Category Archives: Briefs

State Budget 2021 – tax havens

29 Tuesday Dec 2020

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The imposition of IMI and IMT for companies directly or indirectly based in so-called tax havens, approved in the State Budget, does not distinguish between the jurisdictions with which Portugal has double taxation (ADT) and information exchange (ATI) agreements from those in which complete opacity prevails in capital movements. Sovereign funds and other investors from Oman, the United Arab Emirates or Qatar as well as investors based in Hong Kong – all included in the list of tax havens but with ADT with Portugal – will be some of the hardest hit. The same happens with the Cayman Islands, Jersey, Guernsey, Isle of Mann or Panama, where the funds are established, which aggregate a large part of institutional investors worldwide.

Brexit – Stays of 90 days

29 Tuesday Dec 2020

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The commercial agreement established between the United Kingdom and the European Union will allow the mobility of European and British citizens for short stays (maximum 90 days consecutively). As of yet, there is still no agreement for longer stays. The agreement does not cover the right of UK nationals to enter (with or without a visa) to work, reside or remain in the EU, nor vice versa.

Sole Traders can make stage payments of VAT in 2021

17 Thursday Dec 2020

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Self-employed workers in the Simplified Regime can use the exceptional programme that permits the payment of VAT in the first half of 2021 to be deferred in three- or six-monthly instalments. The decree that provides for this exceptional and temporary plan is one of the measures that aims to ensure liquidity to small businesses faced with a drop-in activity and invoicing due to the restrictions imposed by the covid-19 pandemic.

State Budget 2021 – Masks and disinfectant gel enter as IRS medical expenses

17 Thursday Dec 2020

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Expenses for masks, visors and disinfectant gel are now to be considered deductible health care expenses. If you buy individual protection equipment in an establishment that sells other products (such as supermarkets), you must ask for a separate invoice in order to deduct these expenses on your IRS return. In pharmacies, the deduction is automatic.

Brexit – Visiting UK Nationals eligible for “tax free” reimbursement

17 Thursday Dec 2020

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Businesses in Portugal have prepared systems for non-resident UK nationals to participate in “tax free” purchases as of 01 January 2021. The plan allows for the recovery of VAT paid on eligible purchases when exiting Portugal. There is a minimum amount of €61.50 within an establishment to be entitled to “Tax Free” refunds. The tax is recoverable only on purchased products and not on services, such as hotels and restaurants.

Merchants and companies obliged to accept electronic payments

11 Wednesday Nov 2020

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The Banco de Portugal wants companies and shops to accept at least one form of electronic payment in addition to cash.  With cash increasingly in decline, the covid-19 pandemic has only accelerated the digitalization of transactions, thereby increasing online consumption and the use of contactless payments.

2021 State Budget: Government moves to increase take-home pay

11 Wednesday Nov 2020

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Finanças will lower IRS withholding to increase disposable income for workers in 2021. These measures should reach 2 million Portuguese taxpayers. However, tax authorities plan to settle accounts in the following year. Also, unemployment benefits will rise €60 for those earning the minimum wage.

“Golden Visas” slow down but do not leave the Greater Lisbon area

11 Wednesday Nov 2020

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The Municipality of Lisbon concentrated 59.1% of total real estate purchases entitled to a “Golden Visa” this year, a distribution that increases to 75.2% if the analysis takes into consideration the greater metropolitan area. In the first nine months of this year, 993 residence permits for investment (ARI) were granted, better known as “Golden Visas”, which represented the entry of €540 million of foreign capital, 10.2% less when compared to the same period in 2019.

70% of hotels in the Algarve to close during the winter

11 Wednesday Nov 2020

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Almost three out of four hotels and tourist developments in the Algarve plan to suspend  their hospitality activities during the low season due to the crisis caused by the pandemic. Before the arrival of Covid-19, about 50% of hotels and tourist developments were already planning to close during the off-season. This number may continue to rise and leave even fewer establishments and developments open for business during the coming winter months.