MACEDO VITORINO released today the new edition of its report WHYPORTUGAL.

WHYPORTUGAL 2021 provides entrepreneurs considering investing in Portugal essential information on the creation and organisation of companies, partnership contracts, employment law, tax law, intellectual property, real estate and litigation.

After more than a year of pandemic with successive confinements, the second half of 2021 has been a time of recovery.

As part of the European response to the pandemic crisis, gave the Member States a total amount of €806.9 billion, Portugal adopted a Recovery and Resilience Plan (RRP), to be implemented until 2026, which seeks, among other things, to promote climate transition and digital transition, strengthen the National Health System, and invest in infrastructure and business capitalisation and innovation. By 2026, the government plans to invest around EUR 50 billion.

Since 2013, MACEDO VITORINO publishes the WHYPORTUGALreport annually, having created in 2018 electronic platform where the report is available, along with essential legal and economic information, including: legislation, official forms, international and national reports.

The WHYPORTUGAL 2021 report reflects a country heavily scarred by the pandemic still and a chronic lack of improvement in key sectors as well, notably justice, public administration and taxation. The RRP promises significant investments in public administration and the public sector in general. Let us hope that they happen” said António de Macedo Vitorino, the partner responsible for the project.

The main goal of the report is to provide an objective view of reality and, because of that, we cannot fail to point out that we are far from the countries of reference. But even so Portugal has shown that it has the capacity to attract international investors. Security, social consensus around the values of openness and freedom of European society, which are so important today, as well as the qualifications of our workforce are today the essential factors in attracting investors in all sectors, namely tourism and real estate, industry and technology” added António Vitorino.

WHYPORTUGAL 2021reviews the main aspects to be considered by foreign investors looking at Portugal as a country worth investing in: such as how to set up a business, government incentives, employment, tax system, intellectual property protection and judicial system.

Visit us at https://www.macedovitorino.com/en/why-portugal/.

The Portuguese Government submitted to the Parliament the State Budget proposal for 2022. In this newsletter we review the main tax changes proposed by the Government, which will now be discussed and approved by the Parliament.

Personal Income Tax (PIT)

In what concerns Personal Income Tax (PIT), the main changes are as follows:

  • Return Programme. The return programme, which exempts 50% of the employment income and professional income obtained by taxpayers who became Portuguese residents in 2019 and 2020, will be extended to taxpayers that become residents in 2021, 2022 and 2023 provided that they have not been residents in the three previous years.
  • Youngsters partial PIT exemption. A partial PIT exemption will apply to employment income and professional income obtained by taxpayers with the ages of 18 to 26, who are not dependents, after the conclusion of an education level equal to or higher than level 4 (in the case of level 8, the exemption may extend until the age of 28). The exemption will apply in the first 5 years after the conclusion of the required level of education and will cover:

(i) 30% of the income in the first two years, with a limit of 7.5 times the value of the Social Support Index;
(ii) 20% of the income in the following two years, with a limit of 5 times the value of the Social Support Index; and
(iii) 10% of the income in the last year, with a limit of 2.5 times the value of the Social Support Index.

  • Inclusion of capital gains in the annual tax returns. The positive balance between capital gains and capital losses arising from the disposal of shares and other securities held for less than one year will cease to be subject to flat rate of 28% and will have to be included in the annual tax returns if the taxpayer has a total taxable income equal to or greater than €75,009. The negative balance can be deducted in the following 5 years.
  • Change of PIT brackets. The current seven PIT brackets will be increased to nine, with the introduction of the following new brackets:

(i) A new third bracket (between €10,736 and €15,216) subject to a rate of 26.5% (instead of 28%); and
(ii) A new sixth bracket (between €36,757 and €48,033) subject to a rate of 43.5% (instead of 45%).

In parallel, the maximum limit of the eight bracket will be reduced from €80,882 to €75,009 and, as such, any income above this amount will be subject to the higher rate of 48%.

Corporate Income Tax (CIT)

On the Corporate Income Tax (CIT) side, we highlight the following changes:

  • Non-deductible expenses. Invoices issued by taxpayers who are not registered with the tax authorities will not be deductible for CIT purposes.
  • Tax exemption on IP income. The PIT exemption on income derived from the assignment (or temporary use) of industrial property rights subject to registration will be increased from 50% to 85%.
  • Special advance payment. The Special Advance Payment (the so-called “Pagamento Especial por Conta” or “PEC”) will be eliminated. The rules on the deduction and refund of the PECs paid in the previous years will remain in force.
  • Autonomous taxation relif. The 10% increase of the autonomous taxation will not apply to micro, small and medium-sized companies in 2022 if they (i) have obtained taxable profit in one of the three previous tax periods and (ii) have filed the annual tax returns in the two previous tax periods.
Value Added Tax (VAT)

The Budget proposal also includes a few changes on the Value Added Tax (VAT):

  • Filing of VAT returns. The deadline for filing the VAT returns will be the 20th day of the second month following the relevant month or quarter (depending on whether the taxpayer is subject to the monthly or quarterly VAT filing regime).
  • Payment of VAT. The deadline for the payment of the VAT will be the 25th day of the second month following the relevant month or quarter (depending on whether the taxpayer is subject to the monthly or quarterly VAT filing regime).
  • Filing of the IES / DA and submission of the SAF-T file. The implementation of the new rules set out in Ordinance No. 31/2019 for the submission of the SAF-T (PT) file on accounting was postponed to the years 2023 and following, with first delivery scheduled to the year 2024.
  • Suspension of ATCUD in 2022. The affixing of the unique document code (ATCUD) on invoices and other documents relevant for tax purposes was postponed to 2023.
  • Excess energy from self-consumption. Invoicing of the excess energy from self-consumption will be issued by the buyer instead of the supplier.
Excise Duties

In what concerns Excise Duties, the Budget Draft contemplates the following changes:


  • Electricity produced for self-consumption. A tax exemption will apply to electricity produced for self-consumption from renewable energy sources up to a limit of 30 kW of the installed capacity.
  • Additional to the TOEP rates. The additional TOEP rate of 0.007 euros/l for gas and 0.0035 euros/l for diesel and colored and marked diesel will remain in force in 2022, up to a limit of €30,000,000 per year.
  • Products used in the production of electricity, electricity and heat or city-gas. Some products will be taxed at 100% of the TOEP rate and at 100% of the CO2 rate while others will be subject to lower rates (e.g. cogeneration processes).


The Government proposes an increase on taxes on alcoholic drinks and non-alcoholic drinks. Tabaco tax rates will also increase.


The Vehicles Tax rates applicable to the acquisition of cars, motorbikes, tricycles and quadricycles will be adjusted upwards taking into account their cylinder capacity and environmental component.


The Budget Draft includes a general increase of around 1% in the Single Circulation Tax rates applicable to all vehicles and keeps in force the additional tax for diesel vehicles in categories A and B.

Real Estate Transfer Tax (RETT)

In what concerns Real Estate Transfer Tax (RETT), the main highlights are:

  • Extension of RETT. RETT will apply to the following transactions:

(i) Transfer of real estate by the shareholders to the company for the payment of accessory capital contributions;
(ii) Award of real estate to the company’s shareholders upon a share capital reduction, the repayment of accessory capital contributions or the performance of other company’s obligations towards its shareholders; and
(iii) Award of real estate to participants in closed-end real estate investment funds in connection with the redemption of the investment units or the reduction of the funds’ capital.

  • Amendment to the tax brackets. The RETT brackets applicable to the acquisition of urban buildings or units of urban buildings allocated to housing will be updated.
  • Transfer of parts of a building. Upon the transfer of parts of a building, a surface/usufruct right or the land separated from the building RETT will be charged at a rate corresponding to the overall value of the building, considering the part or right transferred.
  • Incentives to urban rehabilitation. The RETT exemption on the first transfer of buildings or units subject to urban rehabilitation will expire if:

(i) The property is used for a purpose other than primary residence / lease for primary residence within six years from the date of transfer; or
(ii) The property is not used as primary residence within six months from the date of transfer; or
(iii) A lease contract is not entered within one year from the date of transfer.

