESTMENT TAX CODE

CHAPTER I

Object

Article 1.

Object

1-The new Fiscal Code of Investment, henceforth designated by Code, establishes:

a) the scheme of contractual tax benefits to productive investment;

b) The Fiscal Investment Support Regime (RFAI);-

c) The system of tax incentives in research and business development II

(SIFIDE II); and

d) The deduction scheme for retained and reinvested profits (DLRR).

2-The scheme of contractual tax benefits to productive investment and the RFAI

constitute schemes for regional purpose approved under the terms of the

Regulation (EU) No XXX approving the General Regulation of Exemption by Category,

published in the Official Journal of the European Union, n ° X XXX, of XXXXXX (RGIC).

3-The DLRR constitutes a scheme of tax incentives for investment in favour of micro,

small and medium-sized enterprises approved in the terms of the RGIC.

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CHAPTER II

Contractual tax benefits to productive investment

SECTION I

Scope of application

Article 2.

Objective scope

1-Until December 31, 2020, tax benefits may be granted, under scheme

contractual, with a term of up to 10 years from the completion of the project of

investment, investment projects, as they are characterized in the present

chapter, whose relevant applications are of an amount equal to or greater than € 3000

000.00.

2-The investment projects referred to in the previous number must have your object

understood in the following economic activities. respecting the sectoral scope of

implementation of the Guidelines on Regional Purpose Aid for the period

2014-2020, published in the Official Journal of the European Union, n ° C 209, of July 13 of

2013 and of the RGIC:

a) Extractive industry and manufacturing;

b) Tourism and the declared activities of interest for tourism under the terms of

applicable legislation;

c) Computer activities and services and related;

d) Agricultural, fish and forestry activities, agrolivestock and forestry;

e) Research and development activities and high technological intensity;

f) Information technologies and audiovisual and multimedia production;

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g) Environment, energy and telecommunications.

3-By porterie of the members of the Government responsible for the areas of the economy and the

finance are defined the codes of economic activity (CAE) corresponding to the

activities referred to in the previous number.

SECTION II

Conditions of eligibility

Article 3.

Subjective conditions

1-Investment projects are eligible when:

a) The promoters possess technical and managerial capacity;

b) The promoters demonstrate a balanced financial situation, determined in the

terms of the following number;

c) The promoters have regularly arranged accounting of agreement

with the legal provisions in force and that it is appropriate to the analyses required for

the appreciation and follow-up of the project and allow to autonomize the effects of the

same;

d) Promoters ' taxable profit is not determined by indirect methods of

evaluation;

e) The financial contribution of promoters, from their own resources or

upon external funding that takes on a form free of any support

public, correspond to at least 25% of the eligible costs;

f) Beneficiary companies are not considered companies in difficulty in the

terms of the communication of the Commission-Community guidelines concerning the

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state aid for emergency and restructuring to companies in difficulty,

published in the Official Journal of the European Union , n ° C 244, of October 1, 2004;

g) The promoters present the regularized tax and contributory situation;

h) The promoters are not subject to a recovery injunction following the

a decision by the Commission to declare an aid illegal and incompatible with the

internal market.

2-For the purposes of the provisions of the b) of the preceding paragraph, the situation is considered to be

financial is balanced when financial autonomy, as measured by the ratio of capital

own and the total net asset, be it equal to or greater than 0.2.

3-For the purposes of the provisions of the preceding paragraph, own capital may be considered

the amounts of supplies or loans of associates, provided that the same come

to be included in the social capital prior to the signing of the contract referred to in Article 16.

Article 4.

Objective conditions

1-Can have access to contractual tax benefits to productive investment the projects

of initial investment, the realization of which has not started before the application

provided for in Article 15 that they demonstrate to have technical, economic and financial viability and

that fulfil the following conditions:

a) Be relevant to the strategic development of the national economy;

b) Be relevant to the reduction of regional asymmetries;

c) They induce the creation or maintenance of jobs;

d) Contribute to boost technological innovation and scientific research

national, for the improvement of the environment or for the enhancement of competitiveness and

productive efficiency.

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2-Consideration of initial investment projects the investments related to the

creation of a new establishment, the increase in the capacity of an establishment

already existing, the diversification of the production of an establishment with regard to

products not previously manufactured in that establishment, or a change

fundamental of the overall production process of an existing establishment.

3-For the purposes of this scheme, the commencement of the realization of a project shall be deemed to be

of investment report at the date of the first invoice issued to the promoter companies,

on debits effected by the suppliers within the project, with the exception of the

acquisition of land and preparatory work such as obtaining permits and the

carrying out prior studies, as well as advances for signaling,

related to the project, up to the value of 50% of the cost of each acquisition.

4-In the regions eligible for aid pursuant to paragraph 3 (c) of Article 107 of the

Treaty on the Functioning of the European Union, set out in Annex I to the present

Code, which of it is an integral part, in the case of companies that do not enroll in the

category of micro, small and medium enterprises, as defined in Recommendation

n. 2003 /361/CE of the Commission of May 6, 2003, can only benefit from the

regime of contractual tax benefits to productive investment the projects of

investment that respect investments in new tangible and intangible assets

related to the creation of a new establishment, or with the diversification of the

activity of an establishment, on the condition that the new activity is not the same or

a similar activity to the one previously exercised in the establishment.

5-Notwithstanding the provisions of the preceding paragraph, the Council of Ministers may approve,

on a proposal from the Council provided for in Article 14, the granting of tax benefits in

contractual regime to investment projects that do not fall into that definition,

comply with the European rules applicable to aid ad hoc .

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Article 5.

