Some aspects to highlight
Today the Law No. 7-A/2016 was published, approving the State Budget for 2016, entered into force on 31.03.2016. This State Budget marks a turning point in tax policy guidelines, with a clear bolstering of indirect taxes .

The planned increase in indirect taxes is intended to offset the expected decrease in direct taxes, which is reflected particularly in two measures: a gradual decrease in the Income Tax surcharge and the materialization of the Corporate Tax rate reduction. For its part, indirect taxes present significant increases in tax rates on tobacco and on petroleum products, as well as the increase of the reserve base of the stamp duty on certain operations.

One can not say that the state budget presents structural measures with particular impact on SMEs, however, it presents some that deserve our attention and which we are about to analyze.

Corporate Tax
Regarding the Corporate Tax there is a decrease in the period of reporting losses, from 12 to 5 years. However, in the discussion on details, SMEs escaped this measure, having been kept a 12 year period for the taxable persons covered by Decree-Law No. 372/2007 of November 6. It remains only to highlight the maintenance of the rate of 17% of Corporate Tax for the SMEs.

The conditions for application of the exemption participation regime are also changed, which allows excluding from taxation the profits distributed between companies and capital gains arising from the transfer of securities. 2

The minimum equity share is thus changed from 5% to 10%, and simultaneously the minimum period for holding equity stakes is reduced to one year.

Income Tax
Under the scope of the Income Tax, there should be a particular emphasis on the expansion of the reporting obligations of entities and users of extrassalarial compensation securities, referred to in Article 126 of the Income Tax Code. Due to this change, the obligations of information reporting to the Tax Authority can be extended, for example, to social vouchers (childcare vouchers and education vouchers). From this a particular concern of monitoring all securities is highlighted, regardless of format, including on paper, in electronic card or fully dematerialized, that enable their holders to make payments, whenever the use of these forms of compensation may correspond to a tax relief.

In other changes it is worth mentioning the replacement of the family quotient by fixed deductions for each dependent person and the deductibility of health and education and training expenses incurred outside the national territory.

With regards to VAT, the main objective of this Budget is to reduce the rate applicable to restaurant services, which will come into force on July 1. With this change are now covered by the intermediate VAT rate: ready-to-eat meals, in ready to eat and take away or home delivery regimes, as well as the supply of services and drinks, excluding alcoholic beverages, soft drinks, juice, nectars and carbonated water or added carbon dioxide or other substances.

It is important to note that when the service incorporates elements subject to different rates for which a single price is fixed, the taxable amount should be apportioned among the various rates, based on the proportional relationship between price of each element of the operation and the total price that would be applied according to the price list or in proportion to the normal value of the services that make up the operation. If that breakdown is not made, the highest rate is applicable to the totality of the service.

Stamp Duty
Finally, regarding the Stamp Duty, it must be noted the return of the taxation on supplies. Indeed, the stamp duty exemption on supplies will start to depend on the partner having an interest hold of not less than 10% equity, as long as it has remained in their ownership for a whole year or since the establishment of the invested entity, counting in this case that equity is maintained during that period.

Under the scope of this tax, a new article to the Stamp Duty Code is added, called "Disincentives to Consumer Credit" which, for the tax events occurred until December 31, 2018, increases by 50% the rates set in funds 17.2.1 to 17.2.4, which currently are between 0.07% and 1%.

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Business Cocktail Evening 22nd March 2018from 6:00pm onwards Lady in Red – Galeria de ArteEdifício Adega de Lagoa, E.N. 1258400-395 Lagoa Sponsored by: [...]
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