Authorizes The Government To Change The Tax Benefits Statute, Approved By Decree-Law No. 215/89, Of 1 July, The Code Of Value Added Tax, Approved By Decree-Law No. 394-B/84 Of 26 December, And The Vat System In The Transacçõ

Original Language Title: Autoriza o Governo a alterar o Estatuto dos Benefícios Fiscais, aprovado pelo Decreto-Lei n.º 215/89, de 1 de Julho, o Código do Imposto sobre o Valor Acrescentado, aprovado pelo Decreto-Lei n.º 394-B/84, de 26 de Dezembro, e o Regime do IVA nas Transacçõ

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Read the untranslated law here: http://app.parlamento.pt/webutils/docs/doc.pdf?path=6148523063446f764c3246795a5868774d546f334e7a67774c336470626d6c7561574e7059585270646d467a4c316776644756346447397a4c334277624445314f4331594c6d527659773d3d&fich=ppl158-X.doc&Inline=false

1 PROPOSAL of law No. 158/X explanatory memorandum the Government assumed in its program, that fiscal policy must be an active instrument in the process of economic growth, at the same time oriented to the achievement of the objectives of fiscal consolidation and to improve global equity. This Bill relates to government priorities, for which aims to ensure a legislative opportunity own, autonomous of the normal single assessments and studies already in the context of the discussion of the pleading of successive budgets of the State. It is to be submitted to the Assembly of the Republic that are considered indispensable and urgent, on the one hand, in the framework of the creation of a new special tax arrangements applicable to entities licensed to operate in the free zone of Madeira from 1 January 2007, whereas the extension of the State aid regime, identified under the number N 421/2006 , recently authorized by the European Commission and, on the other hand, to proceed with the alignment of the national legislation on VAT with certain Community legal acts governing this tax. The strategic orientations underlying the proposed new regime of the free zone of Madeira are based essentially on the assumption-recognized, moreover, by the Community institutions-that tax incentives to establish per-recipient have an outermost region and are designed to offset the constraints to existing development in the autonomous region of Madeira, being that this measure does not confer, in principle, any excessive compensation and that the planned aid is in proportion and is centered on the specific handicaps that intends to mitigate».

The reduction of the differential vis-à-vis normal tax rate resulting from the gradual increase of corporate tax rates to be fixed, the limitation of the individual tax benefit upon submission to the taxable amount permissible ceilings, the requirement for job creation, are key factors affecting and, at the same time, justify the granting of incentives 2 concerned. Essentially, the scheme it proposes will take effect from 1 January 2007, maintains the structural lines of the previous regime: the exclusion of the activities of financial intermediation, insurance and auxiliary institutions of financial intermediation and insurance, as well as the activities like "intra-group services", as well as the reduced rates of taxation to IRC. In these terms, for duly licensed entities from 1 January 2007 and 31 December 2013 to to the industrial activities, commercial, shipping and non-financial services, establishes a general system of degressive benefits, passing the tax income in IRC at rates of 3% in the years 2007 to 2009 , 4% in the years 2010 to 2012 and 5% in 2013 and subsequent years. Taking into account the experience gained with the previous regime, conditions-if admission to the regime, with a greater adaptation to economic realities and the markets, according to the contribution of these entities for the creation of jobs and to the diversification and modernization of the economy of the region and is limited to granting the benefit through the application of maximum ceilings to taxable income subject to the tax on corporate income tax.

In respect of the entities duly licensed to operate in the industrial free zone, the 50% deduction to the final tax liability of the IRC, since fulfilled certain conditions related to the contribution of its activity to the modernization and diversification of the regional economy, for human resources, improving environmental conditions and to create jobs. The entities already installed in the free zone of Madeira will be applicable as from 1 January 2012, this new regime. For your time, in the context of legislative authorization in the VAT, which the Government calls on the Assembly of the Republic, are concerned more punctual aspects, but still undeniable relevance. It is intended, in this context, the transposition of the directives Nos. 2006/69/EC and 2006/112/EC, both of the Council of 24 July 2006 and 11 December 2006, review the list of goods and services in the sector of waste and recyclable scraps 3, approaching the content of annex VI to Directive No. 2006/112/EC , of the Council of 28 November 2006, and ensure compliance with article 26 of the VAT system in the intra-Community transactions with Regulation (EC) no 1777/2005, of the Council of 17 October 2005. Were heard the Government organs of the autonomous region of Madeira.

