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COVID-19: Decree-Law extending the Regime of Deferral of Tax Obligations 0
05 abril 2021

Decree-Law no. 24/2021 of 26 March ("DL 24/2021") was published in the Official Gazette, establishing an exceptional and temporary regime for tax obligations and debts and social security contributions.
Specifically, this Decree-Law extends the deferral of tax obligations set out in Decree-Law no. 10-F/2020, of 26 March¹, to the withholding tax obligations arising from the Corporate Income Tax Code ("CIT") and Personal Income Tax Code ("PIT") and approves an exceptional regime of payment in instalments for tax debts and Social Security debts.
The main changes now introduced by the Portuguese Government with the purpose of ensuring liquidity for companies and preserving their activity are as follows.
 
A. Extension of the deferral regime to CIT and PIT withholding tax obligations
 
According to DL 24/2021, taxpayers who (i) have registered a 2019 turnover up to the maximum limit of the classification as micro, small and medium enterprise ("MSME") and a reduction of the turnover reported through the e-fatura platform of, at least, 25% of the monthly average of the full calendar year of 2020 in relation to the same period of the previous year or (ii) have their main activity falling under the economic activity classification of accommodation, restaurants and similar, or culture, or (iii) have started or restarted the activity on or after 1 January 2020, may comply with their CIT/IRS withholding tax obligations as established in article 94 of the CIT Code and article 98 of the PIT Code, respectively:
  • by the end of the period for voluntary payment; or
  • in three or six monthly instalments of € 25 or more, without interest.
Please note that in case of an instalment plan, the total amount of withholding tax to be paid should be at least € 75 or € 150, depending on whether it is split into 3 or 6 instalments.
 
This amendment is effective for withholding tax obligations relating to the months of February and following.
 
B. Special regime of deferral of CIT obligations – Self assessment
 
According to this regime, CIT taxpayers who have registered a turnover in 2020 up to the maximum limit of the classification as a MSME may assess CIT for the tax period beginning on or after 1 January 2020, until the deadline for filing the CIT return Modelo 22 of the 2020 tax period or in four instalments, of an amount equal to or higher than € 25, without interest, distributed as follows:
  • The first instalment on the date of fulfilment of the payment obligation in question (until the deadline for filing the Modelo 22 return for the 2020 tax period);
  • The remaining 3 monthly instalments on the same date of the subsequent months;
In this context, it should be noted that the application to the above-mentioned instalment payment scheme should be made until the deadline for filing the Modelo 22 tax return for the 2020 tax period and that the regime is also applicable to the 2020 tax period that differs from the calendar year, with the necessary adaptations.
 
C. Special regime of deferral of corporate income tax obligations - First and second payment on account
 
Additionally, CIT taxpayers who have obtained a turnover in 2020 up to the maximum limit of the classification as MSME can make the first and second payment on account of IRC for the 2021 tax period:
  • On the deadlines foreseen in article 104 of the CIT Code (July and September 2021, or the 7th and 9th month of the tax period different from the calendar year); or,
  • In three equal monthly instalments, of a value equal to or greater than € 25, without interest, divided as follows:

    1. the first instalment on the date of fulfilment of the payment obligation in question (July and September 2021, or the 7th and 9th month of the tax period different from the calendar year);
    2. The remaining 2 monthly instalments on the same date of the 2 subsequent months.
 
Taxpayers with a 2020 turnover up to € 2,000,000 may also reduce the second payment on account of corporate income tax by 50%, if the amount of the payment on account already made is equal to or greater than the tax that will be due on the basis of the tax base for the 2021 tax period.
 
D. Exceptional scheme of payment in instalments for tax debts in tax foreclosure
 
According to DL 14/21, tax debts arising from taxable events occurring between 1 January and 31 March 2021, as well as tax debts and debts of monthly Social Security contributions due during the same period, may be paid under the instalment regime, under which the payment of the first instalment must be made in the second month following that in which the order authorising payment by instalments is notified.
 
 
 
¹ The current wording of Decree-Law 10-F, of 26 March was amended by Decree-Laws 20-C/2020, of 7 May, 51/2020, of 7 August, 99/2020, of 22 November and 103-A/2020, of 15 December.
 
 
Contacts: lisboa@avm-advogados.com
 
António Vicente Marques – Sociedade de Advogados, RL SP
Sociedade de Advogados de Responsabilidade Limitada
March 2021
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