Incentive effect

Constitutes condition of eligibility the demonstration of the incentive effect of the benefits

tax, to be done through form to be defined by porterie of the members of the Government

responsible for the areas of finance and the economy.

Article 6.

Obligations of the promoters

1-In addition to the conditions laid down in the preceding Articles, the promoters shall be subject to the

following obligations:

a) Making available, in the time limits set, all the elements that are

requested by the competent entities for follow-up purposes,

control and surveillance of the investment project;

b) Communicate to the competent entities any change or occurrence that puts

in cause the assumptions regarding the approval of the project, as well as its

punctual achievement;

c) Comply in a timely manner with the legal obligations to which they are bound,

specifically tax and contributory;

d) Maintain the legal conditions necessary for the exercise of the respect of activity,

particularly as to their situation with respect to licensing;

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e) Maintain economic activity and investments in the region for a minimum period

of three years from the date of the completion of the investment project, in the case of

micro, small and medium-sized enterprises as defined in Recommendation n.

2003 /361/CE, of the Commission, of May 6, 2003, or five years, in the remaining

cases, except when it comes to the replacement of obsolete equipment in reason

of rapid technological developments, and provided that economic activity is maintained in the

region;

f) Maintain a balanced financial situation determined under the terms of paragraph 2 of the

article 3 during the duration of the contract.

2-In cases where the promoter intends to obtain tax benefits in tax office

municipal on real estate (IMI) and or municipal tax on transmissions

onerous immovable property (IMT), the allocation of these benefits is conditional on the

respect for acceptance by the competent municipal body under the terms of Law No. 169/99, of

September 18 amended by the Leis n. ºs 5-A/2002, January 11, 67/2007, 31 of

December, 1/2011, of November 20, and 75/2013, of September 12, and too much

applicable legislation.

3-A proof of the acceptance referred to in the preceding paragraph is made by joining the proceedings

of a declaration of acceptance of the benefits in question, issued by the municipal body

competent.

4-The failure to comply with the obligation laid down in paragraph 1 (e) determines the total loss

of the tax benefits granted pursuant to this Code and still the obligation to,

within 30 days of the date of the respective notification and regardless of the

time has since elapsed since the date of verification of the respects generators

of tax, pay in the terms of the law the importances corresponding to tax revenues

uncollected, plus compensatory interest in the terms of the General Tax Act

(LGT), taking place the executive procedure, checking for lack of payment

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until the expiry of that 30-day period.

5-The beneficiaries of the schemes provided for in this Code shall evidenced the tax

that cede to be paid as a result of the deduction referred to in Article 8, by

mention of the corresponding value in the annex to the balance sheet and the statement of results

on the period of taxation in which the deduction takes effect, in the accounting of the

taxable persons of Income Tax on Collective Persons (IRC).

Article 7.

Notification to the European Commission

Under European legislation, it is notified to the European Commission the granting of

tax benefits that fulfil the conditions set out in that legislation, specifically

those in which the adjusted amount of the aid, calculated according to the mechanism

defined in paragraph 20 of Article 2 of the RGIC, exceeds the threshold of notification provided

in point 20 (n) of the Guidelines on regional purpose aid for the

period 2014-2020, published in the Official Journal of the European Union, paragraph C 209, of 13 of

July 2013 (OAR).

SECTION III

Benefits

Article 8.

Tax benefits

1-The investment projects provided for in the preceding Articles may be granted,

cumulatively, the following tax benefits:

a) Tax credit, determined on the basis of the application of a percentage,

understood between 10% and 25% of the relevant applications of the project of

effectively realized investment, to deduct from the amount of the IRC collection

ascertained under the terms of the ( a) of Article 90 (1) of the IRC Code;

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b) Exemption or reduction of IMI, for the duration of the contract, regarding the

buildings used by the promoter in the framework of the investment project;

c) Exemption or reduction of IMT regarding the acquisitions of buildings, included in the

investment plan and carried out during the period of investment.;

d) Exemption from Selo Tax in respect of all acts or contracts

necessary to the realization of the investment project.

2-A deduction provided for in paragraph a ) of the previous number is effected in the liquidation of IRC

concerning the period of taxation in which the relevant applications were carried out

or, when the may not be fully, the importance can still be deducted, in the

same conditions, in the settlement of the exercises until the expiry of the term of the contract

referred to in Article 16 para.

3-A deduction provided for in paragraph a ) of paragraph 1 has the following limits:

a) In the case of business creation, the annual deduction may correspond to the total of the

collection ascertained in each taxation period;

b) In the case of projects in already existing societies, the maximum annual deduction does not

may exceed the highest value between 25% of the total tax benefit granted or

50% of the collection ascertained in each taxation period.

Article 9.

Criteria for determining tax benefits

1-The tax benefit to be granted to the investment projects, at IRC headquarters,

corresponds to 10% of the relevant applications of the project effectively carried out.

2-A The percentage set out in the preceding paragraph may be majorated as follows:

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a) In 6%, should the project find itself in a region that, at the date of submission of the

application, do not present an index per capita of purchasing power superior to the

national average in the last two annual ascertainments published by the Institute

National of Statistics, I.P. (INE, I.P.);

b) Up to 8%, should the project propose the creation of outposts or their

maintenance until the end of the term of the contract referred to in Article 20 of the Agreement

with the following eight scales:

1%-(equal to or greater than) 50 jobs;

2%-(equal to or greater than) 100 jobs;

3%-(equal to or greater than) 150 jobs;

4%-(equal to or greater than) 200 jobs;

5%-(equal to or greater than) 250 jobs;

6%-(equal to or greater than) 300 jobs;

7%-(equal to or greater than) 400 jobs;

8%-(equal to or greater than) 500 jobs;

c) Up to 6%, in case of excecional contribution of the project to the conditions set out

in Article 4 (1)

3-In the case of being recognized excecional relevance of the project for the national economy,

can be attributed, through resolution of the Council of Ministers, a majoration to

5%.