Real Estate Tax (RET)

The Budget Draft does not include material changes to the Real Estate Tax, save for the following:

  • Urban buildings rented prior to the Urban Rental Regime. The communication of rents due under rental contracts entered before the Urban Rental Regime must be made between 1 January and 15 February of the following year according to the official models and procedures.
  • RET exemption. The €153,300 household income threshold applicable to the RET exemption on urban buildings or units built, improved or acquired for residential purposes will be assessed based on the total household gross income instead of its taxable income.
Stamp Duty

According to the Budget Draft the 50% increase of the stamp duty rates applicable to consumer credit contracts will remain in force in 2022.

Special Contributions

The following special contributions will also remain in force in 2022:

  • Banking Sector Contribution;
  • Banking Sector Additional Solidarity Levy;
  • Audio-Visual Sector Contribution;
  • Pharmaceutical Industry Contribution;
  • Energy Sector Extraordinary Contribution (CESE);
  • Extraordinary contribution on the suppliers of medical devices industry of the National Health Service; and
  • Contribution on single-use plastic or aluminum packaging in finished meals.

A new special contribution for the conservation of forest resources will be approved and must be regulated within 90 days.

Tax Benefits

The Budget Draft proposes the following amendments to the tax benefits:

  • Recovery Tax Incentive. A new Recovery Tax Incentive applicable to CIT taxpayers will be created. The incentive will consist of a CIT deduction in 2022 equal to 70% of the investment expenses (up to an accumulated amount of € 5,000,000) which are made in the first 6 months of the 2022 tax period, corresponding to:

(i) 10% of the eligible expenses (e.g., tangible fixed assets (with some exceptions) acquired as new and that have entered into operation by the end of the 2022 period or intangibles subject to depreciation), up to the amount corresponding to the simple arithmetic average of the eligible investment expenses of the three previous tax periods; and

(ii) 25% of the eligible expenses, in the part exceeding the above-mentioned limit.

To benefit from this incentive, among other conditions, the taxpayer may not:

(i) Terminate employment contracts during three years from the beginning of the tax period in which the eligible investment expenditure is incurred, either through a collective dismissal or a job extinction procedure; and

(ii) Distribute dividends during three years from the beginning of the taxation period in which the eligible investment expenses are incurred.

  • Support for the implementation of SAF-T (PT) and ATCUD. For micro, small and medium-sized enterprises, the extraordinary support corresponding to 120% of the respective expenses accounted in the 2022 tax period will remain in force.
  • VAT on donations. The exemption from VAT of transfers of goods and services provided free of charge is now limited to 25% (as a whole) of the amount of the donation received.
Other Fiscal Measures

The Budget Draft also includes the following COVID-19 related support measures:

  • Payment of debts in instalments. In the tax enforcement proceedings initiated between 1 January and 31 December 2022, the number of monthly instalments will be increased up to five years, regardless of the amount owed. Until 31 January 2022, debtors with installment plans in force may request the application of this exceptional regime, in which case the remaining installments will be added to the approved installment plan up to a limit of five years.
  • Deferral of tax obligations in the first half of 2022. In the first half of 2022, PIT and CIT withholding tax and VAT may be paid in three or six-monthly instalments in a minimum amount of € 25.00, without interest or penalties, by submitting a request until the end of the period for voluntary payment. These rules will also be applicable to taxpayers that fulfil one of the following conditions:

(i) Recorded in 2020 a turnover up to the thresholds applicable to micro, small and medium companies and, cumulatively, declare and demonstrate a decrease in turnover reported through the e-invoice of at least 10% of the monthly average of the calendar year of 2020 in relation to the same period of the previous year;
(ii) Have as main activity the accommodation, catering and similar, or culture; or
(iii) Have initiated or restarted the activity on or after 1 January 2021.
With regards to the obligation to pay VAT, in the case of taxpayers subject to the quarterly VAT filing regime, in the first semester of 2022 VAT may also be paid in three or six-monthly instalments in a minimum amount of EUR 25.00, without interest or penalties.

