Council of Ministers’ decision no. 41/2020, of 4 June, published in the Official Gazette of 6 June 2020, approves the Economic and Social Stabilization Program (“Programa de Estabilização Económica e Social” or “PEES”). PEES aims to respond to the consequences of the COVID-19 pandemic. The main tax measures proposed are highlighted below.
Council of Ministers’ decision 41/2020, of 4 June, published in the Official Gazette of 6 June 2020, approves the Economic and Social Stabilization Program (“Programa de Estabilização Económica e Social” or “PEES”). PEES aims to respond to the consequences of the COVID-19 pandemic. The main tax measures proposed are highlighted below.
I – CIT
a) 2020 Payment on Account (“Pagamento por conta” or “PPC”)
The rules and payment methods of the 2020 payment on account are adjusted as follows:
b) Autonomous taxation
Aggravated autonomous taxation rates are waived for companies that show taxable losses in 2020, having assessed taxable profits in previous tax years.
c) Taxable losses generated in 2020 and 2021
d) Restructuring of Small and Medium-sized Companies (SME’s) taking place in 2020
i. Business restructuring
It is foreseen:
ii. Acquisitions of an SME
It is foreseen the transfer of taxable losses is allowed upon the acquisition of SME’s that are considered ‘companies in difficulty’ in 2020, ”, and respective use at the level of the acquiring entity; this measure prohibits profits distributions and requires the maintenance of jobs for a 3-year period.
e) Special investment tax credit (“Crédito Fiscal Extraordinário de Investimento” or “CFEI”)
Investment expenses made in the 2nd semester of 2020 and in the 1st semester of 2021 allow:
II – VAT – Refund to event organizers operating in the tourism sector
It is foreseen the refund of VAT deducted and included in expenses incurred in by organizers of congresses, fairs, exhibitions , seminars and similar events. The expenses concerned should relate to direct needs of the organizers related to the referred events.
III – Social Security
Further exemptions and reductions of the employer’s Social Security contributions are established. The measure implies prohibition of collective termination of jobs and profits distributions throughout the period of its effectiveness.
a) Micro and SME’s
b) Large companies
IV – Additional solidarity tax for the banking sector
An additional solidarity tax for the banking sector will be created, amounting to 0.02 pp.
It shall be owed by:
V – Simplification measures
Several measures are foreseen, such as:
a) SIMPLEX SOS – simplifications of public administration procedures, such as the simplification of notifications, of the calculation of deadlines, of the issuance of opinions, as well as the facilitating of the use of digital means for notifications and establishing contact;
b) Transitional regime for the reduction of court fees, aiming at increasing the number of concluded proceedings by means of settlement, agreement or withdrawal;
c) Increasing the efficiency of the administrative and tax courts by means of specialisation; expediting and allowing for greater transparency in court cases through the increased use of electronic means.
VI – Payment in instalments of tax and Social Security debts
Insolvent companies or those either with an approved business recovery plan (“Processo Especial de Revitalização” or “PER”) or under the extra judicial procedure for companies’ recovery (“Regime Extrajudicial de Recuperação de Empresas” or “RERE”), that are effectively compliant with those plans, are granted the following benefits:
© 2020 PwC. This communication is of an informative nature and intended for general purposes only. It does not address any particular person or entity nor does it relate to any specific situation or circumstance. PricewaterhouseCoopers Tax Services TLS, Lda. We will not accept any responsibility arising from reliance on information hereby transmitted, which is not intended to be a substitute for specific professional business advice.