Meet the Law | Industrial Tax Code

Law n. 26/20 of 20 July, 2020 amending the Industrial Tax Code has been recently published. We would like to highlight the most relevant changes:

•    Tax rate reduction - Reduction of the general tax rate from 30% to 25% and from 15% to 10% in agricultural, aquaculture, apiculture, poultry, livestock, fishing and forestry activities;
•    Tax rate for Banking, Insurance and Telecommunications Operators - Increase of the tax rate to 35% for banking and insurance activities and also for telecommunications operators;
•    Increase of withholding tax rate - The withholding tax rate applicable to services provided by non-resident entities rises from 6.5% to 15%;
•    Elimination of Group B and introduction of a simplified tax regime - The Industrial Tax Code now provides for a general regime and a simplified taxation regime (companies with a turnover or import operations of USD 250,000 or less);
•    Loss carry forward - Increase of the period for carrying forward tax losses to 5 years (previously 3 years);
•    Withholding tax credit - Elimination of the 5-year time limit for carrying forward the credit of Industrial Tax withheld;
•    New rules for assessment of provisional tax - Amendment to the rules for assessment of provisional tax of 2% (will also include services provided which are expressly excluded from the withholding tax regime);

Changes will enter into force next 19 August, 2020.

In collaborattion with: FTL Advogados
FTL Advogados is the local correspondant of CMS Rui Pena & Arnaut.