Cash payments/receipts

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Payments made by a corporate income taxpayer (IRC), as well as individual income taxpayers (IRS) who have or are required to have organized accounting, related to invoices or equivalent documents of a value equal to or greater than € 1000, or its equivalent in foreign currency, must be made through a payment method that allows for the identification of the respective recipient, namely bank transfer, named check, or direct debit (LGT article 63-E).

If it is an individual, it is prohibited to pay or receive in cash in transactions of any nature involving amounts equal to or greater than € 3000, or its equivalent in foreign currency. This limit is € 10,000, or its equivalent in foreign currency, whenever the payment is made by individual persons not residing in Portuguese territory and provided that they do not act as entrepreneurs or traders.

Sick leave: how many days are allowed for the death of a family member?

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“Sick leave” is the term used to refer to the days of justified absence that the worker is entitled to for mourning the death of a family member.

The number of bereavement days to which the worker is entitled.

According to the current wording of Article 251 of the Labor Code (in force since May 1, 2023), the number of justified absences varies with the degree of kinship between the worker and the deceased person.

  1. Up to 20 consecutive days for the death of the spouse, not legally separated, or equivalent, children, or stepchildren (1st-degree relatives).
  2. Up to 5 consecutive days for the death of parents, stepparents, in-laws, sons-in-law, and daughters-in-law (other 1st-degree relatives or relatives by marriage).
  3. Up to 20 consecutive days in the event of the death of a person who lives in a de facto union or common economy with the worker.
  4. Up to 2 consecutive days for the death of siblings, brothers-in-law, grandparents, great-grandparents, grandchildren, and great-grandchildren (2nd-degree relatives or relatives by marriage).
  5. Up to 3 consecutive days for gestational mourning.

No caso de primos, tios e sobrinhos a lei não atribui dias de nojo, ou seja, a possibilidade de falta justificada. No entanto, para comparecer ao funeral, com uma declaração comprovativa (da agência funerária, por exemplo) essa falta estará justificada.

Entitlement to psychological support in the event of the death of children and other close family members.

In cases of the death of descendants or first-degree relatives in the direct line, both parents have the right to request psychological support from the attending physician of the National Health Service (SNS). This support should commence within five days after the death.

This right, in effect since January 2022, also applies in cases of the death of close family members, namely spouse and ascendants.

From which day do the bereavement days begin to count?

The counting of bereavement days starts on the day of the death, unless a different time is agreed upon with the employer or established by collective labor regulation.

If the death occurs after the worker has completed their normal daily work period, the counting starts on the following day.

Does the counting of vacation days suspend?

The death of a family member postpones or suspends the enjoyment of vacation days, as it does not depend on the worker’s will and prevents the enjoyment of the right to vacation, which aims at rest and physical recovery. When the bereavement days end, the vacation resumes.

Are justified absences paid?

When the mourning days provided by law are fulfilled, the absences taken by the worker are justified and do not imply loss of remuneration (Article 249, paragraph 2, subparagraph b) and Article 255, paragraph 1 of the Labor Code).

Notification to the employer and justification of the absence

As a rule, absences should be communicated with a 5-day notice. However, in this case, as the event is unforeseeable, the law only requires that the notification of the death of the family member to the employer be made as soon as possible.

Within 15 days following the notification of the absence, the employer may require the worker to provide proof of the invoked fact for justification, i.e., proof of the death of the family member (Article 253, paragraph 2, and Article 254, paragraph 1 of the Labor Code).

That proof could be a statement of attendance at the funeral issued by the funeral agency, which also states the worker’s relationship to the deceased person.

Obrigatory Bank Account

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The taxable entities subject to Corporate Income Tax (IRC), as well as those subject to Individual Income Tax (IRS) who have or are required to have organized accounting, are obliged to possess at least one bank account through which all payments and receipts related to the conducted business activity must be exclusively handled (LGT article 63.º-C).

All movements relating to supplies, other forms of loans and advances from partners, as well as any other movements by or in favor of taxpayers, must also be made through the account or accounts referred to.

Work Compensation Fund and Guarantee

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The Decree-Law No. 115/2023, dated December 15, was published, coming into effect on January 1, 2024, amending the legal frameworks of the work compensation fund and the work compensation guarantee fund.

Due to this decree, it became mandatory only to identify the FGCT (Work Compensation Guarantee Fund) and no longer the FCT (Work Compensation Fund). However, the obligations related to FCT were suspended during the validity of the medium-term agreement for the improvement of income, salaries, and competitiveness. Consequently, the obligation to make monthly payments to the FGCT remains in effect.

The FGCT remains a mechanism designed to ensure workers’ rights to receive half of the compensation amount due upon termination of the employment contract, calculated in accordance with Article 366 of the Labor Code.

With the entry into force of the changes to the mentioned regime, it is expected that the FCT will be converted into an accounting closed fund, consisting of the overall accounts of employers to be used by them for the following purposes:

a) Support the costs and investments related to housing for workers;

b) Support other investments made by mutual agreement between employers and representative structures of workers;

c) Finance the qualification and certified training of workers;

d) Ensure workers’ rights to receive half of the compensation amount due upon termination of the employment contract, calculated in accordance with Article 366 of the Labor Code, in cases where employers have contributed to the FCT.

The balance of the FCT can be utilized by the employer from the last quarter of 2023 until December 31, 2026.

The State Budget for 2024

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Introduction

The article 236 of the State Budget Law for 2024 repealed the non-habitual resident regime.

However, transitional rules were approved that still allow access to the regime for taxpayers who become tax residents in 2024.