So: under d) of paragraph 1 of article 197 of the Constitution, the Government presents to the Assembly of the Republic the following proposal of law: article 1 subject-matter 1-authorization is granted to the Government to change the Tax benefits Statute, approved by Decree-Law No. 215/89, of 1 July, briefly designated by EBF, so as to create a special tax regime with the aim of promoting regional development applicable to entities licenciem to operate in the free zone of Madeira in the period between 1 January 2007 and 31 December 2013 to, in accordance with the provisions of Commission decision C (2007) 3037 final of 27 June 2007. 2-is also granted the Government permission to change the code of value added tax, approved by Decree-Law No. 394-B/84 of 26 December, briefly referred to as the VAT code, as well as the Regime of VAT on intra-Community transactions, approved by Decree-Law No. 290/92, of 28 December, briefly designated by RITI, in order to transpose the Directives Nos. 2006/69/EC and 2006/112/EC , both of the Council of 24 July 2006 and 28 November 2006, review the list of goods and services in the sector of waste and recyclable scraps, approaching the content of annex VI to Directive No. 2006/112/EC of 28 November 2006, and ensure compliance with article 26 of the RITI with Regulation (EC) no 1777/2005 , of the Council of 17 October 2005.

4 Article 2 direction and extent of legislative authorization under EBF


The direction and extent of legislative authorization, with regard to amendments to the EBF, are as follows: the new special tax regime) to consecrate applies to income from licensed entities from 1 January 2007 and 31 December 2013 even for industrial, commercial activities, shipping and other services not excluded from this scheme , observe the respective constraints provided for in paragraph 1 of article 33 of the Tax benefits statute; b) income referred to in the preceding paragraph are subject to reduced rates of taxation to IRC, to 3%, in the years 2007 to 2009, 4% for the years 2010 to 2012 and 5% in 2013 to 2020; c) the impact of reduced rates of IRC that the entities referred to in the preceding paragraph may be granted shall be subject to a maximum limit of taxable income, which depends on the number of jobs created, according to the following scale: (i)) 2 million euros for the creation of 1 to 2 jobs; II) of EUR 2,600,000 for the creation of 3 to 5 jobs; III) EUR 16 million for the creation of 6 to 30 workstations; IV) EUR 26 million for the creation of 31 to 50 jobs; v) 40 million euros for the creation of more than 51 to 100 jobs; vi) 150 million euros by creating more than 100 jobs. d) the entities referred to in point (a)) pursuing industrial activities can benefit from a 50% deduction to the final tax liability of the IRC, provided that they meet at least two of the following conditions: (i)) contribute to the modernisation of the regional economy, in particular through the technological innovation of products and manufacturing processes or business models; II) contribute to the diversification of the regional economy, in particular through the exercise of new activities of taken added value; III) Promote the hiring of highly qualified human resources; 5 iv) contribute to the improvement of environmental conditions; v) to create at least 15 jobs, which should be kept during a minimum period of five years. and The beneficiaries may not) engage in activities of financial and insurance intermediation (section J codes 65-67 General nomenclature of economic activities in the European Community – NACE Rev. 1.1), as well as the activities qualified as "intra-group services", namely coordination centres, and Treasury, covered by section K, code 74 (services provided primarily to businesses); f) To benefit from the special scheme for the entities must meet one of the following eligibility requirements: i) creation of 1 to 5 jobs in the first six months of activity and realization of a minimum investment of 75 000 euros in the acquisition of fixed assets, tangible or intangible, in the first two years of activity; II) creation of 6 or more jobs in the first six months of activity; g) Are applicable to the entities referred to in paragraph 1(a) above, as well as to their members or shareholders, for situations not specified, other tax benefits and constraints set out for the free zone of Madeira; h) the benefit of the reduced rates taxation referred to in subparagraph (a)) applies to income from shareholdings licensed companies from 1 January 2007 and 31 December 2013 to except those obtained in Portuguese territory, with the exception of free trade zones, or in other Member States of the European Union, which are taxed under the general terms; I) entities that are licensed under the arrangements provided for in articles 33 and 34 of the Tax benefits statute can benefit from the new regime, from 1 January 2012.

