{"id":9157,"date":"2023-01-09T10:44:38","date_gmt":"2023-01-09T10:44:38","guid":{"rendered":"https:\/\/vivreauportugalconsulting.com\/?p=9157"},"modified":"2023-01-09T10:44:45","modified_gmt":"2023-01-09T10:44:45","slug":"budget-2023-tax-amendment","status":"publish","type":"post","link":"https:\/\/vivreauportugalconsulting.com\/en\/budget-2023-amendement-fiscal\/","title":{"rendered":"State Budget 2023: Tax Amendments"},"content":{"rendered":"<p class=\"wp-block-paragraph\">We've mentioned this to you several times\u2014the <a href=\"https:\/\/vivreauportugalconsulting.com\/en\/taxation-of-cryptocurrency-in-portugal-budget-2023\/\" data-type=\"post\" data-id=\"9081\">Changes Regarding the Taxation of Cryptocurrencies<\/a> were under consideration, as was a reform of the IRS tax brackets. In this guide, you will find the tax changes that were approved by the 2023 budget bill.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Through this guide, we cover all categories, be it cryptocurrency, household income, social security, corporate, IVA, real estate, etc.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">State Budget 2023: Tax Amendments<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Law No. 24-D\/2022, which approves the state budget for the year 2023, was published in the Official Gazette No. 251\/2022, 2nd Supplement, Series I, dated December 30, 2022, and took effect on January 1, 2023.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">The Impact of the 2023 Budget on Households&nbsp;<\/h3>\n\n\n\n<h4 class=\"wp-block-heading\">Individual Income Tax<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Taxation of Income from Cryptoassets<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The concept of crypto-assets is defined as \u00abany digital representation of value or rights that can be transferred or stored electronically using a distributed ledger or similar technology,\u00bb excluding NFTs.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It has also been decided to tax the resulting income at the flat rate of 28%, as provided for in Category G (capital gains), if the crypto-assets in question have been held for less than one year, without prejudice to the option to combine income.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In cases where assets are held for a period of more than one year\u2014with the period prior to the effective date of the 2023 State Budget being taken into account\u2014it is possible to opt for an exemption from individual income tax (IRS).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If this period does not apply, and only in cases where the income derives from transactions between tax residents of the European Union or the European Economic Area, or of countries with which Portugal has concluded a double taxation treaty or an international agreement providing for the exchange of information for tax purposes, the exemption from taxation may also apply if the consideration is in the form of crypto-assets, by attributing to the crypto-assets a receipt equal to the acquisition value of the crypto-assets delivered.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Furthermore, since cryptoassets are defined as a digital representation of value or rights, the cash equivalence rules for other in-kind income will also apply to these items.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>For the purposes of Category B (business and professional income<\/strong>, where applicable, a coefficient of 0.15 is applied to the sale of cryptoassets and 0.95 to mining, assuming that all transactions involving cryptoassets are reported.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Update to Contribution Brackets<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">The IRS tax brackets will be adjusted to a rate of 5.1 %, and at the same time, the rate applicable to the second bracket will decrease from the current 23 % to 21 %, which will have an effect, albeit gradually, on all subsequent brackets.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img data-recalc-dims=\"1\" fetchpriority=\"high\" decoding=\"async\" width=\"506\" height=\"429\" src=\"https:\/\/i0.wp.com\/vivreauportugalconsulting.com\/wp-content\/uploads\/2023\/01\/TABELA_1.1.png?resize=506%2C429&#038;ssl=1\" alt=\"budget, tax, cryptocurrency\" class=\"wp-image-9161\"\/><\/figure>\n<\/div>\n\n\n<h4 class=\"wp-block-heading\">Increase in the deduction starting with the second child<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">It is established that dependent children (the second and subsequent children) \u2014that is, children who meet the criteria for being included in their parents\u2019 household as dependents\u2014who are six years of age or younger will be included in their parents\u2019 annual personal income tax return with greater effect, benefiting, specifically, a deduction of 300 euros and 150 euros (respectively) starting in 2023, instead of the 150 euros and 75 euros in 2022, which will be independent of the age of the first child.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In addition, it is expected that all VAT paid by any household member for the purchase of subscriptions to periodicals (newspapers and magazines), including digital publications, that are subject to a reduced VAT rate, will also be deductible.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">No changes have been made to the other deductions (namely, deductions specific to each category of income\u2014such as the 4,104 euros applicable to employment income, for example\u2014and deductions for general household, health, education, and housing expenses, among others).<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Expansion of Services Under the Youth IRS Program<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">The tax rates applicable to taxpayers covered by the IRS Jeunes program have been raised to 50 % in the first year, 40 % in the second year, 30 % in the third and fourth years, and 20 % in the fifth and final year of the special individual income tax program. The eligibility criteria and respective requirements have not been changed.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Extraordinary Extension of the Return Program<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Although it is not included in the state budget, the \u00abRegressar\u00bb program\u2014as part of the medium-term agreement to improve incomes, wages, and competitiveness\u2014has been extended through 2026.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, the eligibility requirements will need to be reviewed at a later date in order to make the program more attractive to qualified professionals\u2014and, in particular, young people.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Restructuring of Tax Withholding Systems<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">During 2023, monthly disposable income will be aligned with net income after IRS withholding, in order to counteract any potential decline in income that could occur in the event of a pay raise. To this end, a marginal tax rate model will be applied, similar to the one already used in the annual calculation of the IRS payable by taxpayers.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Increase in the IRS-Exempt Food Subsidy<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Also as part of the medium-term agreement to improve incomes, wages, and competitiveness\u2014and specifically for salaried workers\u2014the daily value of the food subsidy that is exempt from personal income tax will be increased to 5.20 euros.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Reduction in Withholding Tax for Home Mortgage Holders<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">IRS taxpayers may ask their employer to withhold tax at a rate immediately below the rate that would result from the general tables if they meet all of the following conditions:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>(i) earn up to 2,700 \u20ac gross per month individually; and&nbsp;<\/li>\n\n\n\n<li>(ii) have a mortgage.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">This measure is intended to increase families\u2019 monthly disposable income, while at the same time reducing the amount of their tax refund (or the amount of tax due) during the annual adjustment of individual income tax, which takes place between April and June of the year following the year to which the income relates.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Change to the Minimum Cost of Living<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">The minimum subsistence allowance will be adjusted based on the Social Support Index (IAS) starting in 2024.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For 2023, as a transition period for the new calculation method, the subsistence level will increase from 9,870 euros to 10,640 euros, which is 14 times the national minimum wage, which will also rise to 760 euros. The approach will be to deduct this amount before calculating income rather than applying it at the end of the tax calculation.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Social Security \u2013 Pension Update<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">In 2023, the <a href=\"https:\/\/www.portugal.gov.pt\/pt\/gc23\/comunicacao\/noticia?i=orcamento-do-estado-para-2023-dotara-portugal-da-estrategia-adequada-para-os-tempos-exigentes\" target=\"_blank\" rel=\"noreferrer noopener\">government<\/a> will increase pensions from 3.53 % to 4.43 %, depending on the value in question.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Specifically, pensions up to 886 euros will increase by 4.43 %, pensions between 886 and 2,659 euros will increase by 4.07 %, and other pensions (which would be adjusted according to the current statutory formula) will increase by 3.53 %.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">The Impact of the State Budget on Businesses<\/h3>\n\n\n\n<h4 class=\"wp-block-heading\">Expenses Related to the Purchase of Social Cards<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">The law provides that expenses incurred for the purchase of transportation tickets for employees shall be included within the scope of social benefit events and shall be treated, for purposes of determining taxable income, as an amount equal to 150%, provided that they meet the general conditions established for such social benefit events, namely that they are of a general nature and do not constitute earned income or, if they do, that it is difficult or complex to allocate them to each individual beneficiary.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Reduced IRC Rate<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">The reduced corporate income tax (IRC) rate of 17% applicable to small and medium-sized enterprises now also applies to small- and mid-cap companies (e.g., fewer than 500 employees) and to the first \u20ac50,000 of taxable income, instead of the current \u20ac25,000.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Transitional Provisions for the Application of the Reduced CIR Rate to Restructuring Transactions<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The law provides for the application of the reduced corporate income tax (IRC) rate of 17% for the two fiscal years following mergers, demergers, asset transfers, and share exchanges occurring between January 1, 2023, and December 31, 2026, during which all taxpayers qualify as a small, medium, or small-to-medium-sized company (Small Mid Cap, e.g., fewer than 500 employees), when, as a result of the transaction, the acquiring company no longer meets the conditions for this classification.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Deduction of Tax Losses<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">The change to the tax loss carryforward rules will no longer be subject to the current time limits, which are twelve subsequent tax periods for micro, small, and medium-sized enterprises and five for other businesses.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Thus, the maximum time limit for deducting tax losses has been eliminated, which means that they can now be deducted from taxable income without a predetermined time limit.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The system of no time limit on the carryforward of tax losses has already been adopted by several European Union member states, namely Italy, Spain, Germany, Austria, Ireland, and Belgium. In contrast, other countries continue to impose time limits on the carryforward of tax losses, such as England, Hungary, Greece, Romania, and France.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Under this amendment, it is established that tax losses will continue to be non-deductible in tax periods in which taxable income is determined using indirect methods, without affecting the deduction in subsequent tax periods\u2014but this time without any time limit.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It also stipulates that the maximum amount of loss deductions will be reduced from 70% to 65%, while maintaining the 10% increase in the limit on the deduction of tax losses incurred in the 2020 and 2021 tax years.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">With regard to the inability to deduct tax losses when there is a change in ownership of more than 50% of the share capital or majority voting rights, this will no longer apply and, consequently, tax losses will continue to be deductible when it can be demonstrated that the transaction did not have tax evasion as its primary objective or as one of its primary objectives, which may be deemed to have been verified in cases where the transaction was carried out for valid economic reasons.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Consequently, in these cases, the ability to carry forward tax losses will no longer depend on filing a request with the tax authorities.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">These changes apply to tax periods beginning after January 1, 2023, as well as to tax losses determined before that date, provided that the period for deducting those losses is still ongoing as of January 1, 2023.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Special Tax Regime for Corporate Groups<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">In order to meet the condition on which the applicability of the special corporate group taxation regime depends\u2014namely, that all income of the companies belonging to the group is subject to the general corporate income tax regime at the highest standard rate\u2014 it is established that when all companies in the group have their registered office and effective management in the same autonomous region and do not have branches, representative offices, agencies, offices, facilities, or any other form of permanent establishment without its own legal personality in another jurisdiction, this provision is deemed to be satisfied when all companies in the group are subject to the highest applicable tax rate in the respective autonomous region.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Profits and losses of a permanent establishment located outside Portuguese territory<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">The period for offsetting profits and losses from a permanent establishment located outside Portuguese territory will now always be 12 tax periods, eliminating situations limited to the previous 5 tax periods.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Limitation on the Deductibility of Financing Costs<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">It is now established that, in the event of a change of more than 50% in the ownership of share capital or voting rights, the right to carry forward excess net financial expenses and the right to carry forward the unused limit may also be maintained when it can be concluded that the primary objective of the transaction was not tax evasion, which may be deemed to be the case when the transaction was carried out for valid economic reasons.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Deduction of Tax Losses by Corporate Groups<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">It is now established that, in the event of a change in a group\u2019s controlling company\u2014and in cases where a group\u2019s controlling company (the new controlling company) acquires control of another group\u2019s controlling company\u2014 the ability to carry forward tax losses incurred in prior tax periods will no longer depend on a request for recognition of economic interest and authorization from the tax authorities, provided that, in this case as well, it is determined that one of the main objectives of the transaction was not tax evasion, which may be deemed to be the case when the transaction was carried out for valid economic reasons.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Deduction of Tax Losses Upon Corporate Restructuring<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">It has been established that the rules governing the deduction of tax losses in connection with corporate reorganizations will follow the general rules for the deduction of tax losses, and that losses incurred prior to the reorganization may be deducted from the taxable income of the company resulting from the reorganization, with no time limit on the carryforward of such losses.