4-The percentages of majorities provided for in the preceding paragraphs may be assigned

cumulatively, respecting the total limit of 25% of the relevant applications.

5-Total tax benefit corresponds to the amount resulting from the application of the percentages

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referred to in this article to the value of the relevant applications effectively carried out.

Article 10.

Maximum applicable limits

1-The tax benefits granted must respect the maximum limits resulting from the

application of the national map of state aid with a regional purpose for the period

2014 a 2020, approved by the European Commission in XXXXXX, published in Annex II

to this Code, which of it is an integral part.

2-Should the investment projects benefit from other state aid, the calculation of the

limits referred to in the preceding paragraph shall take into account the total amount of the

state aid with regional purpose granted to the investment or project of

investment in question, coming from all sources.

3-In the case of investment projects whose relevant applications exceed

€ 50000 000.00, the applicable maximum limits are subject to adjustment

set out in paragraph 20 of Article 2 of the RGIC.

Article 11.

Relevant applications

1-Considerate relevant applications, for the purposes of calculating the tax benefits, the

expenses associated with the investment projects and relating to:

a) Tangible fixed assets affections to the realization of the project, except for:

i) Land that does not include in projects of the extractive industry sector,

intended for the exploitation of mineral concessions, table waters and

medicinals, quarries, barriers and airmen;

ii) Buildings and other constructions not directly connected to the process

productive or the essential administrative activities;

iii) Light or mixed viatures;

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iv) Other transport material in the value exceeding 20% of the total

relevant applications;

v) Furniture and articles of comfort or decoration, save hotel equipment

affection for tourism exploitation;

vi) Social equipment;

vii) Other investment goods that are not affections to the holding of the company,

saved productive equipment intended for use, for purposes

economic, from waste resulting from the processing process

productive or consumption in Portugal, provided that of recognized interest

industrial and environmental;

b) Intangible fixed assets, consisting of expenses with transfer of

technology, notably through the acquisition of patent rights, licences,

"know -do" or technical knowledge not protected by patent.

2-In the case of passive IRC subjects that do not enroll in the category of the micro,

small and medium-sized enterprises, as defined in Recommendation No 2003 /361/CE of the

Commission, of May 6, 2003, the investment expenditure referred to in point (a) b )

of the preceding paragraph shall not exceed 50% of the relevant applications.

3-The assets set out in the paragraph a) from the previous number can be acquired in regime of

financial leasing, in the terms set out in paragraph b) of paragraph 6 of Article 14 of the

RGIC provided that the planned purchase option is exercised in the respecting contract during

the term of the contract for the granting of tax benefits.

4-For the purposes of the previous figures, please exclude yourself from the notion of relevant applications as

relating to used equipment and replacement investment.

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5-The relevant applications provided for in the a ) of paragraph 1 and in paragraph 2 shall be

accounted for in the fixed asset of the promoter companies of the investment projects,

owing these goods to remain in the company's asset during the term of the

contract for the granting of tax benefits, except if the respect divestment is

authorized upon dispatch of the members of the Government responsible for the areas of

economics and finance, respected the limits set out in Article 14 (5) of the

RGIC.

6-Are eligible the advances related to the project, up to the value of 50% of the

cost of each acquisition, provided that it has been carried out less than one before the date of

application for tax benefits.

7-Are eligible for the expenditure relating to the studies directly related to the project

of investment, accounted for as intangible fixed asset, provided that there are

less than one year before the date of application for tax benefits.

Article 12.

Simplification of customs procedures

1-The promoters of the productive investment projects benefit from dispensation of

provision of warranty of import duties and too much impositions eventually

due to the non-EU goods subject to the warehousing schemes

customs, active improvement in suspensive system and special destination, during the

term of the contract or until its resolution, in the terms provided for,

respects, in Articles 16 and 20.

2-The promoters who wish to apply for the status of authorised economic operator

for customs simplifications, they must formulate the respective application to the AT, which

is appreciated and decided within 50 days numbered from the respective presentation.

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3-A term count referred to in the previous number is suspended when they are required

additional clarifications, which must be submitted within 30 days, finite

which, in the absence of an attributable response to the promoter, is deemed to be quit-desisting

of the request.

Article 13.

Exclusivity of tax benefits

1-Without prejudice to the provisions of paragraph 2, the contractual tax benefits concerning the

relevant applications of the discriminated project in the respect contract are not

cumulable, with any other tax benefits of the same nature relatively to the

same relevant applications, provided for in this or other legal diplomas.

2-The contractual tax benefits provided for in the preceding Articles are cumulable with the

deduction for retained and reinvested profits, since, and to the extent that, they are not

outdated the applicable maximum limits provided for in Article 10.

SECTION IV

Procedure

Article 14.

Interministerial Council for Coordination of Fiscal Incentives to Investment

1-The Interministerial Council for the Coordination of Fiscal Incentives to Investment,

abbreviately designated by Council, has the following competences, in the framework of

scheme of contractual tax benefits to productive investment:

a) Monitoring of the implementation of the provisions on this type of benefits;

b) Verification of compliance with the conditions of access and eligibility of the

investment projects;

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c) Pronunciation on the interest of investment projects as to the goals

targeted by the tax benefits;

d) Evaluation of the relevant applications;

e) Evaluation of the framework of investment projects, not being linked

to any prefixed measurements of merit, in addition to the provisions of the present

Code;

f) Analysis of the process and shipment of the proposal for approval under the article

16.

g) Issuance of opinion as to the matter concerning tax benefits;

h) Verification of compliance by the promoters of the concession contracts of

tax benefits to investment.

