Category Bullets

State Budget Bill 2020



  • Incentive called “Young IRS”. An IRS exemption of 30%, 20% and 10%, respectively, applies for the first three years of dependent employment income earned by young people aged 18 to 26 years after the completion of a level 4 study cycle ( secondary education) or higher.
  • Deductions from dependents - In case of joint parental responsibility and alternate residence of the minor, a deduction of € 300 and € 150 is proposed.
  • Taxes such as corporate income are now excluded from capital gains arising from the transfer to the private sphere of the entrepreneur of residential property which is affected by the activity of the entrepreneur and which is immediately affected by the obtaining of property income;
  • Local Housing: A 50% taxation of the amount of income generated from the local housing activity in the housing or trimming mode is foreseen;
  • IRS general rate table echelon limits are updated by 0.3%; and,
  • There may be environmental deductions allowing a deduction from the IRS collection.



  • The tax base subject to the reduced rate of 17% (12.5 - in inland territories) applicable to taxable persons qualifying as Small and Medium Enterprises (SMEs) will be increased from € 15,000 to € 25,000.
  • The aggravation of autonomous taxation for companies with losses in the first two tax periods is eliminated;
  • Consideration in 130% of expenses incurred with the purchase of social passes for the benefit of the company's staff or retirees and their families;
  • 10% rate applicable to charges for passenger cars, light goods, motorcycles and motorcycles, with purchase cost up to € 27,500; and,
  • The extension of the period of validity of SIFIDE II (until 2025).


Other taxes:

  • There is a general increase of around 0.30% in the value of IUC, ISV and IABA;
  • A new IMT rate of 7.5% is foreseen, applicable to the acquisition of urban housing buildings;
  • The exemption from IMI granted to buildings classified as national monuments and buildings individually classified as of public or municipal interest will be revoked;
  • OE 2020 makes clear the deductibility of input tax on electricity used in plug-in hybrid or electric vehicles; and,
  • Finally, it is foreseen the creation of electricity consumption levels based on the contracted power model existing in the Portuguese electricity market, benefiting lower electricity consumption and penalizing excessive consumption.

Law Proposal:

State Budget 2020 Report: