Tax incentives for SMEs’ digital transformation

• Main Author: Dinis, Ana
• Publication Date: 2023
• Other Authors: Lemos, Kátia, Serra, Sara
• Format: Article
• Language: eng
• Source: Repositórios Científicos de Acesso Aberto de Portugal (RCAAP)
• Download full: http://hdl.handle.net/11110/2732
• topic: Tax incentives; Digitalization; Sustainability; Digital Transformation

The incorporation of digital technologies has been one of the greatest pressures felt in companies, due to the widely globalized market, the increase in available technologies and the fact that consumers are now more dynamic and active. Also, the adoption of digital solutions and the use of data will support the transition to a climate-neutral, circular, and more resilient economy. In that context, taxation rules are a valuable tool for government intervention with businesses. To encourage the adherence of companies to the mandatory implementation of new invoicing or accounting technologies, the Portuguese State granted a tax incentive to micro and SMEs that adopted these tools before the deadlines set for their entry into force. This paper relies on an exploratory analysis of the Portuguese micro and SMEs companies that took advantage of the tax incentive under study, in the years 2020 and 2021, also framing this tax incentive in the digital transformation process of companies in their local context. The results reveal that only 373 companies took advantage of this tax incentive. Nevertheless, the value of the tax incentive is positively associated with the average net profit value, the average value of operational income, the average value of turnover and the average value of income tax. This is, from the authors’ point of view, an innovative study, as it brings to discussion the theme of a tax policy designed to promote environmental sustainability, associated with the accounting and tax processes of companies, in the context of digital transformation.