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A CIT credit will be introduced in benefit of CIT taxpayers whose tax year corresponds to calendar year, incurring investment expenses namely in the acquisition of tangible assets, non consumable biological assets and intangibles. The investment period runs from 1 July to 31 December 2022 (the investment period runs from the start of the 7th month until the end of the 12th month of the tax year, in case of entities whose tax year starts after 1 January 2022). There is an overall cap of EUR 5 million for the eligible expenses; the CIT credit available corresponds to:
a) 10% of the eligible expenses incurred in the tax year concerned capped at the average of the eligible investments expenses incurred in the three previous tax years;
b) 25% of the eligible expenses incurred in the tax year concerned, in the amount that exceeds the amount mentioned in a).
Taxpayers starting their activity on or after 1 January 2021 are entitled only to a tax credit of 10% on eligible expenses.
The annual tax credit is capped at 70% of the tax assessed. For companies taxed under the special regime of group taxation the tax credit applies to the tax assessed by the group capped at the individual amount that would apply to each individual company incurring the eligible expenses. The tax credit can be carried forward for 5 years in the case of insufficiency of tax assessed.
The benefit cannot cumulate with any other benefits of the same nature in respect of the same eligible investment expenses.
The taxpayer cannot distribute profits or terminate labour contracts based on collective redundancy or layoff from the first day of the 7th month of the tax period and for a 3-year period.
“For taxpayers whose tax year corresponds to the calendar year, the relevant investment period runs from July to December 2022.”
There is an extension until 31 December 2027 of the contractual tax benefits regime as well as the RFAI. This results from the update of the new regional aid map and is effective as from 1 January 2022 onward.
Expenses incurred with the implementation of the accounting Standard Audit File for tax purposes Portuguese version (SAF-T (PT)) are allowed an additional CIT deduction of 20% for the purposes of the computation of the taxable income. This applies to CIT taxpayers who are small and medium sized companies, as well as PIT taxpayers with organised accounting. Implementation should be concluded until the term of the 2023 tax year.
Expenses incurred with the implementation of ATCUD (sequential number validation code) are also allowed an additional CIT deduction of 20% for the purposes of the computation of the taxable income. This applies to CIT taxpayers who are small and medium sized companies, as well as PIT taxpayers with organised accounting. The additional deduction applies provided that the ATCUD is included in all invoices and other tax relevant documents from 1 January 2023 onward.
Expenses incurred as from the tax years starting on or after 1 January 2022 and until the end of each relevant tax period are eligible for this benefit.
In case the eligible expenses relate to assets subject to depreciation, the above mentioned benefits apply to the costs accounted for as depreciation or amortisation throughout the useful life of the asset.
This benefit cannot cumulate with other tax benefits of the same nature in respect of the same eligible expenses.
Failure to implement the accounting SAF-t (PT) and ACTUD within the deadlines mentioned above implies that the additional deductions of previous tax years are added back for the purpose of computation of the taxable profit of the tax year concerned, plus 5%.
As in the 2021 State Budget Law, in 2022 donations eligible under the cultural patronage benefit from an additional deduction of 10% (20% in case of inland regions). The following conditions should be met:
The applicable annual cap of 8/1000 of the turnover is increased by 50% in case the respective difference relates to said actions or projects.
Promotion of inland regions (“Programa de Valorização do Interior”)
As in the 2020 and 2021 State Budgets, the Government is granted authorisation to introduce a tax benefits scheme to promote inland regions (“Programa de Valorização do Interior”). It shall correspond to a CIT credit of 20% of the costs incurred with the creation of jobs in inland regions that exceed the national minimum wage, capped at the CIT assessed in the tax year concerned. This legislative authorisation relies on the authorisation from the European Union to expand the regional aid scheme.
“Contractual tax benefits and RFAI extended until 2027.”
The PIT and CIT exemptions on interest from Portuguese sovereign debt issued in renminbi in the Chinese internal debt market are maintained.
World Youth Day
Donations, in cash or in kind, to the Fundação JMJ-Lisboa 2022, which is a legal entity responsible for preparing, organising and coordinating the World Youth Day 2023 in Lisbon, are allowed:
a) As CIT deductible costs for 140% of the respective amount;
b) As PIT deductible costs for 140% of the respective amount under Category B (self-employment/business income);
c) In all other situations, as a PIT credit corresponding to 130% of the respective amount.
Celebration of the V Centenary of the Circumnavigation
Donations granted to the entity responsible to organise the celebration of the V Centenary of the Circumnavigation are eligible for the cultural patronage regime.
“The PIT and CIT exemptions on interest from Portuguese sovereign debt issued in renminbi in the Chinese internal debt market are maintained.”