Social Passes
Written by Telma Bacala: [email protected]
Did you know that you can deduct the costs of your employees’ travel passes from your income taxable under IRC with a 130% surcharge? And that they are exempt from Withholding Tax and Social Security contributions?
But there are rules …..
It is only possible to make this deduction if the passes are general in nature in the company, that is, if they are paid to all employees.
The document should be issued in the name of the company, with the company’s fiscal number. This way, there will be no IRS taxation for the employee and the expense will be accepted in its totality for Corporate Income Tax purposes.
If some workers waive this payment, they should declare it in writing.
The social pass is an income of the employee and as such, despite not being subject to withholding tax, it should be declared in the DMR and in the employee’s model 3.
Applicable legislation:
Código do Imposto sobre o Rendimento das Pessoas Coletivas (CIRC) (portaldasfinancas.gov.pt)
Article 3, no. 15 of the Corporate Tax Code
