Flash News NA 2025/04/03
New Tax Simplification Measures Approved by the Portuguese Government
The Portuguese Government has recently approved eight new tax simplification measures, adding them to the thirty already included in the Tax Simplification Agenda. These initiatives aim to reduce bureaucracy, facilitate tax compliance, and increase the transparency of the tax system.
As part of its ongoing commitment to improving the tax system, the Portuguese Government has approved, in the Council of Ministers, eight new tax simplification measures. These measures complement the 30 previously established in the Tax Simplification Agenda, presented in January of this year, and are primarily aimed at making the tax system more efficient and accessible for both individuals and businesses.
Newly Approved Measures
The newly approved measures include:
1. Simplification of impairment recognition rules for non-current assets for corporate income tax (IRC) purposes: This measure aims to simplify the process of recognizing losses on long-term assets, making tax compliance easier for businesses.
2. Flexibility in choosing the VAT regime (monthly or quarterly): Businesses will have greater flexibility in selecting the VAT regime that best suits their needs, allowing for more efficient cash flow management.
3. Exemption from the declaration of business activity for isolated acts: The range of situations in which it is not necessary to submit a declaration of business activity has been expanded, simplifying procedures for taxpayers who carry out occasional transactions.
4. Extension of the deadline for submitting the Model 10 declaration: The deadline for submitting this declaration, related to payments made to third parties, has been extended, giving businesses more time to meet this tax obligation.
5. Exemption from submitting physical plans for real estate assessment: The requirement to submit physical plans for real estate assessment purposes has been eliminated, simplifying the process and reducing administrative costs.
Implementation of Previous Measures
In addition to the new measures, 13 of the 30 measures already planned in the Tax Simplification Agenda have been implemented, including:
• Simplification of periodic VAT return submission: When there are no taxable transactions, submission is now automatic, eliminating the need to file a "zero" return.
• Simplification of the Simplified Business Information (IES): Annexes Q and O have been removed, reducing the bureaucratic burden on companies.
• Simplification of customs and tax formalities for postal shipments of goods valued under €1,000: A simplified procedure has been created for these situations, facilitating low-value trade.
• Expansion of withholding tax exemptions for payments under €25: This measure applies to categories B, E, and F, reducing the need for withholding tax on small payments.
• Elimination of the mandatory settlement meeting in tax audits: The meeting is now optional for the taxpayer, simplifying the tax audit process.
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Conclusion
The recently approved measures reflect the Government’s commitment to making the Portuguese tax system simpler, more transparent, and fairer. By reducing bureaucracy and facilitating tax compliance, these initiatives contribute to business competitiveness and the strengthening of the national economy.
