The Accounting Reflection of the Investment’s Tax Benefits

Abstract

Purpose: The central objective is therefore to explain the tax benefits for investment and their reflection in the rendering of accounts, by understanding the broad concept of tax benefits, understanding the diversity that exists, with a particular focus on effectively demonstrating their applicability.
 
 Theoretical Framework: In view of the Portuguese economic context, the government has systematically created new programs and adopted tax measures aimed at granting tax benefits to promote the growth and economic development of companies. According to Teixeira (2008), the legislator establishes tax benefits with the aim of protecting the environment, encouraging savings, fostering employment and vocational training, preserving culture and cultural heritage, making incentives in tax systems crucial. In Portugal there are various types of tax benefits, such as income tax, tax deductions, investment tax and others. There are around 600 tax benefits that you can take advantage of if you consider all the conditions for their use.
 
 Design/Methodology/Approach: In this research, the tax benefit being analyzed will be investment, due to its importance in the business world and the complexity associated with it, making it an important instrument in terms of promoting competitiveness, supporting investment and, consequently, the economy of countries.
 
 Findings: It was possible to conclude that, except for the BFCIP, all the benefits are processed via IRC tax’s deduction and can’t be combined with other benefits of the same nature, except for RFAI and DLRR, which can be combined with each other if the limits aren’t exceeded.
 
 Research, Practical & Social Implications: This information can be used by any interested entitie to improve current conditions, optimize and enhance the usage of tax benefits for investment.
 
 Originality/Value: Tax benefits are a hot topic in the business world and beyond, given that they are a special tax regime that allows companies to have a tax advantage or relief compared to the normal one, helping them to have a lower financial impact by bearing less tax.