By PEDRO SIMÕES [email protected]
Pedro Simões is licensed in fiscal law and management, and is the Managing Director of ACOQ Consultancy Lda, based in Lisbon.
The news, each day, tells of rising unemployment and the worldwide collapse of business enterprises. Does this affect Portugal? And if so, how will it affect those who live and work here?
The government budget was published in December, however, in light of the current economic downturn, it has been revised and will be discussed and approved this month. In recent months, we have read and heard news about aid being given to ailing companies, and about credit lines with special rates, guaranteed by the Portuguese government.
The Portuguese government approved, in its 2009 Budget, several changes that can, in fact, help companies and, consequently, help people. The company tax rate was changed from 2009, and we now have two rates. The new rates will be dependent on the annual profit that each company will produce. In short, the government has set a line of 12,500 euros, which changes the applicable rate, as follows:
Annual Profit Company Tax rate
Less than 12,500 Euros 12.5 per cent
More than 12,500 Euros 25 per cent
Will this change actually help companies?
This measure will just affect companies that are still showing profits. And what about the others that are having a very difficult time and don’t show a profit?
For those companies that are profitable, when do you think this change will take effect?
This change will only affect their company tax to be paid in May 2010.
The government has also changed the payments in advance for company tax, and this change will affect companies in 2009.
From 2009,and this is also only for companies that show profits and that pay taxes, the three Payments in Advance for Company Tax corresponds to the following rates:
Annual Income Rate of tax paid in previous year
Less than 498,797.20 Euros 70 per cent
More than 498,797.20 Euros 90 per cent
The change in the rates from 75 per cent to 70 per cent and from 85 per cent to 90 per cent, do not really reflect a reduction, because the government has increased the percentage for companies that invoice more than 498,797.20 euros.
In short, smaller private companies have not had as much help from the government, as other bigger public companies and banks. We will have to wait and see if there is anything new in the coming months. At the moment, everything is changing so fast, that it is difficult to prepare for what is coming and impossible to make predictions.
For more information, please email [email protected], call 219 205 225 or fax 212 468 352