Supplementary Budget 202028 July, 2020
Law No. 27-A/2020 of 24 July was published, which makes the second amendment to Law No. 2/2020 of 31 March (State Budget for 2020) and the amendment of various diplomas.
Among the various amendments foreseen in the said law, the following tax measures should be stressed out:
- Special regime for deduction of tax losses
Tax losses generated in 2020 and 2021 by taxpayers may be deducted from the taxable profits of one or more of the 12 subsequent tax periods, regardless of whether the taxpayers are Small or Medium Enterprises (SMEs) or not.
The measure also increases the deduction limit to 80% (currently 70%).
- Extraordinary limitation of payments on account under PIT and CIT of 2020
Corporate Income Tax taxpayers see the introduction of an extraordinary limitation on payments on account for 2020, which varies based on the turnover reduction.
As for Personal Income Tax, taxpayers who are holders of Category B income and, despite being obligated, do not pay the first and second payments on account, may regularize the total amount owed until December 2020, without any burden or charge.
- Early return of special unused payments on account
Cooperatives or micro, small and medium-sized enterprises may request the full reimbursement of the amount special payments on account which has not been deducted up to the year 2019.
- Incentives to SME restructuring in 2020
It is foreseen the disregard, during the first three tax periods within the sphere of the acquiring company, of the limit for the deduction of tax losses of the merging companies transferred in the course of the merger operation, provided that certain requirements are met cumulatively, as well as the disregard of the state surtax in the first 3 tax years and at least for 3 years
- Special regime of transferability of tax losses
A special regime was established, allowing the transfer of tax losses generated by SMEs and the respective deduction in the sphere of the acquiring company, if the SME is acquired by 31 December 2020, has been created.
For this purpose, only SMEs that, in 2020, have come to be considered as companies in difficulty (compared to the situation in the tax period of 2019) are relevant.
- Extraordinary Tax Credit for Investment II
CIT taxpayers who incur in investment expenses materialized in the acquisition of tangible fixed assets, non-consumable biological assets and intangible assets, carried out between July 1, 2020 and June 30, 2021 (for entities whose tax period begins after July 1, 12 months after the beginning of the tax period) benefit from a deduction from the CIT payable amount, corresponding to 20% of investment expenses, whose maximum amount is limited to 5 million Euros.
- Exceptional regime of payment in instalments for tax debts and social security debts
An exceptional regime was introduced for the payment of tax debts relating to tax events that occurred between March 9 and June 30, 2020 and to tax debts and debts of monthly social security contributions due in the same period.
- Additional solidarity on the banking sector
An additional solidarity on the banking sector was introduced, due by credit institutions and branches in Portugal of credit institutions abroad.
- Exclusion of offshore related entities from access to public support
It is established that entities with headquarters or effective management in countries, territories or regions with a clearly more favorable tax regime, as well as companies that are dominated by entities with headquarters or effective management in the same countries, territories or regions, are excluded from public support created under the exceptional and temporary measures in response to the COVID-19 pandemic.
- Unemployment support and severance Grant
A regime has been set up to regulate access to financial support for unemployment benefits and severance grants.