Beginning in 2018, taxpayers with earnings exclusively from Local Lodging (Category B) will be exempt from SS contributions. Those who accumulate salaried income with self-employment earnings from “AL” will only be excused from monthly Social Security payments on their green receipts below a gross of €2,450 per month. Any excess shall be assessed at the rate of 21.4%. The measure is expected to encourage “AL” compliance which has already quadrupled over the past three years.
According to a recent report issued the Economics and Fraud Management Observatory of the University of Porto, the main causes of tax evasion in Portugal are the burden of direct and indirect tax on businesses and households as well as Social Security contributions. Other causes include the intensity and complexity of laws and regulations (bureaucracy in general) and the lack of credibility of sovereign bodies.