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Transferability of Tax Losses in the Event of a Business Merger<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">It is stipulated that the rules governing the transferability of tax losses of merged companies will continue to follow the general rules, with no time limit on carryovers.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Deduction of Losses from Corporate Capital Payments Through the Transfer of an Individual\u2019s Assets<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">The law provides that, upon the transfer of all assets used in the conduct of a commercial or professional activity by an individual to contribute capital to a corporation, the tax losses related to the activity carried out by the individual\u2014which have not yet been deducted from taxable income\u2014may continue to be deducted from the new company\u2019s taxable income up to a maximum of 50% of each such taxable income, and there is no time limit on the carryover.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Simplified Method for Determining the Taxable Amount<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">The law stipulates that income from crypto-assets\u2014excluding income from mining\u2014that is not considered capital income and does not result from the net gain or loss on assets or other increases in asset value, will now be included in determining the taxable amount under the simplified tax regime by applying a coefficient of 0.15.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">With regard to income from mining operations, it has been established that such income will now be used to determine the taxable base under the simplified system by applying a coefficient of 0.95.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Autonomous tax rates<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">All-electric vehicles, which were previously exempt from the tax, will now be taxed at a rate of 10 % when their purchase price exceeds 62,500 euros.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It also stipulates that plug-in hybrid passenger cars\u2014whose batteries can be recharged by connecting to the power grid, have a minimum electric range of 50 km, and have official emissions of less than 50 gCO2\/km\u2014 and passenger cars powered by natural gas for vehicles (NGV) will now be subject to the following rates:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>(a) 2.5 % for vehicles with a purchase price of less than \u20ac27,500; ;<\/li>\n\n\n\n<li>(b) 7.5% for vehicles with a purchase price of 27,500 euros or more but less than 35,000 euros; ;<\/li>\n\n\n\n<li>(c) 15% for vehicles with a purchase price of 35,000 euros or more.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\">Special Tax Benefit to Help Cover Electricity and Gas Costs<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">The extraordinary tax benefit, which provides for the possibility of increasing by 20% the expenses and losses incurred or sustained in connection with the consumption of electricity and natural gas, to the extent that they exceed those of the previous tax period, net of any assistance received under the business liquidity incentive program, has been introduced, Support Program for Gas-Intensive Industries and applies to corporate income tax (IRC) resident taxpayers whose principal activity is commercial, industrial, or agricultural in nature; to non-resident IRC taxpayers with a permanent establishment; and to individual income tax (IRS) taxpayers with organized accounting (Category B).&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is stipulated that this surcharge will apply to the tax period beginning on or after January 1, 2022. Taxpayers engaged in economic activities that generate at least 50% in revenue in the following sector:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>(a) the generation, transmission, distribution, and trade of electricity or natural gas; or<\/li>\n\n\n\n<li>(b) the manufacture of petroleum products\u2014whether refined or derived from waste\u2014and agglomerated fuels.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">It is also established that this additional subsidy may not be combined with other aid or incentives of any kind relating to the same eligible expenses and losses.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It has been established that the tax incentive program for corporate capitalization is not taken into account when calculating the minimum result for the CIR assessment.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Exemption from Withholding Tax on Income Earned by Residents<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">There is no longer an obligation to withhold corporate income tax (IRC)\u2014when it is in the form of an advance payment\u2014on income from intellectual property, when such income is earned by companies whose purpose is the creation, publication, production, promotion, licensing, managing, or distributing works, services, or other content protected by copyright and related rights, including press publications.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Impact of the State Budget on Consumption&nbsp;<\/h3>\n\n\n\n<h4 class=\"wp-block-heading\">Value-Added Tax<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Contrary to what was provided for in Bill No. 38\/XV\/1\u00aa (which did not propose any changes to the rules set forth in the Value-Added Tax Code), Law No. 24-D\/2022, on the State Budget for 2023, introduces certain amendments to the Value-Added Tax Code.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Periodic Reports<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">It has been determined that periodic reports for the month of June (monthly reports) and for the second quarter (quarterly reports) must be submitted by September 20 (instead of August 20).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In fact, following the previous amendment, the deadline for payment of the tax reported by the taxpayer for the month of June (monthly returns) and for the second quarter (quarterly returns) has been extended to September 25 (instead of August 25).&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Exemption Program<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">It is established that the tax exemption applies to taxpayers who, without maintaining or being required to maintain organized accounting records for IRS or IRC purposes, do not engage in import, export, or related activities, nor do they engage in the sale of goods or the provision of services in the recyclable waste and scrap sector, and did not have, during the previous calendar year, gross receipts exceeding \u20ac15,000 (instead of the \u20ac12,500 limit).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In addition, the following taxpayers are also expected to be exempt from the tax: (a) those whose gross sales exceed 10,000 euros but are less than 15,000 euros and who, if taxed, would meet the requirements for inclusion in the small retailer tax regime; (b) those who, having not had a turnover exceeding 15,000 euros during the previous calendar year and the three preceding calendar years, have met the aforementioned conditions.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Goods and services subject to a reduced tax rate<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">The law also modifies various items on the list of goods and services subject to a reduced VAT rate, with a view to clarifying and expanding its scope:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">1.3. 2 \u2013 Canned fish and shellfish (whole, fillets, or pieces; in water, oil, or other sauces; stewed, marinated, stuffed, or similar; in any packaging), with a fish or shellfish content exceeding 50%, excluding smoked fish, swordfish, and sturgeon when dried, salted, or preserved, and egg-based preparations (caviar) (inclusion of references to % fish or shellfish content for the purposes of applying the reduced rate).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">1.4.3 \u2013 Butter, margarine, and vegetable spreads made from vegetable fats, with or without the addition of other products (including margarine and vegetable spreads).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">1.4.9 \u2013 Vegetable-based beverages and yogurts that contain no milk or dairy products, made from nuts, grains, grain-based preparations, fruits, vegetables, or legumes (extension to vegetable-based beverages and yogurts, replacing the previous wording that limited the reduced rate to soy-based beverages and yogurts).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">2.25 \u2013 Building construction contracts and related service contracts where the developers are housing and construction cooperatives, including those undertaken by unions of housing and economic construction cooperatives on behalf of their member cooperatives as part of their statutory activities, provided that the housing units fall under social housing policy, particularly when they comply with the concept and parameters of cost-controlled housing, plus 20%, provided they are certified by the IHRU, I.P., or, in the case of housing developments in the Autonomous Region of Madeira or the Autonomous Region of the Azores, by the IHM or the Azores Regional Housing Directorate, respectively.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">2.31 \u2013 Purchase and repair of bicycles (extension of the reduced tax rate to the purchase of bicycles).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Finally, three items have been added to the list of goods and services subject to a reduced VAT rate, namely&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">2.39 \u2013 Access to live broadcasts of performances and events at theaters, fairs, amusement parks, concerts, museums, movie theaters, or other similar events.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">2.40 \u2013 Supply and installation of local solid-biomass heating systems with a rated thermal output not exceeding 50 kW and solid-biomass boilers with a rated thermal output not exceeding 500 kW, including those in hybrid systems consisting of a solid-fuel boiler, auxiliary heaters, temperature control devices, and solar devices, which have been awarded a European Union energy label corresponding to one of the two highest energy efficiency classes and which comply with the indicative reference values set out in their specific ecodesign requirements.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">2.41 \u2013 Pellets and briquettes produced from biomass.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Stamp duty<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Crypto Assets: Free Transfers<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Stamp duty is levied at a rate of 10 % on transfers, free of charge, of cryptoassets deposited with institutions that have their principal place of business, effective management, or permanent establishment in Portugal.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In this context, it is established that taxable entities are cryptoasset service providers domiciled within the national territory.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In the case of service providers domiciled outside the country, it is stipulated that the parties subject to taxation are the cryptoasset service providers domiciled within the country who have acted as intermediaries in the transactions, or the representatives who must be designated in Portugal for this purpose.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In the absence of deposited monetary assets or crypto-assets, it is also established that they will be subject to tax in the following situations:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In cases of inheritance upon death, when the transferor is domiciled in the country; ;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In the case of other transfers made free of charge, when the recipient is domiciled within the national territory.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Taxable Value of Cryptoassets<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">It is established that the taxable value of crypto-assets is determined by (i) the rules set forth in the Stamp Duty Code, (ii) the official market value, or (iii) the value declared by the head of the household or the beneficiary (close to the fair market value).<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Cryptoassets: Fees and Counterparties<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">It is also stipulated that fees and consideration billed by cryptoasset service providers or through them will now be subject to stamp duty at a rate of 4 % whenever the cryptoasset service provider or the customer is domiciled in Portugal.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">The Deterrent Effect of Consumer Credit<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">The 50 % increase in consumer credit rates will not be maintained.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Exemption for Loans<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is stipulated that the following transactions are exempt from stamp duty, with respect to loans arranged under the legal framework for housing credit and up to the amount of the principal owed: a) a modification of the term that triggers the tax liability, based on the applicable rate differential; b) an extension of the term; c) the signing of a new loan agreement, within the legal framework for housing loans, for the purpose of refinancing the debt.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Law on Alcohol and Alcoholic Beverages<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Taxes on Alcoholic Beverages<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A general increase of approximately 4% has been established for the rates on fermented, still, and sparkling beverages, beer, and intermediate products.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Prices for Spirits<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is estimated that the rates for spirits will be adjusted by approximately 4 %, which will also apply to the Autonomous Region of Madeira.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tax Rates for Sugary Beverages (Non-Alcoholic)<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">An increase in the tax rates on sugary (non-alcoholic) beverages, including concentrates, of approximately 4 %.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Tax on Petroleum and Energy Products<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Partial Reimbursement for Business Diesel and Gas<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The scope of the partial reimbursement mechanism for commercial diesel fuel will be expanded to include (i) public passenger transportation companies and (ii) commercial diesel fuel classified under CN codes 2711 11 00 and 2711 21 00.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">With regard to the reimbursement system, it has been determined that it will be processed on a monthly basis (rather than for each individual delivery) via electronic communication.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Phased Elimination of Harmful Tax Exemptions on Petroleum and Energy Products<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">There are plans to increase\u2014through 2025 (when they will no longer be eligible for the exemption)\u2014 \u2014the tax rates on products such as diesel, heating oil, and natural gas, among others, used for the production of electricity, combined heat and power (CHP), or city gas, both in terms of the PSI and the CO surcharge.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Tobacco Taxes<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">The general adjustment of the rates applicable to all tobacco products, by approximately 4 %, has been finalized.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">The Impact of the State Budget on the Real Estate Market<\/h3>\n\n\n\n<h4 class=\"wp-block-heading\">Municipal Tax on Property Transfers<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tax Exemption for the Purchase of Real Estate Intended for Resale<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Although it was not included in the initial version of the bill, the 2023 state budget includes a change to the requirements for a taxpayer to be considered as normally and habitually engaged in the business of purchasing real estate for resale \u2014and is therefore exempt from IMI on real estate acquisitions made for that purpose. It has been established that this exemption will be granted only if it is proven that the business of reselling real estate has been carried out during the preceding two years (and not just the previous year) and by means of a certificate issued by the competent tax office, which states that, during each of those two years (and not just during the previous year), the properties acquired for this purpose were resold.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Determining the Taxable Value of Cryptoassets<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">For the purpose of determining the amount subject to IMT in payment transactions involving crypto-assets, it is now stipulated that the value of the crypto-asset provided in exchange shall be considered to be the value specified in the deed or contract.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It has also been established that the taxable value of cryptoassets will be determined under the Stamp Duty Code, which, according to the 2023 State Budget, will be calculated in accordance with the following rules and in the order indicated.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>(a) Pursuant to specific rules set forth in this Code; ;<\/li>\n\n\n\n<li>(b) Based on the official quoted price, if any; ;<\/li>\n\n\n\n<li>(c) Based on the value declared by the head of household or the beneficiary, which must, to the extent possible, be close to the market value.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">However, in cases where the Tax and Customs Administration has reasonable grounds to believe that there is a discrepancy between the value declared by the spouse or beneficiary and the market value, it may determine the taxable value based on the market value.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Determination of the Taxable Value of Transactions<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Although not included in the initial version of the bill, the 2023 state budget stipulates that the rule for calculating the taxable base in the case of a real estate exchange will not apply in cases where the property is transferred within one year of the exchange.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Rates<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">The thresholds for the tax brackets subject to the IMT will be increased by 4 %, under the following conditions<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">(a) In the case of the purchase of an urban building or a separate unit within an urban building intended exclusively for permanent residential use, for the following amounts:<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img data-recalc-dims=\"1\" decoding=\"async\" width=\"288\" height=\"225\" src=\"https:\/\/i0.wp.com\/vivreauportugalconsulting.com\/wp-content\/uploads\/2023\/01\/tabela_3.1.png?resize=288%2C225&#038;ssl=1\" alt=\"\" class=\"wp-image-9160\"\/><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\">(b) Acquisition of an urban building or a separate unit within an urban building intended exclusively for residential use, not covered by the preceding cases:<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img data-recalc-dims=\"1\" decoding=\"async\" width=\"307\" height=\"235\" src=\"https:\/\/i0.wp.com\/vivreauportugalconsulting.com\/wp-content\/uploads\/2023\/01\/tabela_2.2.png?resize=307%2C235&#038;ssl=1\" alt=\"\" class=\"wp-image-9159\"\/><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\">It also provides that, in cases involving the exchange of property where the entire property is not transferred, or where partial ownership rights are transferred, or where ownership is separated from such partial rights, the taxable value is subject to the rate corresponding to the total value of the property, taking into account the portion or right transferred.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Municipal Property Tax<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Tax<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Although this was not included in the initial version of the bill, the 2023 state budget it is stipulated that the annual rate\u2014multiplied by three\u2014will not be applied to urban properties that have been vacant for more than one year or to dilapidated properties, if this is due to a disaster or natural calamity.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It also provides for the possibility for municipalities, by resolution of the municipal assembly, to increase the applicable rate to up to 30% for dilapidated urban buildings\u2014defined as those that, due to their condition, do not fulfill their function satisfactorily or endanger the safety of people and property\u2014 unless such an increase is warranted by a natural disaster or calamity.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Vacant buildings located in areas of high urban development pressure<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Although this was not included in the initial version of the bill, in the 2023 state budget, it is established that municipalities, by resolution of the municipal assembly, may set an increase in the rate in effect for the year to which the tax pertains for buildings or parts of buildings located in areas of urban pressure, under the following terms:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>(a) Up to 1,001 TP3T when used for local housing; ;<\/li>\n\n\n\n<li>(b) Up to 25% if, as housing, they are not rented for residential purposes or are used as the taxpayer\u2019s permanent residence.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">However, if the taxpayer is a corporation or another entity treated as such for tax purposes, the surcharge will be increased to 50 %.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is also stipulated that the following surcharges will apply to urban buildings or apartments that have been vacant for more than one year, to dilapidated buildings, as well as to building lots on urban land classified in the municipality\u2019s land-use plan as suitable for residential use and located in areas subject to urban development pressure.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>(a) The prescribed rate of 0.3% to 0.45% is multiplied by six, with an additional 10% added each subsequent year; ;<\/li>\n\n\n\n<li>(b) The maximum value of the aforementioned increase is 12 times the rate ranging from 0.3 % to 0.45 %.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">However, the 2023 state budget stipulates that, with respect to this maximum limit, it may be increased by a resolution of the municipal assembly by<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>(a) 25% when the urban building or self-contained unit is intended for residential use and, during the tax year in question, is not rented out for residential purposes or used as the taxpayer\u2019s own permanent residence; ;<\/li>\n\n\n\n<li>(b) 50% when the taxpayer is a corporation or another equivalent entity.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">The Impact of the State Budget on Cars&nbsp;<\/h3>\n\n\n\n<h4 class=\"wp-block-heading\">Vehicle Tax<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Update on Tax Rates<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Tax rates are adjusted based on the inflation forecast, meaning a 4 % adjustment to all tax rates. Extension of tax exemptions to operating leases of vehicles<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The exemption already granted to vehicles acquired through a leasing arrangement is extended to operating leases, provided that the vehicle\u2019s documentation includes the lessee\u2019s identification.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">One-time Vehicle Registration Fee<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Extension through 2023 of the special reduction in tax rates applicable to vehicles used for business purposes<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is proposed that the extraordinary reduction in the single road tax (IUC) rate, which was scheduled to take effect in 2022 (Law 84\/2021) for commercial vehicles (Category D vehicles), also take effect in 2023. This measure is intended to partially offset the significant increase in the price of diesel fuel.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Update on Tax Rates<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Tax rates for all vehicle categories will be adjusted based on the inflation forecast, i.e., 4 %.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Additional IUC \u2013 Diesel Vehicles<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">The additional IUC tax levied on diesel-powered vehicles, established by Law 82-B\/2014 (OE\/2015), remains in effect.