COVID 19: Exceptional measures regarding payments on account

We outline below the exceptional measures that have successively been adopted to mitigate the effects of the Covid-19 pandemic in Portugal on payments on account and additional payments on account.

Extension of the deadline

We recall that the deadline for the first payment on account and for the first additional payment on account had been postponed from July 31 (which would end today) to August 31.

Extraordinary limitation regime applicable to the first and second payments

Supplementary State Budget Law for 2020, published last Friday by Law no. 27-A/2020, of 24 July, which became effective in the following day, maintained the extraordinary regime set forth in the Draft of this Bill (see here a summary of the main proposals) allowing ailing Portuguese companies to waive in 50% or totally of the 1st and 2nd CIT payment on account when reveal a decrease of, at least, 20% or 40%, respectively, in the monthly average invoicing communicated through the E-invoice website in the first semester of 2020 compared to the same period in 2019 or, for those who started activity on or after January 1, 2019, in relation to the average of the previously period of activity.

Taxpayers whose main activity falls under the classification of economic activity of accommodation, restaurants and similar are also exempt from first and second payments.

Special rules are also provided for CIT payments on account for ailing companies in tax grouping.

We highlight that these measures are not applicable to additional payments on account, which may be paid until August 31 due to the extension given by Order 104/2020.XXII.

Exemption applicable to small and medium companies

Law 29/2020 was published today approving tax measures to support micro, small and medium-sized enterprises (SMEs), which includes the possibility of waiving payments on account.

This law enters into force tomorrow and will last until the end of the year in which these exceptional measures cease.