Legislative Authorisations

In addition to the above proposed changes, the State Budget contemplates the following legislative authorisations for the Government to approve the following amendments:

  • Inland Support Programme. The Government will create, within the scope of the Inland Suppport Programme, a set of tax benefits for the creation of jobs in inland territories, including a deduction of 20% of the expenses incurred with the creation of jobs that exceed the value of the statutory minimum wage.
  • Start-up support. The Government will regulate the concept of "start-ups" for the purposes of granting financial or fiscal support, with a view to promoting the national entrepreneurial ecosystem and defining specific investment policies.
  • Stock option plans. The Government will approve a special tax regime applicable to gains derived from option plans, subscription plans, allocation plans or other plans with equivalent effects on securities or equivalent rights that are created for the benefit of employees or members of corporate bodies.

Through Decision nº. 272/2021, the Portuguese Constitutional Court held that companies with headquarters outside Portugal who hold, control or have a group relationship with a Portuguese company, are jointly liable for debts arising from the employment relationship established with the latter, or from its termination, that have been overdue for more than three months, the same way that Portuguese companies who are based in Portugal and belong to same group are both liable.

The interpretation in question is based on the Portuguese Labor Code (article 334), Portuguese the Commercial Companies Code (article 481), and the principle of equality.

It is relevant to highlight the essentials of the legal provisions under analysis:

(i) Article 334 of the CT

This article provides on the guarantees of the employee's credits in the event of breach of the employment contract, establishing as a rule of law the joint liability of the Employer and the company "that is in a relationship of reciprocal participation, dominium or group, under the terms foreseen in articles 481 and following of the Commercial Companies Code".

(ii) Article 481 of the CSC

It defines the scope of application of the legal regime of related companies, provided in articles 481 to 508-F, subordinating it to the cumulative verification of two assumptions: (i) legal form of the subjects intervening in the relationship of affiliation and (ii) with the spatial scope of application of the rules enshrined in Title VI of the same Code.

Essentially, the Court decided that just as an employee can sue two related companies who belong to the same group for labor claims when both are based in Portugal, he/she can also do so even when one of them is based outside Portugal. If he could not do so, that is, if he could only sue them when both are based in Portugal but could not do so when one of them is based abroad, we would be violating the principle of equality (article 13.º of the Portuguese Constitution).

The Court considered such a differentiation not to be "reasonable, rational and objectively founded" as well as contrary to the Portuguese Constitution.

In its reasoning, the Court stated that attracting foreign investment is not a sufficiently strong and weighty reason to justify, within the scope of the law applicable to the coalition of companies, an unequal treatment that would derive from the attribution of different guarantees for labor claims to employees of controlled, dependent, or grouped companies, depending on whether the company with which it is related had its head office located abroad or in national territory.

In conclusion: the interpretation of the law declared unconstitutional is based on the impossibility of applying the regime of joint and several liability of a company that is in a relationship of reciprocal participation, dominion, or group, when it is headquartered outside national territory, for credits arising from an employment contract, or from its breach or termination, that are overdue for more than three months.

The scope and the reasoning of the decision only involves labour credits, which means that it is not expectable that the Constitutional Court would rule in similar terms for other type of credits.

Four years after the elimination of roaming charges in the UE on June 15, 2017, the Portuguese Presidency of the Council will start negotiations with the European Parliament to recast the rules on roaming services. Regulation (UE) 2015/2120, used to abolish roaming service charges, will remain in force until June 30, 2022. As a result, Member States' ambassadors have agreed on a negotiating mandate to extend the current regulatory framework on roaming on public mobile communications networks in the UE.
The increase in the use of voice, SMS and, in particular, citizen data roaming services does suggest that there are benefits in abolishing roaming charges. Nevertheless, the European authorities consider that a true internal telecoms market requires the complete elimination of discrepancies between domestic and roaming services.
A market assessment carried out by the Commission on November 29, 2019, shows that, in essence, not only has there been no change in the level of competition, but that it is not expected to change. Considering also that there is no single mobile network covering all member states, providers depend on access from different operators in the visited member states to provide mobile communication services to their customers across the UE, the Commission concludes that the market is not ready to remove the current regulation.
In addition to measures for certain segments, the proposal establishes that the duration of the free "roam-like-at-home" experience should be extended for another ten years, until 2032. Wholesale prices, for example, will be increased, as is essential to ensure the sustainability of the market, from €0.004/sec and €2.00 for SMS messages and per gigabyte of data transmitted to €0.007/sec and €2.25 respectively.