6 article 3 meaning and extent of legislative authorization under the VAT the sense and the extent of legislative authorization, with regard to the VAT code and RITI, are the following: a) transpose the directive 2006/112/EC of 28 November 2006 on the common system of value added tax (the VAT directive) , which recast of Directive 77/388 Nr./EEC of the Council of 17 May 1977 (sixth directive), on the referenced in paragraph 1 of the article 412.º, which introduces changes in relation to location of certain services provided by intermediaries and the concept of goods subject to excise duty, by amending paragraph 17 of article 6 of the VAT code and a) of paragraph 1 of article 6 of the RITI; b) Transpose the Council Directive 2006/69/EC of 24 July 2006, in the part concerning amendments made in paragraph 7 of article 11 of the sixth directive, which introduces changes in relation to the determination of the taxable amount of the transactions, the host in the article 16 of the code of the VAT; c) review the list of goods and services in the sector of waste and recyclable scraps referred to in subparagraph (i)) of paragraph 1 of article 2, consisting of the annex and the VAT code, approaching the content of annex VI to Directive No. 2006/112/EC of 28 November 2006; d) ensure compliance with Regulation (EC) no 1777/2005, of the Council of 17 October 2005, changing the article 26 of the RITI.

Article 4 Duration legislative authorisations granted by this law have the duration of 90 days.

Seen and approved by the Council of Ministers of 9 August 2007 Prime Minister 7 the Minister of the Presidency


The Minister for Parliamentary Affairs 8 bearing in mind the new guidelines on State aid to maritime transport, published on 17 January 2004, and the new guidelines on State aid for regional aid for 2007-2013, whose map was adopted on 7 February 2007, as well as a new development model for the autonomous region of Madeira inserted with this decree-law, the appropriate changes to the tax regime of the free zone of Madeira for the period 2007 to 2013, and this produces its effects until 2020, adding to the effect a new article 34-the Tax benefits Statute. The new scheme has been notified to the Commission under paragraph 3 of article 88(1) of the EC Treaty and was allowed the application by decision C (2007) 3037, of 28 June 2006 on State aid no N 421/2006. The new regime maintains the structural lines of the previous regime, which expired on 31 December 2006, in so far as they are excluded from the activities of financial intermediation, insurance and auxiliary institutions of financial intermediation and insurance, as well as the activities of the ' inter-group services ' type (coordination centres, and Treasury) and it is expected that the recipient entities benefiting from a reduction in the rate of corporate income tax (IRC) arising from effective activities and materially carried out in the region of employment up to a maximum amount of taxable income that depends on the number of jobs created. In comparison with the previous regime, dedicates a general scheme of benefits gradually decreased, passing the duly licensed entities from 1 January 2007 and 31 December 2013 even for industrial, commercial activities, shipping and non-financial services to be taxed on IRC, at rates of 3%, in the years 2007 to 2009 , 4%, in the years 2010 to 2012 and 5% in 2013 and following.

On the other hand, the entities duly licensed to operate in the industrial free zone, holds the 50% deduction to the final tax liability the IRC, since fulfilled certain conditions related to the contribution of its activity to the modernization and diversification of the regional economy, for human resources, improving environmental conditions and to create jobs. 9 the entities already registered under previous regimes will continue to benefit from the tax break, from 1 January 2012, under the new regime now established. So: when using the legislative authorisation granted by no. .. the article of law No...., and pursuant to points (a)) and b) of paragraph 1 of article 198 of the Constitution, the Government decrees the following: article 1 is added to the Tax benefits Statute approved by Decree-Law No. 215/89, of July 1, a new article 34-A, is replaced by the following: ' article 34-


