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2022-06-28
Budget Law for 2022

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The recently published the State Budget Law for 2022 (" 2022 State Budget" -  Lei n.º 12/2022, de 27 de junho) propose some changes, especially relevant, regarding Personal Income Tax, among which we highlight the following:


> FORMER RESIDENTS TO BENEFIT FROM SPECIAL TAXATION REGIME UNTIL 2023

The tax regime applicable to former residents who returned to Portugal in 2019 and 2020 was extended. Taxpayers who became or will become resident in Portuguese territory in 2021, 2022 and 2023 can benefit from a 50% relief from taxation on employment and self-employment income. This relief applies to taxpayers who were resident in the Portuguese territory prior to 31 December 2017, 2018, and 2019, respectively.

The remaining requirements remain unaltered, i.e. in order to be eligible for this regime taxpayers must not have been resident in the Portuguese territory in the 3 preceding years and must have no outstanding debts towards the Tax Authorities.

The tax relief also applies to withholding taxes levied by paying entities.


> CAPITAL GAINS TAX ON STOCK AND SECURITIES

Mandatory aggregation

The positive balance between capital gains and capital losses arising from the transfer for consideration of shares and other securities is mandatorily aggregated when all the following conditions are met:

  • The assets have been held for less than 365 days;
  • The taxable income of the taxpayer including the balance of the capital gains and capital losses amounts to or exceeds EUR 75,009.

These rules also apply to the balance between capital gains and capital losses subject to the aggravated 35% tax rate (country, territory, or region subject to a clearly more favorable regime).


Assessment

First in first out (FIFO) rule shall apply in case of a sale of securities deposited in more than one credit institution or financial company – this rule shall apply with reference to each of these entities.

Credit institutions and financial companies involved in security-related transactions are required to provide taxpayers with a document, by 20 January of the following year, identifying the number, date, historical acquisition value and sales value of the securities concerned.

In case the date and historical acquisition are unknown, the acquisition value corresponds to the lower quotation amount of the two years prior to the sale, unless a higher amount is declared.


Exempt donation

The acquisition cost of securities acquired by donation, exempt from Stamp Duty, will now correspond to what would be considered for Stamp Duty liquidation purposes up to two years prior to the donation.