2-The Council is chaired by a representative of the Ministry of Finance and integrates:

a) A representative of the Agency for Investment and Foreign Trade of

Portugal, E.P.E. (AICEP, E.P.E.);

b) A representative of IAPMEI, I.P. -Agency for Competitiveness and Innovation,

I.P. (IAPMEI, I.P.);

c) Two representatives of the Taxation and Customs Authority (AT).

3-The members of the Council referred to in the preceding paragraph shall be appointed by dispatch

of the members of the Government responsible for the areas of finance and the economy.

4-The exercise of duties in the Council at this provision does not confer on the nominees

any allowances or remunerations.

Article 15.

Application and assessment of proceedings

1-The promoters of the investment projects must present, duly

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characterized and reasoned, the process of applying for tax benefits together

of the following entities:

a) AICEP, E.P. E, when investment projects take place in the regime

investment contractual;

b) IAPMEI, I.P., in the remaining cases.

2-Applications are submitted by electronica.

3-Whenever investment projects have sectoral implications that the

justifying, competent public or private entities should be consulted, which

are pronounced within 10 working days.

4-A The entity referred to in paragraph 1 may, in the course of the verification phase of the applications,

request the promoters of the investment projects supplementary clarifications,

which are to be submitted within 10 working days, under penalty of considering

there is dismissals of the procedure.

5-A The entity referred to in paragraph 1 shall submit the process properly instructed, by way of

electronica, accompanied by the respect of the technical opinion, to the Council, within 40 days

useful counted from the date of submission of the application, which is suspended in cases

provided for in paragraphs 3 and 4.

6-The Council shall pronounce within 60 working days from the date of submission of the

process in the terms referred to in the preceding paragraph.

7-The Council may request additional clarifications from the entities referred to in paragraph 1,

case where the time frame provided for in the preceding paragraph suspense.

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Article 16.

Contract for the granting of tax benefits

1-A The granting of the tax benefits is object of contract, approved by resolution of the

Council of Ministers, of which they are listed, specifically, the objectives and targets to

comply with the promoter and the tax benefits granted, and which has a period of

effective up to 10 years from the completion of the investment project.

2-The contracts for the granting of the tax benefits are concluded by the entities

provided for in paragraph 1 of the preceding Article in the quality of representative of the Portuguese State.

3-The additions to the contracts for the granting of tax benefits, of which no result

an increase in benefits or the intensity of support, are approved through

dispatch of the members of the Government responsible for the areas of finance and the

economics.

4-A approval of contracts or additions to contracts, in the terms of the numbers

previous, it must occur within 60 working days from the date of the intended pronunciation

in paragraph 6 of the previous article.

Article 17.

Surveillance and monitoring

1-Without prejudice to the own competences of the AT in relation to surveillance and

monitoring, verification of compliance, by the promoters, of the contracts of

provision of tax benefits to the investment, it is incumbent on the Council in the

article 14 para.

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2-For the purposes of compliance with Article 7 of the Tax Benefits Statute, approved

by Decree-Law No. 215/89 of July 1, the AICEP, E.P.E., and the IAPMEI, I.P., send

annually to AT the verification reports of the fulfilment of the planned objectives

in the contracts for the granting of tax benefits.

Article 18.

Right of hearing

1-Should you verify any susceptible situation of leading to the resolution of the contract, the

Council communicates to the beneficiary of the tax benefits its intention to

propose the resolution of the contract, and may this reply, wanting, within 30

days.

2-Analyzed the response to the communication, or the deadline for its issuance, the

Council issues a reasoned opinion, within 60 days, in which it proposes, if it is

the case, the resolution of the contract for the granting of tax benefits.

Article 19.

Renegotiation

1-The contract may be the object of renegotiation at the request of either party, case

occur some event that substantially changes the circumstances in which the parties

founded their willingness to hire.

2-Any contractual change arising from the renegotiation referred to in the preceding paragraph is

submitted for approval pursuant to Articles 15 and 16.

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Article 20.

Resolution of the contract

1-A The resolution of the contract is declared by resolution of the Council of Ministers in the

following cases:

a) Failure to meet the objectives and obligations set out in the contract, in the

deadlines laid down therein, in fact attributable to the promoter;

b) Failure to timely comply with tax and contributory obligations on the part of

promoter;

c) Provision of false information about the situation of the promoter or data addictions

provided in the presentation, appreciation and follow-up of the projects.

2-For the purposes of the verification of the cause of resolution provided for in paragraph a ) of the number

previous, attention must be paid to the degree of compliance with contractual objectives

(GCC) agreed contractually.

Article 21.

Effects of the resolution of the contract

1-A The resolution of the contract under the preceding Article implies the total loss of the

tax benefits granted since the date of approval of the same, and still the obligation

of, within 30 days of the notification of the notification, and regardless of the

time has since elapsed since the date of verification of the respects generators

of tax, pay, under the law, the importances corresponding to tax revenues

non-raised, plus compensatory interest, pursuant to Article 35 of the LGT.

2-In the lack of payment within the 30-day period, referred to in the preceding paragraph, there is

place the executive procedure.

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CHAPTER III

Investment Support Tax Regime

Article 22.

Scope and definitions

1-The RFAI is applicable to taxable persons of IRC who exercise, principal title, a

activity in the sectors listed in the list defined by the porterie provided for in paragraph 2 of the article

2., with the exception of activities excluded from the sectoral scope of the OAR and the

RGIC.

