CIT
Tax incentive to wage increase
The Tax incentive to wage increase (“Incentivo fiscal à valorização salarial”) will apply when there is an increase in the average annual base salary per worker of at least 4.7% (currently, 5%).
The application of the regime is no longer dependent on the non-increase of the salary range. However, it is now necessary to verify an average increase of at least 4.7% in the annual base salary of workers who earn an amount equal to or less than the company's average annual base salary.
The costs associated with salary increases will now be increased by 200% (currently, 150%), up to a maximum annual amount per worker of five times the National Minimum Monthly Wage (currently, four times).
Thus, the maximum deduction to the taxable profit per worker is set at € 4,350 (currently, € 1,640).
The capitalisation of companies is now (even) more attractive.
Incentive to the Capitalization of Companies (ICE)
ICE will be calculated by applying the average 12-month Euribor rate plus a spread of 2 percentage points (currently, 1.5 percentage points), regardless of the company's size.
It is also foreseen that, in the 2025 tax year, the incentive rate will be increased by 50%, instead of the already foreseen 30%.
PIT
Tax incentive for company recapitalisation
It is proposed to strengthen the incentive for individual investment in company capitalisation, by allowing the deduction, for PIT purposes, of 20% of capital contributions made in cash, to the gross amount of profits distributed by that company or, in the case of the sale of the shareholding, from the balance between the capital gains and losses realized.
This deduction is no longer conditioned by specific requirements related to the company's economic situation, thus applying to most companies.
However, it is foreseen that it will not apply to contributions made to entities subject to the supervision of the Bank of Portugal or the Portuguese Insurance and Pension Funds Supervisory Authority, branches in Portugal of credit institutions, other financial institutions or insurance companies.
It is proposed to exempt from PIT bonuses awarded to workers under certain conditions.
Extension
The following tax benefits provided in the Tax Benefits Code (EBF) are extended until 31 December 2025:
deductions related to partnerships of titles with social impact (Article 19-A);
tax incentives for forestry activities (Article 59-D);
forest management entities and forest management units (Article 59-G);
electrosolar or exclusively electric vessels (Article 59-J).
Additionally, the extraordinary support regime for costs incurred in agricultural production (Article 240 of Law 82/2023, of 29 December) is extended until 31 December 2025.
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