Key Benefits:
PROPOSED LAW NO. 217 /X
Exhibition of Motives
The steep rise in the price of petroleum products and the worsening crisis that it has
plagued international financial markets has been demanding from national authorities to
adoption of cautious behaviour, with a view mainly to the resolution of the
emerging social problems.
The consolidation measures adopted by the European Central Bank in the sense of
aggravation of interest rates as a mechanism for containing inflation, have implications
very gravy in the low-income families. It was mandatory that the state
introduce the tax relief that most affect the housing market, in the
more basic strand of guarantee of the fundamental right enshrined in Article 65 of the
Constitution of the Portuguese Republic.
It is intended to introduce a set of tax measures that contemplate a varied field
of taxes and objectives with a view to the internal smoothing of the effects of the crisis on the
financial markets and in the markets of petroleum products.
First, it is proposed to change the scheme of deductions to the collection relating to the
charges with real estate, in the seat of Income Tax on Singular People's Income
(IRS). It is thus to majorate the expenditure on own and permanent housing, which
include interest, depending on the taxable amount, benefiting, by the recourse to the technique of the
regressive exemption, the scales with lower throughput.
On the other hand, in Municipal Tax Office on Real Estate (IMI) is expected to be reduced
maximum rates relative to the urban buildings assessed and unassessed, in 0.1%. From this
shape, it reduces the maximum IMI rate from 0.8% to 0.7%, for buildings not assessed in the
terms in the IMI Code and from 0.5% to 0.4%, for buildings assessed in the terms of the
IMI Code. It is also the case to provide for the possibility of the Municipalities being able to
fix the rates by freguesias, ensuring here a greater equity in the distribution of the
tax charges involved.
Add, yet, to this reduction in fees, the extension of the IMI exemption deadline for the
permanent housing permanent from 6 to 8 years, for buildings with Tributtable Value up to
157,500 Euros, and from 3 to 4 years, for buildings with Tributtable Value of 157,500 Euros until
236,250 Euros.
On the other hand, the methods of the FIFO are imposed ( First-In First-Out ) or of the Average Cost
Weighted as the criteria of valuing oil stocks for tax purposes, to
the manufacturing and distribution companies of refined petroleum products. Thus, the gain
extraordinary meanwhile obtained by the adoption of this criterion is found to be subject to
an autonomous tax rate of 25%, thus guaranteeing the redistribution of wealth
through the implementation of an extraordinary tax, by the realization in casu .
The necessary procedures for the consultation of the Association were triggered
National of Portuguese Municipalities and the National Association of Freguestics.
Thus:
Under the terms of the paragraph d) of Article 197 of the Constitution, the Government presents to the Assembly
of the Republic the following proposed law:
Article 1.
Amendment to the Income Tax Code of Singular People
Articles 78 and 85 of the Income Tax Code on Singular People's Income,
abbreviately designated by IRS Code, approved by the Decree-Law No. 442-A/88,
of November 30, they are replaced by the following:
" Article 78.
[...]
1-[...].
2-[...].
3-[...].
4-Under no circumstances, the deductions provided for in paragraph 1 may leave it to the subjects
passive net income from tax less than the one that would stay
if your taxable income corresponded to the upper limit of the step
immediately lower.
5-[ previous n. 4 ].
Article 85.
[...]
1-[...].
2-[...].
3-[...].
4-[...].
5-[...].
6-[...].
7-The limits set out in points a) and b) of paragraph 1 are high, having in
account for the scales provided for in Article 68 (1), in the following terms:
a) In 50% for taxable persons with taxable income up to the
limit of the 2 level;
b) In 20% for taxable persons with taxable income up to the
limit of the 3 level;
c) In 10% for taxable persons with taxable income up to the
limit of the 4 th-step. "
Article 2.
Amendment to the Municipal Tax Code on Real Estate
Article 112 of the Municipal Tax Code on Real estate, abbreviately designated
by IMI Code, approved by the Decree-Law No. 287/2003 of November 12, passes
have the following wording:
" Article 112.
[...]
1-The rates of the municipal real estate tax are as follows:
a) [...];
b) Urban buildings: 0.4% to 0.7%;
c) Urban buildings assessed, in the terms of CIMI: 0.2% to 0.4%.
2-[...].
3-[...].
4-[...].
5-The municipalities, by deliberation of the municipal assembly, set the rate
to be applied in each year, within the intervals set out in the ( b) and c) from the
n. 1, and may this be fixed by freguesia.
6-[...].
7-[...].
8-[...].
9-[...].
10-[...].
11-[...].
12-[...].
13-[...].
14-[...]. "
Article 3.
Amendment to the Status of Tax Benefits
Article 46 of the Statute of Tax Benefits, approved by the Decree-Law No. 215/89, of
July 1 and republished by Decree-Law No. 108/2008, is replaced by the following:
" Article 46.
[...]
1-[...].
2-[...].
3-[...].
4-[...].
5-For the purposes of the provisions of paragraphs 1 and 3, the period of exemption to be granted is
determined in accordance with the following table:
Taxable value (in euros)
Period of exemption (in years)
-
Own and permanent housing and renting
for housing
Up to 157500 8
More than 157500 and up to 236250 4
6-[...].
7-[...].
8-[...].
9-[...].
10-[...].
11-[...].
12-[...]. "
Article 4.
Autonomous taxation for manufacturing companies or distribution of products
refined petroleum
1-Manufacturing companies or distribution of refined petroleum products stay
obliged, for tax purposes, to adopt the FIFO methods ( First In First Out ) or the Cost
Weighted Average in the costing of the raw materials consumed, owing to the
same method for all the inventories that have a similar nature and use in the
successive exercises.
2-A positive difference between the gross margin of production determined on the basis of
application of the FIFO methods ( First In First Out ) or of the Weighted Average Cost on the cusp
of the raw materials consumed and to be determined on the basis of the application of the method of
costing adopted in accounting is subject to autonomous taxation in IRC, at the rate
of 25%.
3-A Autonomous taxation in IRC ascertained in the terms of the previous number is not
deductible for any effects in the determination of taxable profit, both in accounts
individual as in group optics.
4-You are veheto the repercussion in the price of the products sold of the charge borne with the
autonomous taxation in IRC, by the regulatory authority of the competition to its
supervision.
5-The provisions of the preceding paragraphs shall apply to the exercises of 2008 and following.
Article 5.
Production of effects
1-The amendments made by this Law to Articles 78 and 85 of the IRS Code and
to Article 112 of the IMI Code have produced effects since January 1, 2008.
2-A change to the period of exemption referred to in Article 46 of the Staff Regulations
Tax Benefits, with the wording given by this Law, shall apply to the exemptions in which the
period of 6 or 3 years of the benefit is still beholdant or has become extinct in the year 2008.
Article 6.
Entry into force
This Law shall come into force on the day following that of its publication.
Seen and approved in Council of Ministers of July 10, 2008
The Prime Minister
The Minister of the Presidency
The Minister of Parliamentary Affairs