1-income of the licensed entities, from 1 January 2007 and 31 December 2013 even for industrial, commercial activities, shipping and other services not excluded from this scheme, which observe the respective constraints provided for in paragraph 1 of article 33 of this Statute, are taxed on IRC until 31 December 2020 in the following terms:) in the years 2007 to 2009, at the rate of 3%; (b)) in the years 2010 to 2012, at a rate of 4%; c) from 2013 to 2020, at the rate of 5%. 2-the entities referred to in the previous paragraph wishing to benefit from this scheme should commence its activities within six months in the case of international services and a year, in the case of maritime industrial activity or registration, the date of licensing and should still observe one of the following eligibility requirements: 1 to 5) creation of jobs in the first six months of activity and realization of a minimum investment of 75 000 euros on the purchase of tangible fixed assets or intangible assets, 10 2 us first years of activity; b) 6ou creation more jobs, in the first six months of activity. 3-the entities referred to in the preceding paragraphs shall be subject to the limitation of the grant, through the application of maximum ceilings to the taxable income to which the relevant reduced rate provided for in the following terms: 2 million euros) for the creation of 1 to 2 jobs; b) of EUR 2,600,000 for the creation of 3 to 5 jobs; c) EUR 16 million for the creation of 6 to 30 workstations; d) EUR 26 million for the creation of 31 to 50 jobs; and EUR 40 million), the creation of 51 to 100 jobs; f) 150 million euros by creating more than 100 jobs. 4-the maximum limits of the taxable amount provided for in the preceding paragraph shall be determined on the basis of the number of jobs that the beneficiary entities maintain in each financial year. 5-the entities referred to in paragraph 1 which proceed industrial activities benefit a 50% deduction to the final tax liability of the IRC provided that they meet at least two of the following conditions: (a)) contribute to the modernisation of the regional economy, in particular through the technological innovation of products and manufacturing processes or business models; b) contribute to the diversification of the regional economy, in particular through the exercise of new high value added activities; c) Promote the hiring of highly qualified human resources; d) contribute to the improvement of environmental conditions; and) to create at least 15 jobs, which should be kept during a minimum period of five years. 6-licensed entities in the free zone of Madeira, from 1 January 2007 and 31 December 2013 to, can, inter alia, carry out the following activities related to the 11) Agriculture and livestock, (NACE Rev. 1.1, section A, 02.02 and 01.4 codes); b) fishing, aquaculture and related services (NACE Rev. 1.1, section B, code 05); c) manufacturing (NACE Rev. 1.1, section D); d) production and distribution of electricity, gas and water supply (NACE Rev. 1.1, section E, code 40); e) wholesale trade (NACE Rev. 1.1, section G, 50 and 51); f) transport and communication (NACE Rev. 1.1, section I, 60, 61, 62 codes, 63 and 64); g) real estate Activities, renting and business services (NACE Rev. 1.1, section K, 70, 71, 72 codes, 73 and 74); h) higher education, adult education and other educational activities (NACE Rev. 1.1, section M, 80.4 80.3 and codes); I) other activities of collective services (NACE Rev. 1.1, section, ... codes 90, 92 and 93.01). 7-the list of activities referred to in the preceding paragraph are excluded the activities of financial intermediation, insurance and auxiliary institutions financial and insurance intermediation (NACE Rev. 1.1, section J., 65, 66 and 67) as well as the activities of the ' inter-group services ' type, namely coordination centres, and cash distribution (NACE Rev. 1.1, section K, code 74). 8-income management companies of licensed holdings from 1 January 2007 and 31 December 2013 to, are taxed on IRC under referred to in paragraph 1, except those obtained in Portuguese territory, with the exception of free trade zones, or in other Member States of the European Union, which are taxed under the general terms. 9-other situations other than those referred to in the preceding paragraphs shall apply, in accordance with the respective legislation and industrial, commercial activities, shipping and other services not excluded from this scheme, other tax benefits and constraints currently in force in the free zone of Madeira. 12 10-entities that are licensed under the arrangements provided for in articles 33 and 34 of the present Statute can benefit from the new regime, from January 1, 2012.»


Article 2 the tax relief scheme approved by this decree-law shall take effect from 1 January 2007. 13 Directive No. 2006/69/EC of 24 July 2006, came to amend Directive 77/No. 388/EEC (sixth directive) as regards certain measures to simplify the procedure for charging value added tax and the fight against fraud or tax evasion, repealing certain decisions granting derogations. Although a significant number of amendments on VAT Community legislation aimed at giving various options to Member States that by your own nature do not require transposition, certain provisions have also been introduced with mandatory that need to be embraced in national legislation until 1 January 2008. In this case the changes made in paragraph 7 of article 11 and under (a)) and (b)) of paragraph 4 of article 17, both of the sixth directive (cf. second paragraph of article 3 of the directive). The new wording of paragraph 7 of article 11 of the sixth directive, which introduces changes in relation to the determination of the taxable amount of the transactions, lacks, however, to be upheld in article 16 of the VAT code. By your side, the directive 2006/112/EC of 11 December 2006 on the common system of value added tax (the VAT directive), came the recast Directive 77/388/EEC of 17 May 1977 (sixth directive), so, in view of the many substantial changes that were inserted over the years , enter in the appropriate legal text clarity and rationality. The changes are mainly the structure and drafting of legal regulatory, with the aim to facilitate your understanding, not aiming, in principle, enter any change in the existing legal framework on VAT. However, in specific situations, certain details have been released and certain interpretative options regarding the content of the provisions of the Directive are likely to involve changes to their content. In this situation the provisions referred to in paragraph 1 of article 412.º of the Directive, whose transposition into the internal planning of the Member States, in so far as the content is not already included in those laws, should occur until 1 January 2008. Are in this situation in paragraph 17 of article 16 of the CIVA and subparagraph (a)) of paragraph 1 of article 6 of the RITI.

