VAT Deferral – 1st Semester of 2021

VAT Deferral – 1st Semester of 2021 

(Decree-Law 10-F/2020, of march 26, as amended by DL 99/2020

of november 22 and DL 103-A/2020, of december 15)

The Government published last December 15 the Decree-Law 103-A/2020 extending the previously published tax payment flexibility plan, which allows companies to defer in time the tax obligations (VAT) of the 4th quarter of 2020, the 1st quarter of 2021 and the months of December 2020 and January to April 2021. 

Quarterly regime for delivery of VAT PD – 4th quarter 2020

1 – Taxpayers covered

All taxable persons covered by the quarterly regime for filing the periodic declaration.

2 – Payment Deadline

– Up to February 25, 2021;

– Or in three or six monthly installments, of an amount equal to or greater than €25, without interest.

If the installment plans are chosen, the total amount of VAT to be paid must be at least €75 or €150, depending on whether the installment plan is chosen in 3 or 6 installments

3 – Alternative – payment in installments

The monthly installments related to the installment plans referred to are due as follows:

– The first installment on the date of fulfillment of the payment obligation in question (February 25);

– The remaining monthly installments on the same date of the subsequent months (25th of each month or on the following business day). 

Quarterly regime for delivery of VAT PD – 1st quarter of 2021

1 – Taxpayers covered

All taxable persons covered by the quarterly regime for filing the periodic declaration.

2 – Payment Deadline

– Up to May 25, 2021;

– Or in three or six monthly installments, of an amount equal to or greater than €25, without interest.

If the installment plans are chosen, the total amount of VAT to be paid must be at least €75 or €150, depending on whether the installment plan is chosen in 3 or 6 installments

3 – Alternative – payment in installments

The monthly installments related to the installment plans referred to are due as follows:

– The first installment on the date of fulfillment of the payment obligation in question (May 25);

– The remaining monthly installments on the same date of the subsequent months (25th of each month or on the following business day). 

Monthly regime for delivery of VAT PD – December 2020

1 – Taxpayers covered

Taxpayers included in the monthly regime who have obtained a turnover of up to €2,000,000 in 2019, or who have started or restarted their activity as of January 1, 2020, inclusive, are eligible for the VAT payment flexibility for the month of November 2020.

These taxpayers must also declare and demonstrate a decrease in the invoicing reported through the E-fatura (or turnover) of at least 25% in the monthly average of the full calendar year of 2020 in relation to the same period of the previous year. 

2 – Payment deadline

– Until February 25, 2021;

– Or in three or six monthly installments, equal to or greater than €25, without interest.

If the installment plans are chosen, the total amount of VAT to be paid must be at least €75 or €150, depending on whether the installment plan is chosen in 3 or 6 installments

3 – Alternative – payment in installments

The monthly installments related to the installment plans referred to are due as follows:

– The first installment on the date of execution of the payment obligation in question (February 25); 

– The remaining monthly installments on the same date of the subsequent months (25th of each month or on the following business day).

Monthly regime for delivery of DP IVA – January 2021 to April 2021 pay in March

2021 to June 2021

1 – Taxpayers covered

Taxpayers under the monthly regime who have obtained a turnover of up to €2,000,000 in 2019, or who have started or restarted their activity as of January 1st, 2020, inclusive, are eligible for the VAT payment flexibility for November 2020.

These taxpayers must also cumulatively declare and demonstrate a decrease in the invoicing reported through the E-fatura (or turnover) of at least 25% in the monthly average of the full calendar year of 2020 in relation to the same period of the previous year. 

2 – Payment deadline

– Until March 25 (to June 25) of 2021;

– Or in three or six monthly installments, equal to or greater than €25, without interest.

If you want to join the installment plans, the total amount of VAT to be paid must be at least €75 or €150, depending on whether you choose to split it into 3 or 6 installments.

