Portugal: COVID 19 – Tax Measures

On 22nd November, the Portuguese Government published additional exceptional and temporary measures related to the pandemic of COVID-19 disease.

From a tax standpoint, an Extraordinary Regime for deferral of taxes and contribution obligations for November and December 2020 was enacted.

During the month of November 2020, the obligation provided for in paragraph 1.b) of article 27 of the VAT code (payment of the tax assessed by the taxpayer), which has to be performed by a taxable person classified as a micro, small and medium-sized company (as per the provisions of article 2 of the annex to Decree-Law No. 372/2007, in its current wording) can be fulfilled:

a) Until November 30, 2020; or

b) In three, or six monthly installments, of an amount equal to or greater than EUR 25, without interest.

Self-employed workers and employers in the private and social sectors classified as micro, small and medium-sized companies are also entitled to the extraordinary deferment of the payment of contributions for November and December 2020, under the terms of the Labor Code.

The employer’s contributions and the employee’s contributions of the abovementioned self-employed workers may be paid in three or six equal and successive installments, without interest:

a) From July to September 2021

b) From July to December 2021.

Extraordinary deferral of the payment of social security contributions is not subject to request and the employers and self-employed workers shall indicate in February 2021, through the SS’ platform (Segurança Social Directa), which of the payment periods they intend to use.

Non-compliance with the requirements to access the deferred payment of contributions, or failure to pay one of the installments implies the immediate expiration of all the missing installments, as well as the termination of the interest exemption.