Changes The Vat Code Approved By Decree-Law No. 394-B/94, Of December 26, And Proceeds To The Seventh Amendment To Decree-Law No. 347/85, Of 23 August

Original Language Title: Altera o Código do IVA, aprovado pelo Decreto-Lei n.º 394-B/94, de 26 de Dezembro, e procede à sétima alteração ao Decreto-Lei n.º 347/85, de 23 de Agosto

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Read the untranslated law here: http://app.parlamento.pt/webutils/docs/doc.pdf?path=6148523063446f764c3246795a5868774d546f334e7a67774c336470626d6c7561574e7059585270646d467a4c316776644756346447397a4c334277624445354e4331594c6d527659773d3d&fich=ppl194-X.doc&Inline=false

1 PROPOSAL of law No. 194/X explanatory statement fixing the standard rate of value added tax at 21%, operated by law No. 39/2005, of 24 June, took place in a context of severe budgetary crisis, in which public accounts were in a situation of excessive government deficit. That measure was then taken over by the Government as an exceptional measure, indispensable for the sustained consolidation of public accounts. It was also a fundamental measure to ensure compliance with the obligations of Portugal in the framework of the stability and Growth Pact and to restore the credibility of the Portuguese economy with international markets. In the last three years, the Government has embarked on a strategy of consolidation of public finances that necessitated the adoption of reform measures within the framework of the Public Administration and social security, as well as the restraint and the improvement of the quality of public spending. Official data recently released show that the value of the budget deficit decreased significantly, having ceased to be in a situation of excessive deficit before the commitments laid down in the stability and Growth Pact. The significant decrease of the public account deficit recorded over the past three years is the result of structural changes in the meantime carried out, which have started to produce results that will benefit the Country in the future. Was made a serious effort and strict budgetary consolidation and the Portuguese economy continued to grow. Similarly, the budgetary consolidation verified allowed to recover the confidence of economic agents and allowed the Portuguese had a better perception of the importance of having balanced public accounts. However, don't forget the less favourable international economic environment, motivated by the difficulties in the financial markets, as well as by the increase in the price of oil. This context reveals a situation of uncertainty that deteriorates the expectations of economic agents and that requires the Government to act prudently in 2 frame of a credible and responsible management of public accounts. Thus, and without giving up the goals set out, the results obtained allow at present for a reduction of the standard rate of value added tax to 20%. This reduction of the standard rate of value added tax will create more favourable conditions for economic growth and employment and to the attraction of investment, without the Government to divert the development of its social policies directed to combating inequalities and promoting more opportunities for all the Portuguese. For technical reasons, the change in the standard rate of value added tax should enter into force at the beginning of a period of matching tax for taxable persons of normal monthly and quarterly, the reduction provided for in this Bill is due to come into force from 1 July 2008. 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 Amendment to the code of value added tax articles 18 and 49 of the code of value added tax, approved by Decree-Law No. 394-B/84 of 26 December , shall be replaced by the following:% quot% article 18 1-[...]:) [...]; b) […]; (c)) for the remaining imports, transfers of goods and services, the rate of 20%. 2 - […]. 3-the fees referred to in subparagraphs (a)), b) and (c)) of paragraph 1 are, respectively, of 4%, 8% and 14%, in relation to transactions which, in accordance with the special law 3, consider themselves carried out in the autonomous regions of the Azores and Madeira. 4 - […]. 5 - […]. 6 - […]. 7 - […]. 8 - […]. 9 - […].

Article 49 where the billing or your registration will be processed by values, with tax included, in accordance with the preceding articles, the establishment of the corresponding tax basis is obtained by dividing those values for 105 when the tax rate is 5%, for 112 when the tax rate is 12%, and by 120 when the tax rate is 20% by multiplying the quotient by 100 and rounding the result, by default or by excess, to the nearest unit, without prejudice to the adoption of any other method leading to identical result.»

Article 2 amendment to Decree-Law No. 347/85, of August 23 article 1 of Decree-Law No. 347/85, of August 23 is replaced by the following: ' article 1-1 are fixed in 4%, 8% and 14%, respectively, the rate of the value added tax referred to in points (a)), b) and (c)) of paragraph 1 of article 18 of the code of value added tax approved by Decree-Law No. 394-B/84 of 26 December, to be applied to transfers of goods and services that consider themselves carried out in the autonomous regions of the Azores and Madeira and the imports whose customs clearance takes place in the same Regions. 4 2 - […]. 3 - […].»

Article 3 1 revenue-Consignment the consignment of VAT revenue equivalent to two percentage points from its rate, one for Social Security and the other to the Caixa Geral de Aposentações, I. P. 2-the consignment of the revenue referred to in the preceding paragraph is in force until 31 December 2009.

Article 4 entry into force 3-The amendments made by this Act to the code of value added tax and Decree-Law No. 347/85, of 23 August, come into force on 1 July 2008. 4-in the case of transfers of goods and services continued in nature resulting from contracts which give rise to successive payments, the changes introduced by this law only apply to transactions carried out from the date referred to in the preceding paragraph, derogate from, for this purpose, the provisions of paragraph 9 of article 18 of the code of value added tax.

Seen and approved by the Council of Ministers of April 10 2008 the Prime Minister, the Minister of Parliamentary Affairs Minister Presidency 5