3 – Alternative – payment in installments

The monthly installments related to the installment plans referred to are due as follows:

– The first installment on the date of the payment obligation in question (March 25 / April 25 to June 25);

– The remaining monthly installments on the same date of the subsequent months (25th of each month or on the following business day).

Exceptional support to the family – Closed schools 2021

Exceptional support to the family – Closed schools 2021

In order to reverse the accelerated growth of the pandemic, the Government has decreed the suspension of teaching and non-teaching activities for 15 days.

To allow the necessary support to the children, the Government once again defines as justified the absences from work motivated by unavoidable assistance to a child or other dependent under 12 years of age, or, regardless of age, with disability or chronic illness, resulting from the suspension of teaching activities.

Together, following the suspension of teaching and non-teaching activities presential, the Government decides to recover the measures to support the family and the care of children raised through Decree-Law no. 10-A/2020, of March 13, allowing, in the same way as in the previous regime, access to exceptional family support for the care and assistance of minor children outside the periods of teaching interruption, which does not cover the fixed period of teaching vacation.

Who does it apply to?

This support covers employees, the self-employed and domestic service workers, but does not cover situations in which teleworking is possible.

What the support consists of

Dependent workers

Parents who have to be out of work to provide unavoidable care to their child or dependant are entitled to receive support corresponding to 2/3 of their declared basic pay in December 2020, with a minimum limit of EUR 665.00 and a maximum limit of EUR 1995.00. Half will be paid by the employer and the other half supported by social security.

The employer benefits from the partial exemption of 50% of the contributions at his charge (the contributions are due) and must be the object of an autonomous declaration.

Self-employed workers

Support in the amount of 1/3 of the contribution base declared in the 4th quarter of 2020.

This support has a minimum of 1 SSI and a maximum of 2 SSI and will be subject to a quarterly declaration and the respective contribution.

The support is not due if the activity of the self-employed worker can be provided by telework.

Accumulation

This support cannot be aggregated with other exceptional or extraordinary support created in response to the COVID -19 pandemic.

More information can be found at the following link:

154947005 (dre.pt)

Extraordinary Support to the Reduction of Economic Activity MOE (Managing Partners) 2021

Extraordinary Support to the Reduction of Economic Activity MOE (Managing Partners) 2021

Who does it apply to?

This support is intended for members of corporate bodies subject to the suspension of activities or closure of production units and establishments by legislative or administrative determination of a government source, in the state of emergency.

It has access to support to managers and members of statutory bodies of micro and small companies, with management functions, which have or not participation in the company’s capital, as well as to members of statutory bodies of foundations, associations or cooperatives with functions equivalent to of those, which are, in that capacity, exclusively in the regime of members of statutory bodies, even if in more than one entity, and are not pensioners.

What is the support

You are entitled to a corresponding financial support:

  • To the value of the remuneration recorded as contribution base, in situations where the value of the remuneration recorded as contribution base is less than 1.5 SSI;
  • 2/3 of the amount of the remuneration recorded as a contributory base, in situations where the amount of the remuneration recorded is greater than or equal to 1.5 SSI.

With a maximum limit equal to three times the RMMG (1,995€) and with the minimum limit corresponding to 50% of the Social Support Index (SSI) (219.41€).

The support is calculated with reference to the base remuneration declared in March 2020, for the month of February 2020. If there is no basic remuneration declared in that month, the value is used in the index of social support.

In the case of an abrupt and sharp fall of at least 40% in invoicing, the value of the financial support is multiplied by the respective drop in invoicing, expressed in percentage terms.

How do I prove the total stop of the activity or the activity of the respective sector?

By his own declaration, under the commitment of honor and certification of the certified accountant. 

How do I prove the abrupt and sharp drop of at least 40% in invoicing?

By a declaration of my own, under pledge of honor, and by a certified accountant.

The break is subject to subsequent verification by the social security, within one year from the granting of support, based on information requested from the Tax and Customs Authority, giving rise to the possible refund of amounts unduly received.