The European Commission (EC) published the final version of the Standard Contractual Clauses (SCCs) on June 4, following the draft proposal on November 12, 2020. The topic is of great interest for companies operating outside the European Economic Area (EEA) or working with companies that are. SCCs should give these companies a hand at being GDPR-compliant.
For those less acquainted with SCCs, these take part in ensuring safer international data transfers. A principle of accountability applies to controllers which export personal data to countries outside of the EEA: controllers must ensure that no matter what mechanism and supplemental measures govern a data transfer, the data must receive the same protection at its destination as it would in the European Union (EU), or else the data transfer will be violating the GDPR.
For international data transfers to be possible, the GDPR requires the adoption of mechanisms/measures that ensure that transfers are carried out safely, which may include obtaining the data subject’s consent, adopting Binding Corporate Rules (BCR), ad hoc contractual clauses, approving codes of conduct or certification mechanisms, and/or SCCs.
SCCs set out appropriate safeguards regarding data transfers from (i) controller to controller, (ii) controller to processor, (iii) processor to processor, and (iv) processor to controller.
The new SCCs include general provisions that are applicable to all transfers of data, regardless of the nature of the parties, and specific provisions that the parties should include if they see fit to their specific situation (again, a principle of accountability applies). General obligations include ensuring that data protection rules in the country of destination do not prevent the processing of personal data according with the standard contractual clauses applied, as well as ensuring the minimization of data disclosure to public authorities, a shared responsibility between the parties in case of a data breach, etc.
The new SCCs also address both onward transfers and subscription by third parties. Onward transfers of personal data can lawfully occur, provided the third party subscribes to the SCCs. Subscription to the SCCs is enabled through a docking clause.
The EC sets out a transitional period, within which companies relying on old SCCs under existing data transfer agreements will be able to rely on those outdated SCCs for 18 months after the publication of the new SCCs. For companies entering into new data transfer agreements, the new SCCs ought to be the mechanism to rely on for the purpose of international data transfers, as the new SCCs will be repealed for future use three months after their publication.


The General Contractual Clauses Legal Regime (or 'LCCG') has been amended and now forbids fine print and tight line spacing in contractual terms drafted without prior individual negotiation with their addressees – usually consumers.
General contractual terms are one of the most frequently used contractual instruments in consumer contracts, for example, when opening a bank account, in insurance contracts or contracts for electricity, water or electronic communications supply.
Since there is no negotiation (between the parties) involved, since its recipients merely subscribe to or accept its content, LCCG provides mechanisms to prevent abuse, such as special duties of information and communication towards recipients and a list of prohibited clauses. There are two groups of prohibited clauses under LCCG: (i) absolutely prohibited clauses, which are void, such as clauses excluding or limiting liability for life damage, moral or physical integrity or health, or for non-contractual property damage and (ii) relatively prohibited clauses, which, depending on the situation, may or may not be forbidden, meaning that, in case of a dispute before a court, the clauses will be subject to review. These are, for example, clauses setting excessive deadlines for the acceptance or rejection of bids or penalty clauses disproportionate to the damage.
To enhance transparency, recently published Law 32/2021 of 27 May 2021 (which amends the LCCG), establishes drafting rules: font size may not be smaller than 11 or 2.5 millimetres, and line spacing cannot be less than 1.15. In case of non-compliance, the clause will be null and void, as this prohibition becomes part of the list of absolutely forbidden clauses.
This does not mean, however, that "small print" was allowed before. This issue has been addressed by case law on the violation of the duties of information (in this regard, for example, the ruling of the Supreme Court of Justice of 15 May 2008, the ruling of the Lisbon Court of Appeal of 13 October 2016 and, recently, the ruling of the Court of Appeal of 28 January 2021), all of them considering that it is not enough to formally comply with the duties of information, and that this obligation must be fulfilled in accordance with a “reasonableness criterion” to make all pieces of information of the contract known by the consumer.
Law 32/2021 also provides for a control and prevention system of unfair terms to be set up in the upcoming months to ensure that clauses forbidden by a court decision are not applied by other entities. Entities using general contractual clauses will have to be more careful with disputed cases involving general contractual clauses that have already been prohibited by a court decision. This mechanism intends to decrease imbalance between the parties.

