Lei do bem (Law for the Common Good): Accounting plays an essential role in tax benefits

Accounting support is essential to ensure compliance and the effective use of tax incentives for R&D&I

By Marluci Azevedo

Law No. 11,196 of 2005, known as the “Lei do Bem,” is Brazil’s primary instrument for promoting Research, Development, and Technological Innovation (RD&I), offering companies the opportunity to take advantage of attractive tax incentives.

While countless companies “self-fund” technological advancements, competitors are already adopting the practice of sharing this investment with the government, leveraging the provisions of the Lei do Bem. This practice can generate significant tax savings.

However, there are requirements that must be carefully met by those who wish to benefit from it. It is necessary to build a well-structured path, following criteria and definitions established by the legislation, and to provide solid evidence to reap the benefits of this resource.

This is where Accounting comes in, as it must support cost control and the required accounting and tax documentation, without which the company cannot meet the requirements and achieve actual tax reductions.

Who is eligible

Eligible legal entities are those that:

• are taxed under the Actual Profit regime;
• reported taxable income for the fiscal year;
• can demonstrate compliance with tax obligations to qualify for the incentives (certificate of no tax liability);
• make investments in technological research and innovation projects.

R&D activities do not necessarily have to be related to the company’s core business. It is not innovation itself that qualifies for tax benefits, but rather research and technological development. Any innovative product may be evaluated for eligibility.

Accounting for the Lei do Bem

Below, learn how accounting supports processes related to the Lei do Bem:

Entry in LALUR

The amount of the additional deduction must be entered as “Additional Deductions - Innovation Incentives under Law 11,196” in the additions and exclusions section of the IRPJ and CSLL tax ledger.

Information in the ECF

Entries must be reported in the Tax Accounting Ledger (ECF) within the legal deadline.

Documentation

Detailed records of expenditures must be retained for at least 5 years (documentation provided by the specialized firm).

Identifying Opportunities

The Accounting Department should monitor innovation-related expenses and guide clients in assessing tax benefits.

Tax Benefits Overview

Additional exclusion rates:

How to Comply with the Lei do Bem

Companies wishing to take advantage of these incentives must meet certain basic requirements:

• First, the company must identify its R&D and innovation projects and verify that they meet the eligibility criteria;;
• Another step is to document all project expenditures (labor costs, materials, and others);
• The next step is to submit the Form for Information on Technological Research and Technological Innovation Development Activities (FORMP&D) to the Ministry of Science, Technology, and Innovation (MCTI);

The form may be submitted by August 31 of the year following the calculation of the incentives, in accordance with the rules of MCTI Ordinance No. 9,563/2025.

• Entries must be recorded in Lalur/ECF (additional deduction in the calculation of IRPJ/CSLL).

How DPC Can Help

The specialized services provided by Domingues e Pinho Contadores ensure the adoption of best practices so that your company can take advantage of this and other tax incentives currently in effect, thereby optimizing your tax burden. Contact us for comprehensive accounting support: dpc@dpc.com.br.