The dropping invoicing in the period of 30 days prior to the request is compared with:

  1. The monthly average of the two months prior to the request 
  2. The same period of the previous year 
  3. The average of the whole period in activity for those who have started less than 12 months ago.

What is the duration of the support?

The support is granted for one month, being paid in the month of the support application.

When can I apply for this financial support?

The support for the month of January must be requested from February 1st to 10th.

Do I still have the right to benefit from other supports?

The Extraordinary Support for the reduction of economic activity cannot be accumulated with other supports, namely:

  • Subsidy for Prophylactic Isolation Sickness;
  • Illness, Parenthood or Unemployment Subsidy;
  • Child and Grandchild Care Subsidies;
  • Simplified Layoff (Extraordinary Measure to Support the Maintenance of Employment Contracts);
  • Resumption Support (Extraordinary Support for Progressive Resumption of Activity).

More information can be found in the following links:

Apoio Extraordinário à redução de Atividade económica Membro de Órgão Estatutário (Sócios Gerentes) – seg-social.pt (seg-social.pt)

Extraordinary support for the reduction of economic activity of self-employed 2021

Extraordinary support for the reduction of economic activity of self-employed 2021

Who does it apply to?

It is intended for self-employed workers, including sole proprietors, subject to the suspension of activities or closure of facilities and establishments by legislative or administrative determination from a government source, in the state of emergency.

Employees covered exclusively by the self-employed scheme are covered, or who are also covered by the employee’s regime, and their spouses who are subject to the duty of closure.

Workers who earn no more than the social support index (SSI), who are not pensioners, and who have been subject to compliance with the contributory obligation for at least 3 months, followed by 6 interpolated, for at least 12 months, may access the support.

What the support consists of

Independent workers

 You are entitled to a corresponding support:

  • To the value of the average remuneration recorded as contribution base in the period of 12 months prior to the date of submission of the application, with the maximum limit of 1 SSI (438.81€), when the value of the remuneration recorded as contribution base is less than 1.5 SSI (658.22€).
  • 2/3 of the average value of the remuneration recorded as the tax base in the 12 months period prior to the date of submission of the application, with a maximum limit equal to the RMMG (665€), when the value of the remuneration recorded as the tax base is equal to or greater than 1.5 SSI (658.22€).

If the invoicing break is higher than 40% and less than 100%, the value of the financial support to be received corresponds to the value determined above multiplied by the respective invoicing break, expressed in percentage terms, with the maximum limits indicated.

The support foreseen has as minimum limit the value corresponding to 50% of the SSI value (219.41€).

Individual proprietor ships covered exclusively by the self-employed worker`s regime:

You are entitled to a corresponding support:

With a maximum limit equal to three times the value of RMMG (1,995€) and a minimum limit corresponding to 50% of the value of SSI (219.41€).

The support is calculated with reference to the base remuneration declared in march 2020, for the month of february 2020. If there is no basic remuneration declared in that month, the amount used is the SSI.

Exemption from payment of contributions

Contributions will always be due, even when you are receiving this financial support. However, you can ask for their deferment after the support ceases.

Accumulation with other supports and social security benefits?

The extraordinary support for the reduction of economic activity cannot be accumulated with other supports.

What is the duration of the support?

The support is granted for one month, being paid in the month of the support application.

How do I prove the total stop of the activity or the activity of the respective sector?

By a declaration of the self, under commitment of honor, or, in the case of self-employed workers in the organized accounting system, by a certified accountant.

How do I prove the abrupt and sharp drop of at least 40% in invoicing?

By a declaration of the self-employed person together with a certified accountant’s certificate. The break is subject to subsequent verification by the social security, within one year from the granting of support, based on information requested from the tax and customs authority, giving rise to the possible refund of amounts unduly received.

The breakage of the invoice in the period of 30 days prior to the request is compared with:

When can I request this financial support?

The support for the month of january must be requested from february 1st to 10th.

