By Ana Caroline Ferreira and Mariana Brambilla Bertasso

Recently, Decree No. 12,175/2024 and Interministerial Ordinance MDIC/MF No. 74/2024 were published, regulating the application of differentiated quotas for accelerated depreciation, as established by Law No. 14,871/2024. Since the approval of this law in May 2024, there had been anticipation for the decree to clarify the economic activities and sectors eligible for the special accelerated depreciation regime.

The new decree focuses primarily on presenting an annex listing the economic activities of acquiring legal entities that will be covered by the differentiated conditions for accelerated depreciation.

Accelerated Depreciation and Law No. 14,871/2024

Accelerated depreciation is a tax mechanism that allows companies taxed under the actual profit regime to benefit from faster deductibility of certain asset values, thereby reducing the taxable base for Corporate Income Tax (IRPJ) and Social Contribution on Net Profit (CSLL).

This benefit provides short-term tax relief by advancing deductions, facilitating the renewal and modernization of assets essential to business operations.

Law No. 14,871/2024 established a specific accelerated depreciation program to incentivize the modernization of Brazil’s industrial base. The program authorizes differentiated depreciation quotas for new machinery, equipment, devices, and instruments, provided they are used in predefined economic activities.

Who Can Benefit?

Only companies that meet the following cumulative criteria are eligible for accelerated depreciation:

• Are taxed under the actual profit regime;
• Have acquired new fixed assets listed in the Annex to MDIC/MF Ordinance No. 74/2024 and identified by TIPI (IPI Table) codes;
• Have their primary activity’s CNAE listed in Annex I of Decree No. 12,175/2024;
• Have been previously authorized by the Special Secretariat of the Federal Revenue of Brazil, following the online procedure through the e-CAC system;
• Meet the legal requirements for enjoying tax benefits, such as:
  • Federal tax compliance;
  • No convictions resulting from administrative misconduct actions;
  • No outstanding debts with federal agencies or entities;
  • No criminal or administrative sanctions due to harmful activities or environmental violations;
  • No debts with the FGTS; and
  • No active records in the National Register of Punished Companies (CNEP) for acts harmful to public administration, domestic or foreign.

How Does It Work?

Accelerated depreciation allows the depreciation of assets incorporated into the acquirer’s fixed assets, with the following limits:

• Up to 50% of the asset’s value in the year it is installed or put into service;
• Up to 50% of the asset’s value in the year following installation or when it is put into service.

If any remaining balance of the asset’s value is not depreciated in the year of installation or service, it can be depreciated in subsequent years.

As accelerated depreciation directly impacts IRPJ and CSLL calculations, the decree imposes a maximum annual tax exemption limit based on the company’s economic activity.

What is the Eligible Acquisition Period?

The benefit applies exclusively to new assets acquired between September 12, 2024, and December 31, 2025, provided the other eligibility requirements are met. Only assets that have been effectively acquired, as evidenced by the issuance of the corresponding invoices, are eligible.

Advantages

• Reduction in taxable profit: By applying accelerated depreciation, the company reduces its IRPJ/CSLL tax base, resulting in tax savings;
• Increased cash flow: Larger deductions in the early years provide cash relief, allowing the saved tax amount to be reinvested in the business;
• Encouragement of modernization: This incentive drives the acquisition of new equipment, promoting the modernization of the industrial base and increasing competitiveness.

It is essential for companies to verify if they meet the eligibility criteria and take advantage of this incentive by December 2025. The Tax Advisory Department at Marins Bertoldi Advogados is closely monitoring developments on this subject and is available to address any questions and explore how this applies to each specific business.