2-For the purposes of this scheme, relevant applications are considered as investments

in the following assets, provided that it affects the operation of the company:

a) Tangible fixed assets, acquired in state again, with the exception of:

i) Land, save in the case of the purpose of the exploitation of concessions

mining, natural and nascent mineral waters, quarries, barriers and

areers in investments in the extractive industry;

ii) Construction, acquisition, repair and extension of any buildings, save

if they are manufacturing facilities or affections to administrative activities;

iii) Light passenger or mixed viatures;

iv) Furniture and articles of comfort or decoration, save hotel equipment

affection for tourism exploitation;

v) Social equipment;

vi) Other investment goods that are not affected to the exploitation of the

company;

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b) Intangible fixed assets, consisting of expenses with transfer of

technology, notably through the acquisition of patent rights, licences,

"know-how" or technical knowledge not protected by patent.

3-In the case of passive IRC subjects that do not enroll in the category of the micro,

small and medium-sized enterprises, as defined in Recommendation No 2003 /361/CE of the

Commission, of May 6, 2003, the relevant applications referred to in point b ) from the

previous number may not exceed 50% of the relevant applications.

4-Can benefit from the tax incentives provided for in this Chapter the subjects

liabilities of IRC that cumulatively fill the following conditions:

a) Have regularly arranged accounting, according to the

accounting normalization and other legal provisions in force for the respect

activity sector;

b) Your taxable profit is not ascertained by indirect methods;

c) Keep in the company and the region for a minimum of three years to

counting from the date of investments, in the case of micro, small and medium enterprises

as defined in Commission Recommendation No. 2003 /361/CE of the Commission, 6 of

may 2003, or five years in the remaining cases; five years the goods object of the

investment or, when lower, during the respective minimum period of life

useful, determined in the terms of the Regulatory Decree No. 25/2009, 14 of

September, as amended by Law No. 64-B/2011 of December 30, or until the period

where to check the respective physical culling, dismantling, abandonment or

unutilisation, observed the rules laid down in Article 38 of the IRC Code.;

d) Do not be debtors to the State and the social security of any contributions,

taxes or contributions or have the payment of your debits properly

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ensured;

e) Do not be considered companies in difficulty in the terms of the communication of the

Commission-Community guidelines on state aid of emergency

and to the restructuring of companies in difficulty, published in the Official Journal of the Union

European , n ° C 244, of October 1, 2004;

f) Make relevant investment that provides you with the creation of jobs and

its maintenance until the end of the period of constant deduction of the n. ºs 2 and 3 of the

next article.

5-It is considered investment realized the corresponding to the additions, verified in each

period of taxation, of tangible and intangible fixed assets and well so what, having the

nature of tangible fixed asset and not by saying respect to advances, if it translates into

additions to the ongoing investments.

6-For the purposes of the preceding paragraph, do not consider the additions of assets that result from

transfers of ongoing investments transitioned from previous periods, except if

are advances.

7-In the regions eligible for aid under the terms of the c) of Article 107 (3) of the

Treaty on the Functioning of the European Union set out in Annex I to the present

Code, in the case of companies that do not enlarge in the category of micro, small and

medium enterprises, as defined in Recommendation No. 2003 /361/CE of the Commission,

of May 6, 2003, can only benefit from the RFAI the investments who

respect a new economic activity or be the:

a) An investment in tangible and intangible assets related to farmed

of a new establishment, or with the diversification of the activity of a

establishment, on the condition that the new activity is not the same or a

activity similar to the one previously exercised in the establishment;

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b) Acquisition of the assets belonging to an establishment that has closed or

would have closed if it had not been acquired and that this acquisition has been effected

by an independent investor of the seller, on the condition of the new activity

not be an activity identical to or similar to the one previously exercised in the

establishment prior to the acquisition.

Article 23.

Tax benefits

1-The IRC taxable persons provided for in paragraph 1 of the preceding Article shall be granted the

following tax benefits:

a) Deduction for collection of IRC ascertained under the terms of paragraph a) of Article 90 (1) of the

IRC Code, of the following importances of the relevant applications:

1) In the case of investments made in eligible regions listed in the Annex

III to this Code, which of it is an integral part:

i) 25% of the relevant applications, with respect to the investment realized until

to the amount of € 5000 to 000.00;

ii) 10% of the relevant applications, concerning the part of the investment

carried out that exceeds the amount of € 5000 to 000.00;

2) In the case of investments in eligible regions listed in Annex IV to the

this Code, which of it is an integral part:

i) 15% of the relevant applications, with respect to the investment realized until

to the amount of € 5000 to 000.00;

ii) 10% of the relevant applications, concerning the part of the investment

carried out that exceeds the amount of € 5000 to 000.00;

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3) In the case of investments in eligible regions listed in Annex I to

this Code, 10% of the relevant applications;

b) Exemption or IMI reduction, for a period up to 10 years from the year of acquisition

or construction of the immovable, regarding the buildings used by the promoter in the

scope of the investments that constitute relevant applications, pursuant to the

article 24 of this Code;

c) Exemption or reduction of Municipal Tax on the onerous Transmissions of

real estate (IMT) in relation to the acquisitions of buildings constituting applications

relevant in the terms of Article 24 of this Code;

d) Exemption from Selo Tax regarding the acquisitions of buildings that constitute

relevant investment.