More information can be found in the following links:

Apoio Extraordinário à redução da atividade económica de trabalhador independente – seg-social.pt (seg-social.pt)

Support to Social Unprotected 2021

Support to Social Unprotected 2021

Who does it apply to?

It is intended for self-employed workers who are subject to the suspension of activities or closure of facilities and establishments by legislative or administrative determination from a government source, in a state of emergency and who, not being compulsorily covered by a national or foreign social security system, declare the beginning or restart of independent activity with the tax administration. 

The attribution of the benefit requires the worker to declare the beginning or restart of independent activity with the tax administration, the effects of the corresponding framing in the social security system of independent workers and the maintenance of the exercise of activity for a minimum period of 24 months after the cessation of payment of the benefit.

What the support consists of

You are the right to a support corresponding to 50% of the Social Support Index (SSI) (219.41€), if the value of the household income is lower than the Social Insertion Income (SSI) benefit that would be granted, according to article 10 of Law 13/2003 in its current wording.

Exemption from payment of contributions

The granting of support determines, from the month following the end of the support, the end of the exemption from the scheme. With the effects of the inclusion in the regime of self-employed workers begins the obligation to make the quarterly declaration, when subject to this obligation, and the respective contribution obligation.

What is the duration of the support

The support is granted for one month, being paid in the month of the support application.

When can I apply for this financial support?

The support for the month of January must be requested from February 1st to 10th.

More information can be found in the following links:

Apoio à Desproteção Social – seg-social.pt (seg-social.pt)

Extraordinary measure to encourage professional activity 2021

Extraordinary measure to encourage professional activity 2021

Who does it apply to?

It is intended for self-employed worker`s, including sole proprietors, subject to the suspension of activities or closure of facilities and establishments by legislative or administrative determination from a government source, in the state of emergency.

It is intended for workers who are covered exclusively by the self-employed worker´s regime, or who are also covered by the employee’s regime, and their spouses who are subject to the duty of closure.

This support covers self-employed workers who, in march 2020, were exclusively covered by the self-employed workers’ regime, or who were also covered by the employee’s regime and did not earn, in that regime, more than the amount of the social support index (SSI) (438.81€), and their spouses and who are not pensioners:

  • Have been in business for more than 12 months, without their contribution obligation for at least 3 consecutive months or six months interpolated for at least 12 months; 
  • Have been in business for less than 12 months; 
  • Are exempt from the payment of contributions (when there is no income or the amount of contributions due by virtue of the relevant income in 2019 is less than € 20.00).

What the support consists 

The value of the support is calculated based on:

  • 70% of the average turnover reported for tax purposes between march 1, 2019 and february 29, 2020 associated with the provision of services + 20% of the average turnover reported for tax purposes between march 1, 2019 and february 29, 2020 associated with the sale of goods or provision of services in the hotel and similar activities, catering and beverages;

The amount of financial support to be received corresponds to the amount determined above multiplied by the respective invoicing breakdown, expressed in percentage terms.

It has as maximum limit 50% of the SSI value (219.41€) and minimum corresponding to the lowest base value of minimum contribution incidence (20€/21.40%=93.45€).

The support is granted for one month, being paid in the month of the support application.

Application for the month of january support

Example 1:

Average billing for services rendered in 2019: 5,000€

Billing breakage: 50%

Maximum limit = 50% SSI (219.41)

Minimum limit= 93.45€ (20€/21.40%)

Relevant income= 5,000×70% = 3,500€

Value of the support = 3,500€ x 50% = 1,750€.

As it is higher than the maximum limit, the value of the support to be paid is 219.41€.

Example 2:

Average sales invoice in 2019: 700€.

Invoicing breakage: 50%

Maximum limit = 50% SSI (219.41)

Minimum limit = 93.45€ (€20/21.40%)

Relevant income = 700×20% = 140€

Value of the support = 140€ x 50% = 70€.

As it is lower than the minimum limit, the value of the support to be paid will be 93.45€.

