OE2022, IRS reform for youth

&amp;NewLine;<p>The budget proposal of the&amp;rsquo&amp;semi;<a href&equals;"https&colon;&sol;&sol;vivreauportugalconsulting&period;com&sol;budget-de-letat-portugais-2022&sol;" data-type&equals;"post" data-id&equals;"8403">State for 2022<&sol;a> introduces several reforms to the IRS for young people &amp;lpar;IRS Jovem&amp;rpar;&amp;comma; providing that&amp;rsquo&amp;semi;it will be granted automatically&amp;comma; that&amp;rsquo&amp;semi;it will cover income from&amp;rsquo&amp;semi;self-employment and that&amp;rsquo&amp;semi;it will be applied for five years instead of the three years initially planned when the measure&amp;period was launched;<&sol;p>&amp;NewLine;&amp;NewLine;&amp;NewLine;&amp;NewLine;<h3 class&equals;"wp-block-heading">OE2022&amp;comma; IRS reform for young people<&sol;h3>&amp;NewLine;&amp;NewLine;&amp;NewLine;&amp;NewLine;<p>All young people will be eligible&amp;comma; regardless of the salary they earn&amp;comma; since&amp;rsquo&amp;semi;there is no longer an annual income ceiling&amp;period; This involves&amp;rsquo&amp;semi;granting an exemption of 30 &amp;percnt; the first two years of work&amp;comma; 20 &amp;percnt; the following two years and 10 &amp;percnt; the final year&amp;comma; with limits corresponding to 7&amp;comma;5 times the value of the &amp;lpar;IAS&amp;rpar;&amp;comma; 5 times the value of the&amp;rsquo&amp;semi;IAS and 2&amp;comma;5 times the value of the&amp;rsquo&amp;semi;IAS&amp;period;<&sol;p>&amp;NewLine;&amp;NewLine;&amp;NewLine;&amp;NewLine;<p>According to simulations by the consulting firm EY&amp;comma; a young person with a gross salary of 950 euros would pay 1,510 euros in IRS per year&amp;period; With the Young&amp;comma; IRS, he will pay 969&amp;comma;74 euros for the first two years of the&amp;rsquo&amp;semi;application of the&amp;rsquo&amp;semi;exemption&amp;comma; 1&amp;period;149&amp;comma;90 euros the 3rd and 4th years and 1&amp;period;330&amp;comma;06 euros the 5th and last year of&amp;rsquo&amp;semi;application of the measure&amp;period; In total&amp;comma; the difference translates into a saving of 1,981&amp;comma;76 euros&amp;period;<&sol;p>&amp;NewLine;&amp;NewLine;&amp;NewLine;&amp;NewLine;<p>The saving rises to 2&amp;period;521&amp;comma;46 euros if the young person's gross salary is around 1&amp;period;500 euros&amp;period; In this case&amp;comma; instead of an annual tax bill of 3,530&amp;comma;42 euros&amp;comma; they will pay 2,842&amp;comma;75 euros less&amp;rsquo&amp;semi;IRS the first two years &amp;lpar;savings of 687&amp;comma;67 euros&amp;rpar;&amp;comma; 3,071&amp;comma;97 euros the following two years &amp;lpar;458&amp;comma;45 euros less&amp;rpar; and 3,301&amp;comma;20 euros the 5th year &amp;lpar;229&amp;comma;22 euros less&amp;rpar;&amp;period;<&sol;p>&amp;NewLine;&amp;NewLine;&amp;NewLine;&amp;NewLine;<p>L&amp;rsquo&amp;semi;<a href&equals;"https&colon;&sol;&sol;info&period;portaldasfinancas&period;gov&period;pt&sol;pt&sol;apoio&lowbar;contribuinte&sol;folhetos&lowbar;informativos&sol;documents&sol;irs&lowbar;jovem&period;pdf" target&equals;"&lowbar;blank" rel&equals;"noreferrer noopener">IRS Jovem<&sol;a> s&amp;rsquo&amp;semi;is aimed at people aged between 18 and 26 with Category A and B incomes &amp;lpar;respectively dependent and self-employed&amp;rpar;&amp;comma; covering the first five years of&amp;rsquo&amp;semi;obtaining income from work after the&amp;rsquo&amp;semi;year of&amp;rsquo&amp;semi;completion of a course of&amp;rsquo&amp;semi;study equal to or higher than level 4 secondary education of the national qualifications framework&amp;period;<&sol;p>&amp;NewLine;&amp;NewLine;&amp;NewLine;&amp;NewLine;<p>The age limit can be extended up to and including the age of 28 if you have completed a course of study at level 8 of the National Qualifications Framework &amp;lpar;doctorate&amp;rpar;&amp;comma; this is another difference from the current scheme&amp;period;<&sol;p>&amp;NewLine;&amp;NewLine;&amp;NewLine;&amp;NewLine;<p>The measure applies for the first year in which income is earned after completion of the course of study, and for the following four years&amp;comma; provided that the option is exercised up to the maximum age provided for&amp;comma; in consecutive or interpolated years&amp;comma; and that the&amp;rsquo&amp;semi;option is exercised up to and including the taxpayer's maximum age&amp;comma; in consecutive or interpolated years&amp;comma; and provided that the taxpayer's maximum age does not exceed 35 years&amp;comma; inclusive&amp;period;<&sol;p>&amp;NewLine;