2-A deduction referred to in point a) of the previous number is effected in the settlement of

IRC concerning the period of taxation in which the applications are carried out

relevant, with the following limits:

a) In the case of investments made in the taxation period of the beginning of

activity and the following two periods of taxation, except when the company

result of spin-off, up to the competition of the total IRC collection ascertained in each

one of those periods of taxation;

b) In the remaining cases, up to the competition of 50% of the IRC collection ascertained in each

period of taxation.

3-When the deduction referred to in the preceding paragraph may not be effected in full

for insufficiency of collection, the importance not yet deduced can be in the liquidations

of the following 10 periods of taxation, under the same conditions set out in the

previous number.

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4-The tax benefits provided for in the previous figures must respect the limits

maximum resulting from the application of the national map of state aid with purpose

regional for the period 2014 a to 2020, approved by the European Commission in XXXXXX,

published in Annex II to this Code.

5-Should investments benefit from other state aid, the calculation of limits

referred to in the preceding paragraph shall take into account the total amount of aid of

state with regional purpose granted to the investment in question, arising from

all sources.

6-In case the overall amount of the relevant investment realized in a given period of

taxation exceeds relevant applications € 50000 000.00, the applicable maximum limits

are subject to the adjustment set out in paragraph 20 of Article 2 of the RGIC.

Article 24.

Exclusivity of tax benefits

1-Without prejudice to the provisions of the preceding paragraph, the RFAI is not cumulable with any

financial incentives or tax benefits of the same nature, relatively to the same

relevant applications, provided for in this or other legal diplomas.

2-The RFAI is cumulable with the deduction for retained and reinvested profits, since, and in the

measure in which, the applicable maximum limits are not exceeded in the

n. paragraphs 4 a to 6 of the previous article.

Article 25.

Ancillary obligations

1-A deduction provided for in paragraph a) of Article 23 (1) is justified by document to

to integrate the tax documentation process referred to in Article 130 of the Code of the

IRC, which discriminately identifies the relevant applications, the respect amount and

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other elements deemed relevant.

2-From the tax documentation process pertaining to the exercise of the deduction must still

record document that evidenced the calculation of the tax benefit as well as documents

proof of the conditions of eligibility provided for in Article 22 para.

3-Under European legislation, it is notified to the European Commission the granting of

tax benefits that fulfil the conditions set out in that legislation,

specifically those in which the adjusted amount of aid, calculated in accordance with

with the mechanism set out in paragraph 20 of Article 2 of the RGIC, exceeds the threshold

of notification provided for in paragraph 20 (n) of the OAR.

4-The procedures for monitoring the verification of conditions for the implementation of the scheme

of tax benefits provided for in this chapter are defined by joint dispatch

of the members of the government responsible for the areas of finance and the economy, which

defines in particular the terms for the sharing of information between the bodies

public with competencies in the allocation of tax or financial incentives covered

by the European rules on state aid.

CHAPTER IV

Deduction for retained and reinvested earnings

Article 26.

Object

Deduction for retained and reinvested profits (DLRR) constitutes a scheme of incentives

investment tax in favour of micro, small and medium enterprises under the

RGIC.

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Article 27.

Scope of subjective application

They can benefit from DLRR the passive subjects of IRC residing in Portuguese territory,

as well as non-resident taxable persons with stable establishment in this territory,

that they exercise, in the main title, an activity of a commercial, industrial or agricultural nature,

that fulfil, cumulatively, the following conditions:

a) Be micro, small and medium enterprises, considered to be such in the terms

provided for in the Annex to Decree-Law No 372/2007 of November 6, as amended by the

Decree-Law No 143/2009 of June 16;

b) Have regularly arranged accounting, according to the

accounting normalization and other legal provisions in force for the respect

activity sector;

c) Your taxable profit is not ascertained by indirect methods;

d) Have the tax and contributory situation regularised.

Article 28.

Deduction for retained and reinvested earnings

1-The taxable persons referred to in the previous article may deduct from the IRC collection, in the

periods of taxation beginning on or after January 1, 2014, up to 10% of the

retained earnings that are reinvested in relevant applications pursuant to Article 29,

within two years counted from the end of the taxation period to which

match the retained earnings.

2-For the purposes of the deduction provided for in the preceding paragraph, the maximum amount of profits

retained and reinvested, in each taxation period, is € 5000 to 000.00, per subject

passive.

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3-A The deduction provided for in the preceding paragraph is made, under the terms of the paragraph c ) of the Article 2 (2)

90. of the IRC Code, up to the competition of 25% of the IRC collection.

4-Applying for the special scheme of taxation of groups of companies, the deduction

provided for in paragraph 1:

a) Takes effect to the amount ascertained under the terms of the a ) of Article 90 (1) of the

IRC Code, based on the group's colletable matter;

b) It is made up to 25% of the amount mentioned in the preceding paragraph and may not surpass,

in relation to each society and for each taxation period, the limit of 25% of the

collection that would be ascertained by the society that carried out the relevant applications in case

do not apply to the special taxation regime of groups of companies.

Article 29.

Relevant applications

1-Considering "relevant applications", for the purposes of this regime, fixed assets

tangible, acquired in a state of new, with the exception of:

a) Land, save in the case of the purpose of the exploitation of mining concessions,

natural and nascent mineral waters, quarries, barretters and areers in projects

of extractive industry;

b) Construction, acquisition, repair and extension of any buildings, save when

affections to productive or administrative activities;

c) Light passenger or mixed cars, pleasure boats and touring aircraft;

d) Articles of comfort or decoration, save hotel equipment affection for exploration

tourist;

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e) Assets affections to activities in the framework of concession or partnership agreements

public-private concluded with public sector entities.

2-It is considered "investment carried out in relevant applications" the corresponding

additions, verified in each period of taxation, of tangible fixed assets and well

o what, having the nature of tangible fixed asset and not by saying respect to advances, if

translate into additions to the ongoing investments.