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">The Impact of the State Budget on Investment<\/h3>\n\n\n\n<h4 class=\"wp-block-heading\">Tax Incentives for Wage Increases<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">A tax incentive to increase wages has been introduced, under which, for the purposes of determining the taxable income of corporate income tax (IRC) taxpayers and individual income tax (IRS) taxpayers with organized accounting systems, the costs\u2014recorded as an expense for the fiscal year\u2014corresponding to increases determined by a dynamic collective bargaining agreement (i.e., one concluded less than three years ago), for employees with permanent employment contracts, will now be considered at 150% of the respective amount, subject to certain conditions, particularly regarding the amount of the increase.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, this incentive does not apply in the following two situations:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>(1) aimed at combating wage inequality, for taxpayers whose wage range has increased compared to the previous year; ;&nbsp;<\/li>\n\n\n\n<li>(2) to prevent potential abuse, if the workers in question are members of the employer\u2019s household, are members of legal entities, or hold, directly or indirectly, a stake of not less than 50% of the employer company\u2019s share capital or voting rights.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">It is also expected that this incentive will expire on December 31, 2026.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Tax Treatment of Business Capitalization<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">A new incentive, inspired by the proposed directive on the debt bias reduction allowance (DEBRA), has been introduced. It aims to merge the incentives\u2014now repealed (in OE2023)\u2014for the Conventional Return on Equity and the Deduction for Undistributed and Reinvested Profits.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This new tax regime, designed to encourage corporate capitalization, provides for a deduction equal to 4.5% of \u00abnet increases in eligible equity,\u00bb a term with a legal definition; the deduction is increased by 0.5% if the taxpayer qualifies as a small or medium-sized enterprise or a small mid-cap company\u2014meaning, in these cases, a potential deduction of 5% from the net increases in eligible equity.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Among other requirements, it is established that the deduction may not exceed, for each tax period, the greater of the following limits:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>(i) \u20ac2,000,000; or (ii) 30 % of EBITDA. However, any excess is carried forward to the following 5 years (although the requirement to comply with this limit for each of those years remains).<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">An express exclusion is also provided for taxpayers that qualify as credit institutions, financial companies, or other entities that are legally equivalent to them.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">At the same time, in order to combat potential abusive practices, certain cash contributions that could lead to \u00abdouble dipping\u00bb situations are excluded\u00a0\u201d\u2014namely, in the context of contributions made to form or increase a company\u2019s capital, when such contributions are financed by eligible capital increases within the scope of another entity\u2014or that are difficult to monitor, such as cash contributions by an entity thatis not a tax resident of a Member State of the European Union or the European Economic Area or of another country with which a treaty to avoid international double taxation or a bilateral or multilateral agreement providing for the exchange of information for tax purposes is in force.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Finally, it should be noted that only net increases in eligible equity occurring during tax periods beginning on or after January 1, 2023, are taken into account.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Tax Incentive Program for Investment <\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">In accordance with the amendments to the national map of regional state aid for the 2022\u20132027 period, the RFAI has increased the deduction from taxable income from 25% to 30% for eligible investments of up to 15 million euros in the North, Central, Alentejo, and Autonomous regions.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Special Assistance Program for Electricity and Gas Expenses<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">To mitigate the effects of the current situation, an extraordinary support program has been established that allows for a 20 % increase in additional energy expenses (i.e., expenses and losses related to the consumption of electricity and natural gas, to the extent that they exceed those of the previous tax period, net of any support received).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This surcharge applies to IRC taxpayers (residents and nonresidents with a permanent establishment), as well as to IRS taxpayers with organized accounting practices, but does not apply to activities in which at least 50% of revenue is derived from the production, transmission, distribution, and trading of electricity or natural gas, or from the manufacture of petroleum products and fuel pellets.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This increase applies to the tax year beginning on or after January 1, 2022, with a specific calculation rule for taxpayers who began their business on or after January 1, 2021.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This extraordinary aid may not be combined with other forms of aid or incentives of any kind relating to the same eligible costs and losses, namely any aid received under Decree-Law No. 30-B\/2022, of April 18, which will be deducted when determining the eligible costs or losses.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Extraordinary Support Program for Costs Incurred in Agricultural Production<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">An extraordinary support measure has been established, effective as of January 1, 2022, subject to the rules governing de minimis aid, to mitigate the consequences of the current situation, by increasing by 40 % the costs and losses incurred or borne in the purchase of fertilizers and organic and mineral soil amendments, meals, grains, and seeds, including mixtures, waste and residues from the food industry, any other product suitable for feeding livestock, poultry, and other animals, irrigation water, and glass bottles when used in agricultural production activities.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Tax Incentives for Starting Businesses in Inland Areas and Autonomous Regions<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">The current system has been expanded to apply the reduced CIR rate of 12.5 % to the first \u20ac50,000 of taxable income for companies classified as micro, small, or medium-sized enterprises or Small Mid Caps, provided that certain requirements are met.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Furthermore, for the purposes of determining corporate taxable income, \u00abexpenses\u00bb corresponding to \u00abnet job creation\u00a0\u00bb (terms defined in the law) will be treated as 120% of the respective amount, recorded as an expense for the year, provided that the respective requirements are met.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As part of the transfer of permanent residence to an inland territory, an IRS deduction of 15% of the amount paid by any household member for rent (or for contracts granting the right to permanent housing), up to a limit of \u20ac1,000, is provided for over a period of 3 years.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As part of the support provided to students attending educational institutions located in inland areas or in autonomous regions, a deduction of 10 % from the amount of education and training expenses has also been provided for, with an increase in the overall deduction limit to 1,000 \u20ac if the difference is related to these expenses.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">The Impact of the State Budget on Taxpayer Protections<\/h3>\n\n\n\n<h4 class=\"wp-block-heading\">General Tax Law<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Access to the Central Register of Beneficial Owners<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Establishes access to the data contained in the Central Beneficial Owner Registry by the competent bodies of the Tax Administration, for the purpose of determining taxpayers\u2019 tax status.