Almost 100 days and over 500 bids into the main bidding phase of the Portuguese 5G auction, on May 31, 2021, ANACOM proposed an amendment to the auction’s regulation (Regulation 987-A/2020 of November 5).
According to available data, bidding in the 700MHz, 900MHz, 2,1GHz and 2,6GHz bands stalled as of the 24th day, with an aggregated price of 154,58 million euros. However, in the forty available 3,6GHz blocks (frequency blocks H1 to J30), a furious bidding contest is still ongoing with bids reaching 162,89 million euros, i.e., a 244% increase over the reserve price of 44,86 million euros.
Although the bidder’s identities are yet to be confirmed, the increase in the current bid average price per MHz (in the 3,6GHz band) from 0,38 million euros to 0,61 million euros and an unusually vocal dispute in the media, suggest an undergoing bidding war among new entrants and incumbents. With the total amount reaching 317,47 million euros, mixed reactions are heard throughout the market with the Government simultaneously expressing satisfaction with the unexpected tax windfall and concern over the consequences of the delay, and incumbent operators voicing concerns over the detrimental impact that mounting spectrum costs might have on network rollout investment.
The proposed amendments will extend the length of the rounds, which will now take place daily between 9:00 and 19:00. Also, each round duration will be halved from the current 60 to 30 minutes, thus allowing 12 rounds to occur.
With these changes, ANACOM expects to prevent the excessive extension of the 5G Auction. If approved, as of June, bidders are expected to form more robust and refined expectations about the spectrum they are most likely to win and the maximum amount they are willing to bid for it, which should lead to a reduction in the time needed for bidders to complete their bids. An important feature in the draft Regulation, ANACOM recognized that the unexpected extention of the Auction already affected short-term investment in commercial offers and hinted that further action may be taken in the near future.
Bidders will now have five working days to comment on these proposed changes. One question remains: are these too little too late?


Considering that Artificial Intelligence (AI) can bring a range of economic and social benefits, but also create new risks, the European Commission recently published a Regulation Proposal on a European Approach for Artificial Intelligence (the ‘AI Draft Act’ or ‘Draft Act’).
Following a public consultation on the Commission’s White Paper on AI of February 2020, the AI Draft Act aims to harmonize existing laws on AI, ensure the protection of fundamental European Union (EU) rights and safety of AI system users, as well as trust in the development and uptake of AI.
The Draft Act applies to public and private players (i.e., providers, importers, distributors, and users of AI systems) established within the EU or in a third country that places AI systems on the market or puts them into service within the EU, or where their use affects people located in the EU. The Draft Act is divided into twelve titles of which we highlight the following:

  • Scope and definitions (Title I): including, among other definitions, ‘AI’ and ‘AI system’. ‘AI system’ is broadly defined as a software product developed using certain listed techniques and approaches that can generate outputs influencing the environments they interact with;
  • Prohibited AI practices (Title II): the Draft Act uses a risk-based approach distinguishing between (i) unacceptable risk (e.g. AI systems that can exploit vulnerabilities of a specific group of persons or use real-time remote biometric identification in publicly accessible spaces, subject to some exceptions); (ii) high-risk to the health and safety or fundamental rights of natural persons (e.g. AI systems that perform a safety function in certain products, such as mobile devices, robotics, medical devices and other machinery); and (iii) low or minimal risk (e.g. AI-enabled video games or chatbots);
  • High-risk AI systems (Title III): once a high-risk AI system is identified, compliance obligations should be reinforced (Title IV), including obligations covering risk management, data governance, technical documentation, record-keeping requirements, transparency and provision of information to users, human oversight, robustness, accuracy, cybersecurity, post-market monitoring and incident reporting;
  • Governance, enforcement and sanctions (Titles VI to XII): the Draft Act provides for the establishment of a European Artificial Intelligence Board (EAIB) composed by the national supervisory authorities and the European Data Protection Supervisor. The AI Draft Act provides for substantial penalties of up to EUR 30 million or up to 6% of annual worldwide turnover, whichever is higher to be levied against companies for non-compliance.

Once discussed (and probably subject to changes) and approved by the European Parliament and the Council, the AI Regulation will apply directly across the EU and with a wide-reaching impact.


