Learn about the main tax changes that were introduced by the State Budget Law for 2024 and that have an impact on businesses and companies
Autonomous tax rates
Charges with light passenger vehicles, certain light goods vehicles, motorcycles or motorcycles, are now subject to autonomous taxation at the rates of 8.5%, 25.5% and 32.5%, respectively.
Expenses related to vehicles powered exclusively by electricity are not subject to autonomous taxation, regardless of the cost of acquiring the vehicle, whenever they are allocated to the operation of a public transport service, intended to be rented in the exercise of the taxable person’s normal activity or when their use is qualified as income from dependent work.
Reduced corporate income tax rate for startups
The corporate income tax rate of 17% for the first €50,000 of taxable income is reduced to 12.5% in the case of entities qualified as startups, which carry out, directly and as their main activity, an economic activity of an agricultural, commercial or industrial nature, which are qualified as small or medium-sized enterprises or small-mid-capitalization companies.Small Mid Cap).
New products taxed at the intermediate rate
Juices, nectars and carbonated waters or those with added carbon dioxide or other substances will benefit from the intermediate VAT rate (13%).
However, alcoholic beverages and soft drinks are still subject to the 23% rate.
VAT exemption for group explanations
Group explanations are now exempt from VAT under Article 9(11) of the VAT Code, following the example of explanations given individually, which were already exempt from this tax. Applies from 01/01/2024.
The VAT exemption applicable to the transmission of fertilisers, fertilisers, soil improvers and other feed products for livestock, poultry and other animals, when used in agricultural production activities, is extended until 31 December 2024.
During the year 2024, the VAT exemption will include glass bottles used in agricultural production activities, excluding those used in other activities, namely winemaking
The tax benefit applicable to taxpayers between 18 and 26 years of age who are not considered dependents consists of a partial exemption of category A and B income obtained in a period of 5 years, which is now as follows:
- 100% in the first year, up to a limit of 40 times the Social Support Index (IAS);
- 75% in the second year, up to a limit of 30 times the IAS;
- 50% in the third and fourth years, up to a limit of 20 times the IAS;
- 25% in the fifth year, up to a limit of 10 times the IAS.
Tax incentives for scientific research and innovation
Implementation of a new special IRS tax regime, especially aimed at attracting highly qualified people, aiming to foster the development of scientific-industrial research in Portuguese territory.
Annual IRS Statement
It is now mandatory to report information on all sources of income earned in the previous year, namely income subject to withholding taxes not included and income not subject to IRS, when greater than €500, as well as assets held in jurisdictions with a more favorable tax regime.
Reinforcement of the incentive for the capitalization of companies
The incentive for the capitalisation of companies is reinforced through a deduction calculated by reference to the average of the tax period of the 12-month Euribor rate, plus a spread of 1.5%.
SMEs and Small Mid Caps benefit from a more favourable spread of 2% and the amount of the deduction has increased to €4 million (from €2 million previously).
Investment support tax regime
It is established that the salary costs arising from the creation of jobs, when they concern staff with educational qualifications at level 7 or level 8 of the National Qualifications Framework, are relevant applications for the RFAI tax benefit.
Tax incentive for wage appreciation
The salary increases covered by this tax benefit are no longer due to increases determined by a dynamic collective bargaining agreement, and the minimum increase is increased from 5.1% to 5%, above the guaranteed minimum monthly wage.
It is clarified in this tax regime that the salary range is defined by the ratio between the share of the annual fixed remuneration of the 10% of the highest paid workers in relation to the total and the share of the annual fixed remuneration of the 10% of the lowest paid workers in relation to the total.
Temporarily, any type of collective bargaining agreement is now included as a concept of dynamic collective bargaining regulation instrument (IRCT), namely, collective agreement, collective agreement, collective agreement or company agreement, adhesion agreement and arbitration decision in voluntary arbitration proceedings.
Tax incentive for workers’ housing
The exemption from personal income tax and Social Security contributions of income in kind resulting from the use of a permanent dwelling house located in national territory, provided by the employer, for the period between January 1, 2024 and December 31, 2026, is introduced.
The exemption from personal income tax and social security contributions applies up to the limit of the rents provided for in the Rental Support Program.
In terms of corporate income tax, for the purposes of determining the taxable profit of employers, a depreciation rate corresponding to twice that resulting from the table annexed to Regulatory Decree No. 25/2009, of 14 September, in its current wording (may increase from 2% to 4%), will now be applied.
This Employee Housing Tax Incentive Scheme is not applicable to employees who hold a stake of more than 10% of the employer’s share capital or voting rights.
Administrative Management of Human Resources
- National Minimum Wage: as of January 1, 2024, the value of the Guaranteed Minimum Monthly Wage in the national territory is increased to €820.
- Internship allowance (extracurricular professional internships): increases from €608 to €656.
- Social Support Index (IAS) – value is set at €509.26 (in 2023, this value was €480.43).
Subsistence allowances and compensation for the use of own car
The amounts excluded from taxation, as income from dependent work, have been revised:
- Domestic travel for workers: €62.75 (before, €50.20);
- International travel for workers: €148.91 (before, €89.35);
- Travel by car: €0.40 (before, €0.36).
IRS exemption for employee profit sharing
An exemption is established up to the value of a fixed monthly remuneration and with a limit of five times the amount proposed for the RMMG (€4,100), for the amounts attributed to employees as participation in the profits of companies, through a balance sheet bonus. To this end, it is necessary that the entity has carried out the average nominal valuation of the fixed remuneration of the universe of employees in a percentage equal to or greater than 5%, in 2024.
The income exempt from IRS referred to is included for the purposes of determining the rate applicable to the remaining income. This income must be indicated in Annex H (table 4) of Model 3, to determine the IRS rate to be applied to the remaining income included.
A transitional rule is implemented for the adaptation of companies to changes in invoicing, as follows:
- The submission of the SAF-T accounting file to the Tax Authority is applicable to the periods of 2025 and beyond, to be delivered from 2026 onwards. In practice, it gives companies an extra year to prepare for implementation;
- Until December 31, 2024, PDF invoices will still be accepted for all tax purposes.
As of next February, reported to the file for the month of January, the deadline for submission of files will be the 5th, and the transitional period in force in 2023 has ended.
In view of the reduction in the time available for this communication, the most effective solution is the automatic communication of invoices to the Tax Authority by WebService, which must be evaluated with the invoicing program provider.
Exemption from electronic invoices under the Public Procurement Code
The deadline for the obligation of electronic invoicing is extended until 31 December 2024 for micro, small and medium-sized enterprises, as well as for public entities as co-contracting entities.
Electronic payments to the Tax and Customs Authority
All legal persons are now required to pay tax instalments and any other credits to the Tax Authority exclusively by electronic means of payment, as of 01/01/2024.
In this sense, it is no longer possible to make payments in cash or by cheque, and these payments must be made by bank transfer, ATM payment or MBWay.
We believe that this will be a first step on the part of public entities and that the standardization of procedures will also advance to Social Security.
Communication of Inventories
During the month of January 2024, taxpayers are exempt from the obligation to value inventories for December 31, 2023. For the time being, therefore, it is still mandatory to report inventory quantities.
In January 2025, this exemption only applies to taxable persons who are not required to carry out a permanent inventory.
How can Moneris help?
To better understand the impact and applicability of the new measures on your company’s day-to-day operations, enlist the help of Moneris experts in accounting, tax and labor matters.
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If you would like more information or clarification, please contact your Moneris manager or use the usual means of communication: email@example.com| +351 210 316 400.