Exemption from payment of contributions

The granting of support determines, from the month following the end of the support, the end of the exemption from the scheme. With the effects of the inclusion in the regime of self-employed workers begins the obligation to make the quarterly declaration, when subject to this obligation, and the respective contribution obligation.

How do I prove the total cessation of the activity or activity of the respective sector?

By a declaration of the self, under commitment of honor, or, in the case of self-employed workers in the organized accounting regime, by a certified accountant.

How do I prove the abrupt and sharp drop of at least 40% in invoicing?

By a declaration of the self-employed person together with a certified accountant’s certificate. The breakdown of invoicing in the period of 30 days prior to the request is compared with:

  • The monthly average of the two months preceding the request 
  • The same period of the previous year 
  • The average of the whole period in activity for those who have started less than 12 months ago.

The break is subject to subsequent verification by the social security, within one year from the granting of the support, based on information requested from the tax and customs authority, giving rise to the possible refund of amounts unduly received.

What is the duration of the support

The support is granted for one month, being paid in the month of the support application.

When can i apply for this financial support?

The support for the month of january must be requested from february 1st to 10th.

Am I eligible for other support?

No. During the period in which you receive the extraordinary incentive support for professional activity you are not entitled to receive other supports:

  • Prophylactic isolation sickness subsidy;
  • Illness, parenthood or unemployment subsidy;
  • Child and grandchild care subsidies;
  • Extraordinary support for the reduction of worker’s economic activity;
  • Simplified lay-off (extraordinary measure to support the maintenance of labor contracts)
  • Extraordinary support to the progressive resumption of activity.

More information can be found in the following links:

Medida Extraordinária de Incentivo à Atividade Profissional – seg-social.pt (seg-social.pt)

Extraordinary Support to Progressive Resumption of Activity -2021

Extraordinary support to progressive resumption of activity

(Extension 1st half of 2021)

What is the mechanism to support the gradual recovery?

It is intended to employers who have been affected by the COVID -19 disease pandemic and who are consequently in a business crisis situation, with a turnover drop of 25% or more.

The employer can access the extraordinary support for the progressive resumption of activity with temporary reduction of the normal work period of all or some of their workers.

As of january 2021, it also covers members of statutory bodies who perform management functions, which are listed on remuneration statements, and provided that the employer has at least one employee in service.

How is the breakdown of invoicing evaluated?

The break in invoicing is evaluated by comparing the invoicing in the full calendar month immediately preceding the calendar month to which the initial request for support or extension refers:

  • the homologous month of the previous year; 
  • the same month in the year 2019; 
  • the monthly average of the six months preceding that month.

For those who have started the activity less than 24 months ago, the break in invoicing is measured against the average monthly invoicing recorded in the E-Fatura between the start of activity and the last but one complete month prior to the calendar month to which the initial request for support or extension refers.

Example 1: if the request is delivered in february 2021, for the month of january 2021, the invoicing between the 1st and the 31st of december 2020, compares with the invoicing of

  • December 1 to 31, 2019 (the same month as the previous year); 
  • June 1 to november 30, 2020 (average of the six months prior to this period).

Example 2 (companies in active for less than 24 months): if the application is submitted in february 2021 for the month of january 2021 and the company has been active for less than 24 months, for example since 1 march 2020, the invoice must be compared between 1 march 2020 and the last but one complete month preceding the calendar month to which the initial application for support refers march 1, 2020 to november 30.

To which companies does it apply?

Employers in a situation of business crisis who have the situation regularized before the social security and the tax authority, to which private law applies – commercial companies, regardless of the corporate form, cooperatives, foundations, associations, federations and confederations – including those with the status of private institution of social solidarity, self-employed workers who are employers and statutory members.

Who can not access?

  1. Entities connected to offshore:
  2. Self-employed workers, in that capacity;
  3. Statutory members of companies in that capacity who are not employees.

What are the consequences for workers?

