The State Budget Law Proposal for 2015 has just been delivered in the Portuguese Parliament.
Among the proposed changes, we highlight the following:
· Reduction of the general Corporate Income Tax rate from 23% to 21%;
· The 3,5% Personal Income Tax (PIT) surcharge is maintained, in the same terms as for 2014, although a tax credit may be granted in 2016 upon the assessment of the 2015 PIT;
· The extraordinary solidarity contribution (CES) is maintained, in the same terms as for 2014, although limited to higher pensions and shall be due at 15% on the amount exceeding 11 times the social index reference (“IAS”) and below 17 times that same index and 40%, on the amount exceeding 17 times the IAS;
· New rules are introduced for the recovery of VAT on “bad debts” and on “irrecoverable debts“, particularly the elimination of the requirement to write-off the debts from the balance sheet in order to recover VAT on receivables for which the payment was delayed for more than 24 months. Additionally, new requirements are introduced for the recovery of VAT related to debts of insolvent clients;
· A common flat-rate scheme regime for farmers is adopted, applicable to farmers with a turnover not exceeding € 10.000 in the previous year, under which it will be possible to request the Portuguese Tax Authorities for a flat-rate compensation, which should correspond to 6% of the total amount of the performed operations, provided specific requirements are met.
Tomorrow’s Government Meeting’s schedule includes the discussion of the Personal Income Tax Reform and Green Taxation Reform Proposals.
Naturally, once these Proposals are made public, we will circulate a detailed analysis of the main changes to the Portuguese tax law foreseen for 2015.
Attached is the Portuguese version of the State Budget Law proposal for 2015.