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Code of Tax Procedure and Enforcement.<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">There are no changes to the Code of Tax Procedure and Assessment.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Social security<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Direct Consultation in Enforcement Proceedings<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Institute for Social Security Financial Management, I.P., and the Social Security Institute, I.P., are authorized, as part of procedures for the enforcement of social security debts, to obtain information regarding the identification of the defendant, the debtor, or the head of household, where applicable, and regarding the location of their attachable assets, by directly consulting the databases of the tax administration, social security, the land registry, the commercial registry, the vehicle registry, the civil registry, and other similar registries or archives.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Electronic Notifications<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">It is established that when beneficiaries submit an application for benefits or social assistance through Social Security Direct, Social Security agencies are authorized to send notifications\u2014as part of the same process and including the relevant decision\u2014through the Social Security electronic notification system.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Contributory Leave<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">The inclusion of \u00abcontributory leave\u00bb in the Code of Contributory Plans of the Social Security System is established.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Accordingly, it is stipulated that obligations under the contribution system and the payment of Social Security debts due in August are deferred until the last day of August, whether or not that day is a business day, and without any surcharges or penalties.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The exceptions to this extension are the notification of employee hiring, which must be submitted within 15 days prior to the effective date of the employment contract, and the deadline for submitting pay stubs, which is extended only until August 25.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is also established that, during the month of August, the deadlines for audit procedures resulting from the application of the contributory schemes of the Social Security system shall be suspended.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is also established that the deadlines for actions taken as part of administrative infraction proceedings, as well as for exercising the right to be heard or to defend oneself in any proceeding, exercising the right to a reduction in fines or to a waiver of fines, and the early payment of fines, or clarifications requested by social security institutions or the Authority for Working Conditions that are due during the month of August, will be extended to the first business day of September.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Finally, the deadline for complying with obligations related to the Workers\u2019 Compensation Fund (FCT), an equivalent mechanism, and the Workers\u2019 Compensation Guarantee Fund, as well as for settling claims with said Funds\u2014which are set to expire in August\u2014is extended to the last day of August, whether or not that day is a business day, and without any surcharge or penalty.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Other changes<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Allocation of Credits Resulting from State Aid<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is established that loans resulting from government aid will receive general preferential treatment, as they are classified alongside loans made available to businesses.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Preference in the Sale of Real Estate to Local Governments<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It is established that municipalities within whose territory real property or separate parcels of land are located that have been seized as part of tax enforcement proceedings shall have a right of first refusal in the purchase and sale or in payment in kind that takes precedence over the right of first refusal granted to the owner of the land.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">The Impact of the State Budget and Tax Violations&nbsp;<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The 2022 State Budget Act does not make any changes to the General Law on Tax Offenses, and no new tax offenses are defined.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Other Proposals in the State Budget<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">These measures are included in the \u00abOther Tax Provisions\u00bb section of the 2023 State Budget Act and primarily pertain to fees and sector-specific financial contributions.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The legislature has used this chapter to extend the validity of the various sector-specific contributions that have been established since 2011. It is therefore becoming increasingly clear that even the so-called extraordinary contributions are here to stay.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Contribution to Audiovisual Media<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">It has been determined that the amounts for the audiovisual contribution, established in 2003, will not be adjusted in 2023; instead, the current monthly amounts\u2014\u20ac2.85\u2014which are included in electricity bills, will remain in effect.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Special Contribution for the Conservation of Forest Resources<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">This special contribution was established in the 2020 federal budget law.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Whereas the government failed to meet the deadline originally set for its regulations (180 days after the State Budget Act for 2020 took effect) as well as the deadline set for this purpose in the State Budget Act for 2022 (90 days after the entry into force of that law), a new deadline for the regulations has now been set\u201490 days after the entry into force of the State Budget Act for 2023.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This tax applies to IRS taxpayers who receive business and professional income, or to IRC taxpayers who primarily engage in economic activities that intensively use, incorporate, or process forest resources.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Following the legislative decision, Decree-Law 88\/2022 of December 30 has already been published, which regulates this contribution and sets forth the conditions for its application.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Article on the Banking Sector<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">It is hereby established that the levy on the banking sector\u2014created by the 2011 State Budget Act\u2014will remain in effect in 2023 to finance the Resolution Fund.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Additional Solidarity Contribution from the Banking Sector<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">The additional solidarity levy on the banking sector, established in 2020, will also remain in effect in 2023.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u00abAdditional solidarity\u00bb applies to (i) credit institutions whose registered office and principal place of business are located in Portuguese territory, (ii) subsidiaries in Portugal of credit institutions whose registered office and principal place of business are not located in Portugal, and also (iii) branches in Portugal of credit institutions whose registered office and principal place of business are located outside Portugal.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The applicable rate is calculated by applying a percentage of 0.02% to the value of the liabilities of the covered banking institutions, plus the application of a percentage of 0.00005% to the notional value of the off-balance-sheet derivative financial instruments of those same entities.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Outstanding Contribution to the Pharmaceutical Industry<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">It has been confirmed that the extraordinary levy on the pharmaceutical industry (CEIF), which was introduced by the 2015 State Budget Act (Law No. 82-B\/2014, dated December 31), will remain in effect in 2023.