3-For the purposes of the preceding paragraph, do not consider the additions of assets that result from

transfers of ongoing investments.

4-In the case of assets acquired in financial leasing scheme, the deduction to which it relates

the preceding Article 1 (1) is conditional on the exercise of the option of purchase by the subject

liability within five years counted from the date of the acquisition.

5-The relevant applications in which the reinvestment of retained earnings is realized

must be detained and accounted for in accordance with the rules that determined their

eligibility for a minimum period of five years.

6-When the onerous transmission of the assets in which the assets are realized occurs

reinvestment of retained earnings before the deadline specified in the number

previous, the taxable person must reinvest, in the same period of taxation or in the

next taxation period, the respect value of achievement in relevant applications

in the terms of this article, which must be held at least for the period

needed to complete that deadline.

Article 30.

Non-cumulation

1-Without prejudice to the provisions of the following number, the DLRR is not cumulable, relatively

to the same eligible applications eligible, with any other tax benefits to the

investment of the same nature.

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2-A DLRR is cumulable with the contractual benefits regime and with the RFAI, in the

terms and conditions laid down in Articles 13 and 25, respectively, respectively.

Article 31.

Special reserve for retained earnings and reinvested

1-The taxable persons who benefit from the DLRR shall proceed to the constitution, in the

balance sheet, and special reserve corresponding to the amount of retained earnings and

reinvested.

2-A Special reservation referred to in the preceding paragraph shall not be used for

distribution to the partners before the end of the fifth financial year subsequent to that of their constitution,

without prejudice to the other required legal requirements.

Article 32.

Other ancillary obligations

1-A The deduction provided for in Article 38 is justified by document to be integrated into the

tax documentation referred to in Article 130 of the IRC Code, which identifies

discriminates against the amount of retained and reinvested profits, the relevant applications

in relevant applications, the respect amount and other elements considered

relevant.

2-A accounting of IRC taxable persons of DLRR recipients should evidence the

tax that would cease to be paid as a result of the deduction referred to in Article 38,

upon mention of the corresponding value in the annex to the balance sheet and the demonstration of

results on the exercise in which the deduction takes place.

Article 33.

Sanctionatory standard

Without prejudice to the provisions of the General Regime of Tax Infractions:

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a) In case of failure to comply with the provisions of paragraph c ) of Article 22 (4), is

added to the IRC concerning the period of taxation in which the taxable person

divested the subject goods from the investment the tax that ceased to be liquidated in

virtue of the present regime, plus the corresponding compensatory interest

majored by 10 percentage points.

b) The non-concretization of the entire investment in the terms provided for in the article

29. until the expiry of the two-year period provided for in Article 28 (1) implies the

return of the tax amount that is no more than settled in the part

corresponding to the amount of non-reinvested profits, to which it is added to the

amount of tax payable pertaining to the second following tax period,

increased by the corresponding compensatory interest majorly at 15 points

percentage;

c) Failure to comply with the provisions of paragraphs 4, 5 or 6 of Article 29 implies the devolution

of the amount of tax that is no less settled in the part corresponding to the

assets for which the option of purchase is not exercised or that are

passed before the five-year period has elapsed, to which it is added to the

amount of tax payable pertaining to the period in which they check these

facts, plus the corresponding compensatory interest majorities in 15

percentage points;

d) The non-constitution of the special reserve pursuant to Article 31 (1) implies the

return of the tax amount that is no less than settled, to which it is

added to the amount of tax payable pertaining to the second period of

next taxation, plus the corresponding compensatory interest

majored by 15 percentage points;

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e) Failure to comply with the provisions of Article 31 (2) implies the devolution of the

amount of tax that is no less than settled corresponding to the part of the

reservation that is used for distribution to the partners, to which it is added to the

amount of tax payable pertaining to the second following tax period,

increased by the corresponding compensatory interest majorly at 15 points

percentage.

CHAPTER V

System of tax incentives in research and business development

Article 34.

System of tax incentives in research and business development

SIFIDE II, the invigoration in the taxation periods from 2013 a to 2020, processes in the terms

of the following articles.

Article 35.

Definitions

For the purposes of the provisions of SIFIDE II, they shall be considered:

a) "Research expenditure", those carried out by the passive subject of IRC with a view to the

acquisition of new scientific or technical knowledge;

b) "Development expenditure", those carried out by the passive subject of IRC through

of the exploitation of results of research work or other

scientific or technical knowledge with a view to discovery or improvement

substantial raw materials, products, services or manufacturing processes.

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Article 36.

Relevant applications

1-Considerable deductible the following categories of expenditure, as long as they refer to

research and development activities, as defined in the previous article:

a) Acquisitions of tangible fixed assets, to the exception of buildings and land, provided that

created or acquired in a new state and in the proportion of their affectation to the realization

of activities of I &D;

b) Expenditures with staff with minimum literate qualifications of level 4 of the Table

National of Qualifications, directly involved in I &D; s tasks;

c) Expenditure on the participation of leaders and cadres in the management of institutions of

I &D;

d) Operating expenses, up to a maximum of 55% of the expenditure on staff

with minimum literate qualifications of level 4 of the National Framework of

Qualifications directly involved in R&D tasks accounted for in title of

remunerations, wages or salaries, relating to the exercise;

e) Expenses relating to the hiring of R&D activities from public entities

or beneficiaries of the status of public utility or entities whose suitability

in research and development is recognized by dispatching the

members of the Government responsible for the areas of the economy, innovation, the

science, technology and higher education;

f) Participation in the capital of R&D institutions and contributions to funds from

investments, public or private, aimed at financing dedicated companies

especially R&D, including financing of the valorisation of its results,

whose suitability for research and development is recognised

by dispatching members of the Government responsible for the areas of the economy, of the

employment, education and science;

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g) Costs with registration and maintenance of patents;

h) Expenditure on the acquisition of patents that are predominantly intended for

realization of I &D; activities;

i) Expenses with audits of I &D;

j) Expenses with demonstration actions that arise from supported R&D projects.

