The Portuguese State Budget Act for 2020
The Portuguese State Budget Act for 2020 (Act No. 2/2020) was adopted by Parliament and published in the official newspaper on March 31, 2020. The main points of the budget law include:
- An increase in the deduction of expenses incurred as a result of the purchase of tickets / passes for the benefit of employees up to 130% (i.e. 30% of the additional deduction).
- Inclusion of copyright on computer programs in the framework of the patent box regime (50% reduction in taxable income in the field of IP).
- Adjustment of the coefficients for determining the tax base in a simplified regime with respect to income arising from the use of local residential premises.
- Reducing the reduced tax rate for small and medium enterprises (SMEs) from 17.0% to 12.5% and increasing the share of taxable income to which the reduced rate applies from the first 15,000 euros of taxable income to 25,000 euros.
- Expanding the scope of services exempted from VAT, with the inclusion of the services of psychologists and sign language translators.
- Expanding the scope of the reduced VAT rate of 6% to the following areas:
– home care services for the elderly and children, as well as remote assistance services for the elderly and chronically ill;
– visit zoos, botanical gardens, and public aquariums;
– the provision of services, which include visits to national and public museums of municipal importance.
- Changes in allowed VAT deductions include electricity costs for electric vehicles or hybrid vehicles;
- Increase in the turnover threshold for exemption from VAT from 10,000 euros to 12,500 euros.
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