Diverse and sometimes contradictory recommendations are currently under discussion to modify underlying rules governing Local Lodging. In last year’s budget, numerous changes came into effect regarding the taxation of Local Lodging income. In IRC, “AL” income under the Corporate Simplified Regime lost its reduced 0.04 coefficient, rising to 0.35. In IRS, the changes moved in the same direction: under the Simplified Regime for Independent workers, the 0.35 coefficient also applies. Apartments and villas let under in Local Lodging registrations were excluded from the 0.15 coefficient still available to room lets, hostels and holiday offerings registered under the “Tourist Development” classification.
The State Budget for 2018 introduces important revisions to the Simplified Regime. The Secretary of State for Fiscal Affairs, António Mendonça Mendes, declared that the measures “do not impact” taxpayers on low and middle incomes. At the same time, the changes “do not allow wealthier service providers to manipulate the existing system to simplify, rather than lower taxes”. “Who truly must justify expenses are those who, earning more than €100,000, have chosen not to apply standard accounting”.
The Non-Habitual Residency (NHR) programme has been successful in attracting freelancers to Portugal from around the world. While this plan offers pensioners a 10-year tax-free holiday and wealthy executives, a modest 20% flat assessment on six-figure salaries, this solution can leave much to be desired for the self-employed. In fact, a better option already exists for “gig economy” freelancers in the Simplified Regime, the standard means of assessment used by 99% of entrepreneurs in Portugal. Continue reading