2-Without prejudice to the provision of ( and ) of the previous number, are not considered

any expenses incurred in the framework of projects carried out solely by

account of third parties, notably through contracts and provision of R&D services.

3-A point h ) of paragraph 1 shall only apply to micro, small and medium-sized enterprises, such as

defined in Commission Recommendation No. 2003 /361/CE of the Commission of May 6, 2003.

4-[ Revoked ].

5-The expenses referred to in paragraph j ) of paragraph 1 are only eligible when they have been

previously communicated to the entity referred to in Article 39 (1).

6-The expenses referred to in paragraph h ) of paragraph 1, when they relate to staff with

minimum literate qualifications of level 8 of the National Qualifications Framework, are

considered in 120% of their quantitative.

Article 37.

Scope of the deduction

1-The taxable persons of IRC residing in Portuguese territory who exercise, by title

principal, an activity of an agricultural, industrial, commercial and service nature and the non

residents with stable establishment in that territory can deduct from the amount

ascertained in the terms of Article 90 of the IRC Code, and up to its competition, the value

corresponding to expenditure on research and development, in the party that does not

has been the object of financial comprised of the state the lost fund, carried out

in the periods of taxation with commencement between January 1, 2013 and December 31 of

2020, in a double percentage:

a) Base rate-32.5% of the expenses incurred in that period;

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b) Incremental rate-50% of the addition of the expenditure incurred in that period

in relation to the simple arithmetic mean of the two previous exercises, up to the limit

from € 1500 to 000.00.

2-For IRC passive subjects that are SMEs according to the constant definition

of Article 2 of the Decree-Law No 372/2007 of November 6, as amended by the Decree-

Law No. 143/2009 of June 16, which has not yet completed two exercises and which does not

have benefited from the incremental rate set out in the b ) of the previous number, apply a

majority of 15% at the base rate set out in the a ) of the previous number.

3-A deduction is made, pursuant to Article 90 of the IRC Code, in the settlement

concerning the period of taxation mentioned in the preceding paragraph.

4-The expenses that, by insufficiency of collection, cannot be deducted in the exercise in

which have been carried out can be deducted up to the eighth immediate exercise.

5-For the purposes of the provisions of the preceding paragraphs, when in the year of commencement

of the benefit occurs change from the taxation period, should be considered the period

annual that starts that year.

6-[ Revoked ].

7-To the taxable persons who rearrange themselves, as a result of acts of concentration such

as defined in Article 73 of the IRC Code, the provisions of paragraph 3 of the article shall apply.

15. of the Status of Tax Benefits.

Article 38.

Conditions

They can only benefit from the deduction referred to in the previous article the taxable persons

of IRC that cumulatively fill the following conditions:

a) Your taxable profit is not ascertained by indirect methods;

b) Do not be debtors to the State and the social security of any contributions,

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taxes or contributions, or have your payment duly secured.

Article 39.

Ancillary obligations

1-A deduction referred to in Article 37 shall be justified by a statement of proof,

to be required by the interested entities, or proof of the submission of the application for issuance

of this statement, that the activities exerted or to exercise correspond effectively

research or development actions, of the respective amounts involved, of the

calculation of the addition of expenditure in relation to the average of the previous two financial years and of

other elements deemed pertinent, issued by designated entity by dispatch

of the member of the Government responsible for the areas of the economy and employment, to be integrated

in the process of tax documentation of the taxable person referred to in Article 130 of the

IRC Code.

2-In the process of tax documentation of the taxable person shall also appear

document that evidenced the calculation of the tax benefit, as well as document

proof that the condition referred to in the paragraph is fulfilled. b ) of the article

previous, with reference to the month prior to the delivery of the periodic declaration of

income.

3-The entities interested in resorting to the system of tax incentives provided in the

this chapter should submit applications by the end of the month of July of the year

following that of the exercise, no applications being accepted for years prior to

that period of taxation

4-The entities interested in resorting to the system of tax incentives provided in the

this chapter should make available the information requested by the

entity referred to in paragraph 1 and accept to submit-if to the technological audits that come to

be determined.

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5-The Ministry of Economy, through the entity referred to in paragraph 1, communicates by way of

electro to AT, up to the end of the month of February each year, the identification of the

beneficiaries and the amount of expenditure deemed eligible to be reported to the year

previous to that of communication.

6-The entities interested in resorting to the system of tax incentives provided for in the

this chapter is compulsorily subjected to a technological audit by the

entity referred to in paragraph 1 at the end of the duration of the projects.

7-A The supporting statement provided for in paragraph 1 constitutes an administrative decision for

effects of the provisions of Article 122 (3) of the IRC Code.

Article 40.

Accounting obligations

Accounting for taxable persons of IRC beneficiaries of this scheme shall give expression

to the tax that would cease to be paid as a result of the deduction referred to in Article 37.

upon mention of the corresponding value in the annex to the balance sheet and the demonstration of

results on the exercise in which the deduction takes place.

Article 41.

Exclusivity of the benefit

The deduction referred to in Article 37 is not accumulatable, relatively to the same

expenses, with tax benefits of the same nature, provided for in this or other diplomas

legal.