Discussions aside from the real denomination of the revision (legal expression) to the State Budget of 2020 recently published, it is important to mention that it will not be the only one this year.
The measures are palliative and merely cyclical. There is three good news for companies.
First, the period for reporting tax losses by companies is 12 years. This was a measure already applicable to Small and Medium Enterprises, a structure that corresponds to the majority of the Portuguese business fabric, so the impact will be small and exceptional.
In addition, despite the limit of the deduction previously corresponding to 70% of the taxable profit determined in each tax period, it is increased to 80% (increase in ten percentage points, in the wording of the law), this is a measure that is only applicable to losses produced in 2020 and 2021.
The second good news is payment on account, to which a more generous rule now applies to micro, small and medium-sized enterprises (SMEs). With the Supplementary Budget, the payment of this tax is automatically suspended, regardless of the break in billing. It is an expressive measure, but it comes late, since companies have already done their tax planning at the beginning of the year. We think it should have been announced earlier.
The third good news is the creation of the Extraordinary Tax Credit for Investment (CFEI II), which provides for the deduction from the IRC collection of 20% of the investment expenses in assets related to exploration, up to the investment limit of 5 million euros, carried out between 1 July 2020 and 30 June 2021 and applicable to the years 2020 or 2021. This is, however, a measure that will support companies that have income and not those that have been affected by the crisis, so it is necessary find other more effective fiscal means.
As with everything, we are talking about purely cyclical measures, which have budgetary compensation measures behind them. If, on the one hand, companies based offshore will be prevented from receiving the support launched in response to the impact of the coronavirus pandemic, on the other hand, an extraordinary contribution is created on banking, the revenue of which will be consigned to the Financial Stabilization Fund of Social Security.
But there are flaws. See, for example, the need to increase IRS deductions in health and education expenses (here aggravated by the compulsory telescope) and even the urgency of measures in the agricultural sector due to the lack of outflow associated with transport needs by the country. decreed confinement.
The question is: is this the only budgetary supplement for 2020? From a fiscal point of view, we can safely say that it is not. In reality, there is a lack of an express measure in IRS or IRC that contemplates the extraordinary costs borne not only for two years, but that considers the crisis experienced and the income irremediably lost. Let us wait for the end of the year.