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Newsletter November

Nov 26, 2020 | 0 comments

Newsletter November 2020

 

State Budget 2020: New support for micro and SMEs and 100% of wages for lay-off approved

MEPs adopted proposals on 26 November to extend support for a gradual recovery to 2021, with workers no longer having to pay cuts, and to create public support for micro and SMEs to pay wages.

These proposals guarantee full payment of wages up to a limit of three minimum wages for workers covered by the support mechanisms for the economic recovery, simplified ‘lay-off’ or its successor and ‘lay-off’ provided for in the Labour Code.

This support mechanism will be regulated until 30 days after the entry into force of the State Budget 2021

 

Approved proposal for suspension of account payments

Micro, small and medium-sized enterprises may be exempted from paying on account in 2021. The proposal to temporarily suspend payment was approved on 24 November.

The proposal was based on the premise that “the calculation of the IRC for 2020 (which serves as the basis for calculating payments on account in 2021) is based on the results for 2019”, but the situation has changed due to the pandemic.

“For many MSMEs, the profits established in 2020 on the basis of the 2019 results will not be replicated in 2021 – most likely they will have negative profits or very close to zero, leading to either no corporate income tax or minimum taxation, incomparable to the previous year”.

 

750 million in subsidies for micro and small enterprises

There is a sum of 750 million to pay outright grants to micro and small businesses in the sectors most affected by the pandemic crisis. The sectors concerned are trade and services open to consumers, which were forced to close down in March, housing, restaurants and cultural activities.

To gain access to this support, companies must have seen falls of at least 25% in the first nine months of 2020 compared to the previous year, and must have closed last year with positive equity capital. They must also have the situation regularised both in the Tax Authority, the Social Security, the Mutual Guarantee Company and in banking.

Each company will be given support corresponding to a percentage of the fall in turnover – around 20%, the Minister of Economy said – up to the following limits: 7,500 euros for microenterprises and 40,000 euros for small businesses.

Companies that join the support.pt must keep their jobs – that is, they cannot make redundancies for economic reasons for the duration of the support – and they cannot distribute profits or other funds to members.

These subsidies will be paid in two tranches. The Government expects to pay the first instalment later this year, with the realisation of this prospect dependent on Brussels. The second will come two months later. With this measure, the Executive hopes to support 100,000 companies, which can use these subsidies even to pay salaries, the Minister for Economic Affairs said.