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Entities engaged in the first sale, for consideration, of medicinal products for human use in Portugal are subject to the CEIF, whether they are: holders of a marketing authorization or a registration; representatives, intermediaries, or wholesale distributors; or dealers in medicinal products under an authorization for exceptional use or an exceptional authorization.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The CEIF is levied on the total value of drug sales made during each quarter, specifically: drugs whose prices are subsidized by the government; medicines subject to restricted medical prescriptions; medicines with an authorization for exceptional use or an exceptional authorization; medical gases and human blood and plasma derivatives; other medicines packaged for hospital use; and orphan drugs.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The applicable rates vary depending on the type of medication, ranging from 2.5 % to 14.3 %.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Special Contribution from Medical Device Suppliers to the National Health Service<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">The special levy on suppliers to the National Health Service\u2019s medical device industry will remain in effect in 2023, with the revenue automatically incorporated into the NHS budget.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Suppliers\u2014whether manufacturers, their agents or representatives, intermediaries, wholesale distributors, or mere resellers, who bill NHS entities for the supply of medical devices and in vitro diagnostic medical devices and their accessories, will be subject to the contribution. However, it continues to be stipulated that large medical devices and in vitro diagnostic medical devices intended for treatment and diagnosis\u2014that is, equipment intended to be installed, fixed, or otherwise attached to a specific location within a care unit, such that they cannot be moved from that location or removed without the use of tools or devices, and which are not specifically intended for use in a mobile care unit, are excluded from the scope of the contribution.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The contribution is now deducted from the total amount billed quarterly for medical devices and in vitro diagnostic medical devices supplied to National Health Service (SNS) entities; this amount is determined based on the purchase data reported by SNS departments and facilities, minus the corresponding VAT.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The rates are 4% if the annual value is 10 million euros or more; 2.5% if the annual value is 5 million euros or more but less than 10 million euros; and 1.5% if the annual value is 2 million euros or more but less than 5 million euros (which means that the minimum contribution is 30,000 euros).<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">An extraordinary contribution to the energy sector<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">Similarly, the 2023 Finance Act maintains the CESE, which has been an integral part of the tax system since its creation in 2014.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The CESE is levied on individuals or legal entities that are part of the national energy sector and that have their domicile or registered office, effective management, or permanent establishment in Portugal. Only companies holding a license to operate power plants or a license to generate electricity, concessionaires engaged in the transmission or distribution of electricity, concessionaires engaged in the transmission, distribution, or storage of natural gas, holders of licenses for the local distribution of natural gas, operators engaged in the refining and processing of crude oil or the distribution of petroleum products, and wholesale traders in electricity, crude oil, or petroleum products are subject to the CESE.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The general tax rate is 0.85% of the value of the assets or the value of the regulated property subject to this tax. However, specific rates have been established for taxpayers that generate electricity using natural gas-fired combined-cycle power plants, for which the rate may vary between 0.285%, 0.565%, and 0.85%, depending on the entity\u2019s annual natural gas consumption. Also with regard to crude oil refining activities, the CESE may vary within these values, depending on the refinery\u2019s operating index, and supply contracts under the National Natural Gas System are subject to a rate equivalent to 1.45%.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Mechanism for Sustainable Mobility and Territorial Cohesion<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">The government departments of finance, the environment and climate action, infrastructure, and territorial cohesion are also planning to evaluate and establish, during the first half of 2023, a mechanism that promotes sustainable mobility and territorial cohesion, funded by the reallocation of tax reductions derived from FSI revenues, including the surcharge on CO\u2082 emissions (index 2).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This mechanism determines solutions related to the renewal of the vehicle fleet based on criteria of environmental sustainability and energy efficiency, the scope of current toll reduction systems applicable in low-density inland areas, and incentives for sustainable mobility programs, such as PART and the Program to Support the Densification and Expansion of Public Transit Services.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">New Mandatory Temporary Solidarity Contributions<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\">The new temporary solidarity contributions\u2014which have since been approved by the government\u2014for the energy and food distribution sectors have already been regulated by Law 24-B\/2022, dated December 30, and the latter by Ministerial Order 312-E\/2022, dated December 30. For more information on this topic, please see our newsletter, \u201cThe Two New Mandatory Temporary Solidarity Contributions (Windfall Profit Taxes).\u201d.<\/p>","protected":false},"excerpt":{"rendered":"<p>Through this account, we cover all categories, be it cryptocurrency, household income, social security, corporate, IVA, real estate, etc.\u00a0<\/p>","protected":false},"author":1,"featured_media":9163,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"neve_meta_sidebar":"","neve_meta_container":"","neve_meta_enable_content_width":"","neve_meta_content_width":0,"neve_meta_title_alignment":"","neve_meta_author_avatar":"","neve_post_elements_order":"","neve_meta_disable_header":"","neve_meta_disable_footer":"","neve_meta_disable_title":"","neve_meta_reading_time":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"\u00c0 travers ce guide, nous abordons toutes les cat\u00e9gories, que ce soit la cryptomonnaie, les revenus des m\u00e9nages, la s\u00e9curit\u00e9 sociale, les entreprises, IVA, immobiliers, etc.\u00a0","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[1684,1],"tags":[67],"class_list":["post-9157","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fiscalites-des-expatrier-au-portugal","category-fiscalite-des-francais-au-portugal","tag-fiscalite"],"jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/i0.wp.com\/vivreauportugalconsulting.com\/wp-content\/uploads\/2023\/01\/oe2023-facebook.webp?fit=1201%2C631&ssl=1","_links":{"self":[{"href":"https:\/\/vivreauportugalconsulting.com\/en\/wp-json\/wp\/v2\/posts\/9157","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vivreauportugalconsulting.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vivreauportugalconsulting.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vivreauportugalconsulting.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/vivreauportugalconsulting.com\/en\/wp-json\/wp\/v2\/comments?post=9157"}],"version-history":[{"count":0,"href":"https:\/\/vivreauportugalconsulting.com\/en\/wp-json\/wp\/v2\/posts\/9157\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vivreauportugalconsulting.com\/en\/wp-json\/wp\/v2\/media\/9163"}],"wp:attachment":[{"href":"https:\/\/vivreauportugalconsulting.com\/en\/wp-json\/wp\/v2\/media?parent=9157"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vivreauportugalconsulting.com\/en\/wp-json\/wp\/v2\/categories?post=9157"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vivreauportugalconsulting.com\/en\/wp-json\/wp\/v2\/tags?post=9157"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}