Main tax changes for 2024 – 1st semester

Real Estate and Tourism

Decree-Law no. 43/2024 of 2 July

Support Regime for all leaseholders with rental contracts in force who can no longer benefit from extraordinary support for families to pay their rent.

Summary:

This regime applies through evidence by the Tax Authority of the mandatory communication of contracts. This is a temporary and exceptional measure, scheduled to last until December 2028. It aims to maintain extraordinary support for the leaseholders and subtenants covered by it, to an amount of up to €200 per month, paid by social security, in an attempt to increase families disposable income and observe the principle of equality inherent in it.

Draft Law no. 5/XVI/1.ª

Exemption from municipal tax on onerous property transfers (IMT) and stamp duty on the purchase of permanent housing by young people aged 35 or under.

Decree-Law no. 44/2024 of 10 July

Establishes the conditions under which the state can provide a personal guarantee to credit institutions, making it possible to grant full loans for permanent housing to young people up to the age of 35

Summary:

This regime allows the state to provide a personal guarantee for the first purchase of a permanent home for young people up to and including the age of 35, with incomes up to the
8th personal income tax bracket. However, the borrower may not own an urban building or an autonomous fraction of an urban residential building, nor may they use the State
guarantee more than once. Finally, the value of the transaction cannot exceed €450,000.00 and the guarantee to be provided by the State cannot exceed 15% of the
transaction value of the urban building or autonomous fraction of an

Administrative Ordinance of the Portuguese Tax Authority No. 20266 of 23.02.2024

Summary:

This Administrative Ordinance sets out interpretations of three regulations:

Reinvestment of property intended for Own Permanent Housing (OPH): if the sale took place after the entry into force of Law no. 56/2023 (Mais Habitação), the
requirements to benefit from the exclusion regime are those of the new law;
Reinvestment of property that is not intended for Own Permanent Housing (OPH): the amortisation of any loan taken out to purchase
the property and the application of the sale value (possibly deducted from said loan) can, at the most, be carried out until
March 2025;
Suspension, for 2 years, of the deadline for tax-relevant reinvestment. It should be understood that the term for using the property as Own Permanent
Housing of the taxable person and their family is also suspended.

Draft Law no. 4/XVI/1.ª

Summary:

Revokes the Extraordinary Contribution on Local Accommodation;
Revokes the setting of the antiquity coefficient applicable to local accommodation establishments for the purposes of assessing Real Estate Tax;
Amends article 10 of the PIT Code (capital gains) in order to reduce the period from 24 to 12 months for the transfer of real estate intended for Own Permanent Housing (OPH) for the purposes of excluding gains from that transfer from taxation; To establish that when the reinvestment takes place before the transfer, that period is counted from the date of reinvestment; Provides for an exception to that period for cases of changes in the composition of the household and labour mobility;
Revokes paragraph f) of paragraph 5(f), which is designed to exclude from taxation taxpayers who have benefited from the exclusion regime in the previous three years. The deadline is therefore to be counted in accordance with the Administrative Ordinance No. 20266 of 23 February 2024.

Capital markets

Law no. 31/2024, 28th june

Tax measures to boost the capital markets landscape in Portugal.

Summary:

The new law introduces the following main changes:

Credit Funds will now follow the same tax regime applicable to Venture Capital Funds, as set out in Article 22 of the Tax Benefits Statute
(“EBF”);
Creation of a new special tax regime applicable to real estate Collective Investment Funds (CIF) with investments in Affordable Rent;
Exemption of Corporate Income Tax (“CIT”) for non-resident Collective Investment Funds (“CIFs”): The introduction of this exemption corrects the existing European Law mismatch between the tax treatment of resident and nonresident CIFs, discrimination which has already been analysed in various judgments of the Court of Justice of the European Union and national courts;
Incentives for long-term savings in Personal Income Tax (PIT): exclusion from progressive taxation, depending on the holding period, of capital gains realised on financial instruments admitted to trading and units in CIFs;
Mark-up of business expenses incurred by “Small Mid Cap” and “Mid Cap” companies, for CIT purposes, when in connection to trading operations;
Extension of the regime for reinvesting capital gains in the PIT: It is now possible to exclude from taxation the income accrued in the sale of own permanent housing, when the profit is used for the acquisition of a Pan-European Individual Savings Product.

Corporate

Ministry of the Economy’s “Acelerar a Economia” Programme

Summary:

Gradual reduction (2% per year) of corporate income tax to 15% (until 2027);
In the case of small or mediumsized companies and smallmedium capitalisation
companies (Small Mid Cap), this gradual reduction will be accelerated (until 2026) from 17% to 12.5% (applied to the first 50,000 euros of taxable income);
Widening access to the participation exemption regime by reducing the minimum
holding from 10 per cent to just 5 per cent (for 1 year);
Increased deductibility of financing costs incurred in merger operations;
Expansion of the operations covered by the goodwill tax deductibility regime.

Draft Law approving the Minimum level of taxation, transposing Directive (EU) 2022/2523 (Pillar Two) – in the public consultation phase until 31.07.2024

Minimum level of taxation for multinational and large national groups in the Union

Summary:

The Government proposes to transpose Council Directive (EU) 2022/2523 of 15 December 2022 on ensuring a worldwide minimum level of taxation for multinational enterprise groups and large domestic groups in the Union, continuing the work of
the Inclusive Framework on the OECD/G20 BEPS initiative under Pillar Two, establishing common measures for the effective minimum taxation of such
groups, creating for this purpose the Global Minimum Tax Regime (GMT).

RNH 2.0

Ministry of the Economy’s “Acelerar a Economia” Programme

Investors and new tax residents:

Summary:

Creation of an PIT tax deduction for capital gains and dividends obtained by individuals who have participated in company capitalization operations;
Expansion of the individuals and activities eligible under the new regime for attracting talent from abroad (which replaced the Non-Habitual Resident in 2024).

State Budget 2024

From January 1st, 2024, that the NHR regime is no longer available for new tax residents. However, another regime was announced: the New Inpatriate Regime (NIR). This regime cannot be cumulated with the NHR and took effect from January 2024 for individuals who, cumulatively:

have not been tax resident in Portugal for the last 5 years;
have acquired tax residency in Portugal; and
obtain income from employment or self employment within the scope of the new
regime, encompassing roles such as teaching in higher education, scientific research, positions in technology or startups (including board members), highly qualified
professions in companies with significant investment applications and jobs in industry
and service companies which turnover results, at least, in 50% from exports and other activities conducted by tax residents in Madeira and Azores (to be legislated by the Regions).

The benefits under this new regime include:

A flat 20% tax rate applicable to income from employment and/or self-employment
provided within the scope previously mentioned;
Exemption from taxation on foreign sourced income, covering employment/self employment income, dividends, interest, royalties, rental income and capital gains in
general;
These benefits will apply for a 10-year period.