Application of the regime for individuals who become residents in 2023 or already hold the status.

The regime will continue to apply to taxpayers who:

  • are registered as non-habitual residents upon the entry into force of the law (January 1, 2024) and until the ten-year period stipulated in the regime expires;
  • as of December 31, 2023, meet the conditions for registration as non-habitual residents, i.e., holders of a valid residence permit as of that date, and must complete their registration by March 31, 2024.

Application of the regime for taxpayers who become tax residents in 2024.

The regime will continue to apply to taxpayers who become tax residents for fiscal purposes until December 31, 2024, and declare, for the purpose of their registration as non-habitual residents, that they have one of the following elements:

  • Promise or employment contract, promise or secondment agreement concluded until December 31, 2023, whose job duties are to be carried out in national territory;
  • Lease agreement or other contract granting the use or possession of real estate in Portuguese territory concluded until October 10, 2023;
  • Reservation contract or promise-to-purchase contract for the acquisition of a real right over property in Portuguese territory concluded until October 10, 2023;
  • Enrollment or registration for dependents in an educational institution domiciled in Portuguese territory, completed until October 10, 2023;
  • Valid residence visa or residence permit until December 31, 2023;
  • Procedure initiated until December 31, 2023, for the issuance of a residence visa or residence permit, with the competent authorities, in accordance with the current immigration legislation, namely through the scheduling request or effective scheduling for the submission of the residence visa or residence permit application, or through the submission of the application for the issuance of the residence visa or residence permit;
  • Or if they are a member of the household of the taxpayers referred to in the previous paragraphs.

Procedures for obtaining the status.

The taxpayer must request registration as a non-habitual resident electronically through the Tax Portal, subsequent to the act of registration as a resident in Portuguese territory, in accordance with the provisions of paragraph 10 of article 16 of the IRS Code, in the version prior to the amendment introduced by this law, with reference to the year in which they became a resident in that territory.

In cases where registration is made outside the deadline, taxation as a non-habitual resident takes effect from the year of registration, for the remaining period, until the end of the period provided for in paragraph 9 of article 16 of the IRS Code, in the version prior to the amendment introduced by the State Budget Law, counted from the year in which the individual became a resident in that territory.

Note that this wording contradicts the understanding that has been followed by the Tax Authority in the evaluation of requests submitted outside the deadline (usually rejected), and changes to this position are expected.

Abílio Sousa

Tax consultant and CEO of IVOJOMA.

Guest professor at Porto Business School.

Update of Per Diem and Compensation for the Use of Own Vehicle (Kilometers)

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The State Budget for 2024 updates the daily rates for Per Diem, as well as the amounts paid per kilometer for the use of a personal vehicle, according to the table below:

Expense Allowance Daily Per Diem Limit Daily Per Diem Limit

Domestic Daily Per Diem Limit		 2023 2024
Public Sector Workers 50,20 € 62,75 €
Administrators, Managers, Government Officials, and Senior Executives 69,19 € 69,19 €

Abroad		    
Public Sector Workers 89,35 € 148,91 €
Administrators, Managers, Government Officials, and Senior Executives 100,24 € 167,07 €

 

Kms Rate per Kilometer Rate per Kilometer
  2023 2024
Reimbursement for Transportation by Own Car 0,36 € 0,40 €
Download PDF

E-Clic is the new Digital Counter to contact Social Security

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The e-Clic is the new digital counter of Social Security where it is possible to clarify doubts, request information, and file complaints with Social Security. The new counter aims to facilitate citizens’ interaction with Social Security and is available 24 hours a day, seven days a week. The digital counter can be accessed from a computer, tablet, or smartphone. To use the e-Clic, one simply needs access to Social Security Direct (SSD). This new channel reinforces the rights of citizens and businesses, ensuring a simpler, faster, dematerialized, and more proximate communication.

For more information, please visit the following website:
https://www.seg-social.pt/noticias/-/asset_publisher/kBZtOMZgstp3/content/e-clic-e-o-novo-balcao-digital-para-contactar-a-seguranca-social

Social Security – Contracting Entities

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Contracting entities are considered to be legal entities and individuals engaged in business activities, regardless of their nature and pursued objectives, who, in the same calendar year, pay more than 50% of the total value of the services provided by an independent worker.

The contributory obligation on the part of contracting entities arises when Social Security officially determines and communicates the value of the services provided to them. The deadline for payment of contributions by contracting entities to Social Security is by the 20th day of the month following the notification, and failure to meet this deadline may result in the imposition of fines, as well as late payment interest, in accordance with legal provisions.

AT – Obligation to Report Inventories to the Tax Authority (AT) by January 31, 2024.

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All taxpayers, whether individuals or entities, with headquarters, a permanent establishment, or tax residence in Portugal, who maintain organized accounting and are required to prepare an inventory, are obligated to report inventories. Entities subject to the simplified tax regime for IRS or IRC in the year to which the inventory refers (2023) are exempt from this obligation. It’s important to note that Non-Profit Sector Entities (ESNL) are also required to report inventory if they meet the aforementioned requirements.

State budget for 2024

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Proposta de lei aprovada. Propõe as seguintes alterações:

  • The reporting of inventories to the Tax Authority (AT) for the tax period beginning on or after January 1, 2023, will continue to be made without a monetary value;
  • The submission of the SAF-T (PT) file related to accounting, as defined by Ordinance No. 31/2019 of January 24 (IES), will only apply to periods in 2025 and beyond, to be submitted in 2026 or subsequent periods;
  • The deadline for accepting PDF invoices as electronic invoices for all purposes provided by tax law is extended until December 31, 2024.