Law 21/2021 introduced several amendments to the Tax Benefits Code, the Stamp Duty Code, the Investment Tax Code, the Vehicles and Circulation Tax Codes. It also created an extraordinary measure for counting deadlines within the scope of Corporate Income Tax (“CIT”).
The application of these measures, unless otherwise specified, are retroactive to 1 January 2021.
In this newsletter we analyze the main tax changes introduced by the Diploma.

Tax Benefits Code

The main changes to the Tax Benefits Code are as follows:
Extension of certain tax benefits:

  1. Tax benefits to the financial system and capital markets, sponsorship and others: 31 December 2025 (with retroactive effect from 1 January 2021);
  2. Tax benefits relating to intellectual property income: 31 December 2021 (with retroactive effect from 1 January 2020);
  3. Tax benefits relating to the Madeira Free Trade Zone and the Santa Maria Free Trade Zone: 31 December 2027 (with retroactive effect from 1 January 2021).

Madeira Free Trade Zone. The income of entities licensed to operate in the Madeira Free Trade Zone from 1 January 2015 up to 31 December 2021 are subject to CIT until 31 December 2027, at a 5% rate. This benefit is, however, subject to one of the following applicable annual limits:

  1. 20,1% of the annual gross value added generated in the Autonomous Region of Madeira;
  2. 30,1% of the annual labor costs incurred in the autonomous region of Madeira; or
  3. 15,1% of the annual turnover generated in the autonomous region of Madeira.

Other benefits:

  1. Income paid by collective investment undertakings to their unitholders will now be excluded from the tax benefit limitation rule;
  2. Interest and rents payable in connection with loans and industrial, commercial or scientific equipment leases granted by non-resident entities will be exempt from PIT and CIT without the need of prior approval of the Minister of Finance;
  3. Entities managing designations of origin and geographical indications of wines, vinegars, spirit drinks of vinic origin and aromatized wine products recognized under the terms of the applicable legislation will be exempt from CIT.
Investment Tax Code

The deadline for contractual tax benefits and regional state aid, in accordance with the national state aid map, is extended until 31 December 2021.

Stamp Duty

The Stamp Duty Code now provides for an exemption from Stamp Duty on the report of securities or equivalent rights carried out on a regulated market or multilateral or organized trading system, as well as on report and financial guarantees carried out by financial institutions, namely by credit institutions and financial companies, with the intermediation of central counterparties.

Vehicles and Circulation Tax Code

They are revoked with effect from 1 July 2021:

  1. ISV exemption. Light goods vehicles with open, flat, or closed boxes, which do not have a cabin integrated into the body, with a gross weight of 3500 kg, without four-wheel drive are now exempt from payment of ISV;
  2. Circulation Tax Code. The exemption from payment of 50% of the single circulation tax for category D vehicles has been revoked.
Corporate Income Tax Code

Is suspended, during the 2020 tax period and during the following tax period, with retroactive effect from 1 January 2020, the computation:

  1. The deadline for reinvestment of the realization values;
  2. The deadline for deducting from taxable income expenses that could not be deducted in the period to which they relate, due to insufficient taxable income, regarding research and business development expenses in the Autonomous Region of Madeira.

E-signatures are essential to verify the identity of individuals and businesses online and to ensure authenticity of electronic documents.
In the European Union (‘EU’), electronic identification and trust services (‘eIDAS’), where e-signatures are included, are ruled by Regulation (EU) 910/2014 on electronic identification and trust services for electronic transactions in the internal market (‘eIDAS Regulation’), which came into force in July 2016.
Although the eIDAS Regulation is directly applicable in all Member States and does not require implementation by local laws, certain specifics such as validity, effects and legal value of e-signatures and e-documents require local regulation that must be in line with the eIDAS Regulation.
In Portugal, local eIDAS specifics are governed by Decree-Law 12/2021, of February 9, 2021 (‘Portuguese eIDAS Law’), which is effective since March 11, 2021.
At the same time, the upcoming obligation for companies with FYE on December 31, 2020 of   holding their general meetings of shareholders to approve annual accounts until March 31, 2021 leads us to the rules on ‘e-shareholder meetings’, i.e. meetings held using electronic means. 


