Other tax matters

Tax benefits

Business restructuring derived from restructuring operations or cooperation agreements

The scope of exemptions from IMT, Stamp Duty and administrative fees for restructuring operations or cooperation agreements is extended to entities in general.

Support schemes to transport of passengers and goods

It is proposed that expenses incurred with the acquisition, in the Portuguese territory, of LPG to supply vehicles for the purpose of determining the taxable profit in CIT and Category B of PIT with organised accounting are no longer increased.

Extension

The following tax benefits foreseen in the Tax Benefits Code (“Estatuto dos Benefícios Fiscais” or “EBF”) (that would expire on 1 January 2020) are extended for one year:

• retirement savings account (Article 20);
• external loans and leases of imported equipment (Article 28);
• financial services of public entities (Article 29);
• swaps and loans of non-resident financial institutions (Article 30);
• deposits of non-resident credit institutions (Article 31);
• companies of the national merchant navy (Article 51, letter b);
• regional wine commissions (Article 52);
• managing entities of integrated systems for the management of specific waste (Article 53);
• flows, sports, cultural and recreation communities (Article 54);
• wastelands (Article 59);
• support measures for road transport of passengers and goods (Article 59-A);
• expenses with car sharing and bike sharing systems (Article 59-B);
• expenses with bike fleets (Article 59-C);
• cultural patronage (Article 62-B);
• deductions to the PIT and VAT – transmission of goods and services free of charge (Article 63); and
• VAT - transfers of goods and services free of charge (Article 64).

Celebration of the 500 years of the Circumnavigation

Donations granted by natural or legal persons to the celebration of the circumnavigation by the Portuguese navigator Fernão de Magalhães (“Estrutura de Missão para as Comemorações do V Centenário da Circum-Navegação comandada pelo navegador português Fernão de Magalhães (2019-2022)” are eligible as a tax benefit under the cultural patronage regime.

Portuguese EU Council Presidency Mission

Donations granted by natural or legal persons to the Mission Structure for the Presidency of the Council of the European Union are eligible for patronage regime.

Dubai World Exhibition (2020)

Donations granted by natural or legal persons to the Embassy of Portugal in the United Arab Emirates, for the purposes of the Portuguese participation in the Dubai World Exhibition (2020), are eligible for patronage regime.

World Youth Day

Donations, in cash or in kind, to the Fundação JMJ-Lisboa 2022, which is legal entity responsible for preparing, organising and coordinating the World Youth Day 2022 in Lisbon, are considered as:

• costs for the year, for CIT purposes, corresponding to 140% of the respective total;
• expenditure, for PIT category B purposes, in an amount corresponding to 140% of the respective amount, and, in all other cases, a 30% tax credit of donations are deductible for PIT purposes. These benefits last until the conclusion of the event.

Portuguese sovereign debt issued in the Chinese market

The PIT and CIT exemptions on interest from Portuguese sovereign debt issued in renminbi in the Chinese internal debt market are maintained in 2020.

This exemption applies when holders or subscribers are non-residents without a permanent establishment in Portugal to which the loan is allocated, except if resident in tax havens. The information regarding the tax residency of the beneficiary should be demonstrated upon subscription with the competent public institute.

Associations representing families

Associations representing families no longer have benefits related with taxes and charges as applicable to public utility entities.

Legal regime of Group Agricultural Companies

Benefits and exemptions applicable to these entities have been revoked.

Levies

Audiovisual levy

There was no update on the monthly amounts of the audiovisual levy.

Bank levy

The bank levy is maintained in 2020.

Pharmaceutical industry levy

The extraordinary pharmaceutical industry levy is maintained in 2020.

Extraordinary levy on the energy sector (CESE)

The CESE in maintained in 2020.

The Government is granted authorization for a 90 day period, to amend the CESE regime. Amendments shall cover the rules for its application or the reduction of the respective rates in view of the reduction of the tariff debt of the National Electric System and corresponding reduction of the need to finance social and environmental policies of the energy sector.

Extraordinary levy on suppliers of the industry of medical devices of the National Health System

It is approved a regime that creates an extraordinary levy on National Health System (“SNS”) suppliers of medical devices including for in vitro diagnosis (hereafter devices).

The levy applies to suppliers, either producers, intermediaries, wholesalers or retailers, that invoice entities of the SNS for the supply of devices and respective accessories. The regime shall not apply to enterprise-class devices used in treatments and diagnosis.

The levy applies on the total amount of the acquisitions of devices made by SNS entities (VAT excluded), at rates varying from 1.5% and 4% depending on the annual amount of acquisitions.

Legislative authorization – Levy on single purpose packages

The Government is granted authorization to create a levy on single purpose packages, aiming at promoting a circular economy. This levy shall tax single purpose packages containing ready meals including take away and home delivery meals, aiming at a positive discrimination of packages that include recycled materials.

The taxpayers shall be the economic agent that produces or imports the packages.

The legislative authorization foresees the impact of the repercussion of the levy on the final consumer; the levy must be included as part of the price, mandatorily discriminated in the invoice issued.

Gambling and Betting

Legal regime of online gambling and betting – Special tax on online gambling (IEJO)

Several amendments have been introduced to the applicable rates:

• gambling activities: single rate of 25%;
• odds-type sports bets: single rate of 8%, except in case of commissions charged by the operator which represent the only direct income from odds-type sports bets in which gamblers play against each other (in which case the rate is 35%);
• horse bets: single rate of 25%;
• odds-type horse bets: single rate of 8% %, except in case of commissions charged by the operator which represent the only direct income from odds-type horse bets in which gamblers play against each other (in which case the rate is 35%).

There is a proposal to reassess the tax regime of online gambling and betting within a maximum of 2 years.

Legal regime of exploitation and territorial-based horse betting

The charitable organization Santa Casa da Misericórdia de Lisboa is no longer subject to the gambling tax, in what concerns the exploitation of territorial-based horse betting.

Tax Justice

Interested parties

It is now mandatory to call any interested parties (who may be directly affected by the outcome of the judicial claim) to participate in the legal action, insofar as they can be identified, namely in the administrative process.

Seizure of bank accounts

The electronic mechanism for preventing simultaneous bank accounts’ seizures through the same act shall continue to apply whenever the amount already seized totals the debt due.

Offsetting of tax debts

Micro and small companies can benefit from offsetting of tax debts with overdue and unpaid tax credits.

Decriminalisation of non-submission of the return

For Social Security purposes, no penalty will be imposed for failure to submit, during 2019, the quarterly income returns of self-employed workers.