The Portuguese State Budget Act for 2020

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:

1. 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).
2. Inclusion of copyright on computer programs in the framework of the patent box regime (50% reduction in taxable income in the field of IP).
3. 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.
4. 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.
5. Expanding the scope of services exempted from VAT, with the inclusion of the services of psychologists and sign language translators.
6. 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.
7. Changes in allowed VAT deductions include electricity costs for electric vehicles or hybrid vehicles;
8. Increase in the turnover threshold for exemption from VAT from 10,000 euros to 12,500 euros.

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