E-signatures are generally accepted in Portugal in the EU. However, their value as evidence varies according to the type of signature.
The eIDAS Regulation establishes the following types of e-signatures:

  • Simple e-signature: data in electronic form which is attached to or logically associated with other data in electronic form, and which is used by the signatory to sign, as set out in the eIDAS Regulation. For example, writing a name on an e-mail may be considered a simple e-signature.
  • Advanced e-signature: an e-signature which additionally is (i) uniquely linked to and capable of identifying the signatory, (ii) created in a way that allows the signatory to retain control and (iii) linked to the document in a way that any subsequent change of the data is detectable.
  • Qualified e-signature: an advanced e-signature which additionally is (i) created by a qualified signature creation device and (ii) based on a qualified certificate for e-signatures. The use of a qualified e-signature means (i) that the signatory of the document is the individual identified by the qualified signature; (ii) that such individual had the intention to sign the document; and (iii) that the content of the document signed with the qualified e-signature has not changed since it was e-signed.

Only the qualified e-signature has the same value as evidence of a handwritten signature.
Nevertheless, the other types of e-signatures may be used:

  • If the contracting parties agree to use other types of e-signatures (simple or advanced), subject, however, to mandatory provisions on the form required for certain agreements; or
  • If someone submits an electronic document signed with other type of e-signature and the counterparty accepts such e-signature as valid. 

Qualified e-signatures based on qualified certificates issued in one EU Member State are acknowledged as qualified e-signatures in all other Member States. Providers of qualified certificates for e-signatures in each Member State are listed in the Trusted List.
As the United Kingdom (‘UK’) is no longer a member of the EU, qualified e-signatures based on qualified certificates issued by providers in the UK are not automatically recognised and accepted in the EU. The UK eIDAS Regulations, which are an amended form of the EU eIDAS Regulation and retain many aspects of the EU regulation, are tailored for use within the UK.


Electronic documents are valid in Portugal. If the electronic document meets the requirements to be considered a written document – i.e., if it may be represented as a written statement – it will be considered equivalent to a paper document in written form.
Such electronic document signed using a qualified e-signature will be equivalent and have the same value as evidence as a paper document with a handwritten signature. The value as evidence of electronic documents signed with simple e-signatures or advanced e-signatures will be freely assessed by the court, which means additional evidence could be required to demonstrate the content of such documents.
If the electronic document cannot be represented as a written statement, it will have the value as evidence of a photograph or of a copy, even if signed using a qualified e-signature.
Copies of e-signed electronic documents that do not allow the verification and validation of e-signatures may have the same value as evidence of the original if they are certified by a notary.
Under the Portuguese eIDAS Law, the dispatching of electronic documents is subject to the following rules:

  • An electronic document sent by electronic means is deemed sent and received by the addressee if it is transmitted and received at the electronic address agreed by the parties;
  • The date and time of creation, dispatch or receipt of an electronic document containing a time stamp issued by a qualified trust service provider is effective between the parties and against third parties;
  • An electronic document with a qualified e-signature or a qualified electronic seal sent by electronic means that ensure effective receipt is equivalent to dispatching by registered post. If receipt is confirmed by a confirmation message addressed to the sender by the addressee in an identical form, it is equivalent to dispatching by registered post with acknowledgement receipt;
  • Dispatching of data and documents using qualified electronic registered mail services is equivalent to using registered post with acknowledgement receipt.

Although usually shareholder general meetings take place in the corporate head-offices, it is possible for shareholders of Portuguese companies to hold general meetings using electronic means, unless the company’s articles of association establish otherwise.
Some aspects must, nevertheless, be taken in consideration when deciding to hold the meetings electronically:

  • It is an option of the company and not of the shareholders; and
  • The company must put in place technical means to allow confirmation of identity of the shareholders attending the meeting, ensure authenticity and safety of communications in the meeting and to keep a full record of the meeting. 

This means, for example, that the notice of the meeting must specify that the meeting is to be held electronically and that the company must provide the shareholders the information required to access the meeting.
Even though the meetings are held electronically, minutes containing the record of discussions and resolutions must be drafted and signed by the chairman and secretary of the meeting (in case of S.A. companies) or by the shareholders (in Lda. companies), as applicable, either in paper or in electronic form.