Brazil has an aggressive set of policies to promote the software sector as one of Brazil’s main targets for investment and development. Brazil offers many tax incentives for private R&D similar to those in developed countries. The most prominent financial incentives are:

• Reduction in the industrial products tax payable on equipment or supplies purchased for use solely for IT software and services development

• Accelerated amortization of outlays made for acquisition of intangible goods tied to R&D

• Deduction on income tax due on expenditures on technological and industrial R&D activities

• Deduction as an operating expense of royalty, technical and scientific assistance payments up to 5 percent of net income earned from the sale of goods produced with the technology for which such payments were made, provided that the pertinent transfer of technology agreement is ratified according to the terms of the Industrial Property Code

• Tax-breaks to private R&D are provided by at least five different laws

• Since 2000, fourteen sector funds have been created totaling R$846 million. These sector funds have the objective of providing stable public R&D funds. They are disbursed by FINEP, mainly as grants, with diverse objectives, recipients, and duration