14 Thus: in the use of legislative authorization granted by article no ... of Law No .../... of ... of ..., and in accordance with point (b)) of paragraph 1 of article 198 of the Constitution, the Government decrees the following: Article 1 subject-matter this Decree-Law introduces amendments to the code of value added tax, approved by Decree-Law No. 394-B/84 of 26 December with its successive amendments, and Regime of VAT on intra-Community transactions, approved by Decree-Law No. 290/92, of 28 December.

Article 2 Amendment to the code of value added tax articles 6 and 16 of the Code of value added tax, approved by Decree-Law No. 394-B/84 of 26 December, as well as the annex and to the VAT code, referred to in subparagraph (i)) of paragraph 1 of article 2, shall be replaced by the following : ' article 6 [...]

1 - […]. 2 - […]. 3 - […]. 4 - [ ...]. 5 - […]. 6 - […] 7 - […]. 8 - […]. 9 - […]. 15 10-[...]. 11-[...]. 12 - [...]. 13-[...]. 14-[...]. 15-[...]. 16-[...]. 17-Notwithstanding the provisions of paragraph 4 of this article, the supply of services by intermediaries involved in the name and on behalf of another person, in any operation other than those referred to in paragraphs 8, 9, 15 and 16 of this article are taxable:) when located in national territory the operation referred to in the intermediation and brokerage services the customer is a taxable person not registered for the purposes of value added tax in another Member State and who have used their ID number to make the acquisition; (b)) when the operation referred to in another Member State intermediation and brokerage services the customer is a taxable person of referred to in (a)) and d) of paragraph 1 of article 2 and registered in value added tax and has used its ID number to make the acquisition. 18-[...]. 19-[...]. 20-[...]. 21-[...]. 22-[...]. 23-[...].

Article 16 [...]

16 1-[...]. 2 - […]. 3 - […]. 4-for the purposes of value added tax, the normal value of a good or service: a) the price, plus the items referred to in paragraph 5 of this article, insofar as it is not included, a recipient, in the level of trade where it is carried out the operation and under normal conditions of competition, would have to pay to a supplier or service provider independent at the time and place at which the operation or in time and place, to get the good or service or similar goods or services; b) in the absence of very similar, the normal value may not be less than the purchase price of the good or, in your absence, the cost price, reported the transfer of goods is held; c) in the absence of a similar service, the normal value may not be less than the cost borne by the taxpayer in the implementation of the provision of services. 5 - […]. 6 - […]. 7 - […]. 8 - […]. 9 - […]. 10 - […].»

' Annex 17 and the list of goods and services in the sector of waste and recyclable scraps referred to in subparagraph (i)) of paragraph 1 of article 2


the waste streams) ferrous and non-ferrous metals, scrap, and used materials, in particular of semi-finished products resulting from the processing, manufacturing or melting of ferrous and non-ferrous metals and their alloys; b) Transmissions of ferrous and non-ferrous products, semi-processed and certain associated processing services; c) Transmissions of residues and other recyclable materials consisting of ferrous and non-ferrous metals, their alloys, slag, ash, scales and industrial residues containing metals or their alloys, as well as supplies of services consisting in the sorting, cutting, fragmentation or pressing of these products; d) transmissions, as well as benefits of certain related processing services, ferrous and non-ferrous waste as well as parings, scrap, waste and used and recyclable material consisting of glass powder, glass, paper, cardboard, rags, bone, leather, artificial leather, parchment, raw hides and skins, tendons and sinews, twine, cordage, rope, cables, rubber and plastic; and) Streams of materials referred to in this Annex after processing in the form of cleaning, polishing, sorting, cutting, fragmenting, pressing or casting into ingots; f) Transmissions of scrap and waste resulting from the processing of basic material.»

Article 3 amendment to the VAT system in the intra-Community transactions articles 6 and 26 of the system of VAT on intra-Community transactions, approved by Decree-Law No. 290/92, of 28 December, shall be replaced by the following:% quot% article 18 6 [...]

1-[...]:) "goods subject to excise duty ', alcohol and alcoholic beverages, tobacco and petroleum and energetic products, with the exception of gas supplied through the natural gas distribution system and electricity; b) […]. 2 - […]. 3 - […].

Article 26 [...]

1 - […]. 2-the Declaration referred to in the preceding paragraph must be presented in any tax office by the end of the month following that in which have been exceeded the amount provided for in subparagraph (c)) of paragraph 1 of article 11, which shall take effect from the date, including the transmission of property in that amount has been exceeded. 3 - […]. 4 - […]. 5 - […]. 6 - […]. 7 - […]. 8 - […].»