Newsletter October 2020
IRS retention rate may fall by 2021
Although António Costa said that a move in the personal income tax brackets would not be foreseen in the State Budget for 2021, the express newspaper said that the withholding rates that would be applied monthly could be reduced. The government plans to publish the new retention tables in December, so that companies can process January salaries according to the new rates.
In practical terms, this means that each worker will receive a higher net wage each month. On the other hand, the adjustment in the following year will result in less reimbursement for IRS dependent workers. This measure is intended to increase households’ disposable income.
VAT credit to consumers may last only a quarter, says Minister
One of the measures included in the proposed State budget for 2021 – the so-called VATucher – concerns consumer credit for VAT on restaurant, hotel and cultural expenses. In other words, the idea is to return to the consumer all the VAT paid on consumption in these sectors, so that this amount can be spent the following quarter in these same areas.
João Leão, Minister of Finance, says that this new measure is thought for one quarter only, not setting aside the possibility of applying it to the following quarter. Its duration will be dictated according to the evolution of the sectors and the economy. The aim is to stimulate a return to consumption in three of the sectors most affected by the pandemic.
Requests for EOMs’ back-orders between 23 and 31 October
At the OCC Free Meeting on 30 September, Paula Franco announced that the Social Security system will allow requests for retroactive payments from 23 to 31 October from Members of the Statutory Bodies (MOE) who meet the conditions for a fall in turnover of more than 40 per cent. With this new deadline, it was intended that the pending cases that referred to these supports would be resolved.