Law 14.789/2023 represents a significant review in the way the government deals with tax incentives, particularly in relation to ICMS. Previously, many companies took advantage of grants to reduce their tax liabilities broadly. However, with the new legislation, the focus is clearly in encouraging tangible investments such as business expansions or new facilities rather than simply relieving operating expenses.

The complexity of the law is also evident in the approach to interest on equity (JCP). JCP is a financial tool that allows companies to remunerate their shareholders without the tax burden of dividends. The inclusion of certain resources, such as capital reserves and profit reserves, in the calculation of JCP shows an attempt to more closely align tax incentives with the financial practices of companies.

Liabilities regularization and installment option offer companies a clear route to resolve any outstanding issues in a structured way. However, adherence to this process also comes with strict responsibilities and conditions, including the potential for termination if companies do not meet the established terms.

In short, Law 14.789/2023 seeks to bring greater clarity, focus and alignment to tax incentives in Brazil, balancing the need for collection with the desire to promote investments and sustainable economic development.