The maximum reduction of the normal working period is variable according to the breakdown of invoicing, with the following limits:

In the case of an employer with a break in invoicing of 75% or more, the reduction of the normal working period, per worker, can be a maximum:

  • up to 100% in the months of january, february, march and april 2021
  • of 75%, in the months of may and june 2021

The management of the reduction of the normal work period can be articulated between the employee and employer, taking into account the following rules:

✓ the application of the normal working period reduction, per employer, is always determined for a full calendar month (duration of support), regardless of the possibility of monthly extension, and measured in average terms, per worker, at the end of each month;

✓ The employer must determine the employee’s working hours and draw up a new work schedule in accordance with the percentage of reduction previously reported

✓ The duration of the normal working period during the month, within the maximum reduction limits allowed by the support, does not have to be fixed, for example, the employer may choose to concentrate the reduction on certain days of inactivity or privilege that the reduction is made with reference to the normal daily and weekly working period, that is, applying an equal reduction period on each working day or on each week;

✓ the maximum limits of the normal daily and weekly work period legally established may never be exceeded, and the worker may not work more than 8 hours a day and 40 hours a week, or the limits established in the applicable collective labor regulation instrument;

✓ Regardless of how the reduction of the normal working period is managed, at the end of the month, on average, the worker may not have provided more work than that declared when submitting the application for support, under penalty of non-compliance.

What is the remuneration due to the workers covered?

During the reduction of the normal working period, the worker is entitled:

  • to the remuneration corresponding to the hours worked 
  • to a compensation for hours not worked with the maximum limit corresponding to three times the value of RMMG (1,995€).

The total monthly amount actually earned by the employee (compensation for hours worked + compensation for wages) may not be less than the employee’s normal. If this happens, the amount of compensation paid by social security is increased to the extent strictly necessary in order to ensure that compensation, up to a maximum of three times the gross normal salary of RMMG, without additional charges to employers.

What support is given to companies?

During the reduction of the normal working period the employer is entitled to financial support, under which the social security contributes 70% of the amount of compensation to which employees with reduced normal working period are entitled for hours not worked, the employer being responsible for ensuring the remaining 30%.

In situations where the normal working period reduction is greater than 60%, the social security contributes 100% of the amount of compensation to which workers with reduced the normal working period are entitled for hours not worked.

For companies in a situation of corporate crisis with a drop in turnover of 75% or more, the employer is entitled to additional support in which the social security will contribute 35% of the normal gross pay for hours worked due to each worker with a reduction of the normal working period.

The sum of the financial support to the compensation and this additional support cannot exceed three times the RMMG (1,995€).

Are the companies covered exempt from social security contributions?

These amounts are considered as labor income and are subject to withholding tax, according to the income tax tables in force.

However, and during the application of the measure, micro, small and medium-sized companies are entitled to partial exemption (50%) of the payment of social security contributions payable by the employer on the amount of the compensation payment in relation to the amount provided for in no. 2 of art. 6 of decree-law no. 46-a/2020.

The payment of workers contributions is maintained in full.

What is meant by normal gross remuneration?

The calculation of compensation is made in proportion to hours not worked and considers, as gross normal pay, all the regular remuneration components normally declared to social security and usually paid to the employee, relating to:

A) Basic remuneration (code “P”);

B) Monthly premiums (code “B”);

(c) Regular monthly allowances, including shift work (code “M”);

(d) Meal allowance, where this is part of the concept of remuneration (code “R”);

E) Night work (code “T”).

Rules for calculating compensation:

  1. The compensation corresponds to 4/5 of the monthly value corresponding to the hours not worked
  2. If the value resulting from the previous calculation is greater than 3 x RMMG, then the compensation will be equal to 3 x RMMG (maximum limit); if the value resulting from the previous calculation is less than the employee’s gross normal salary, then the value of the compensation paid by social security is increased to the extent strictly necessary to ensure that salary, with the maximum limit equal to 3 x RMMG (minimum limit);
  3. The total amount owed to the worker corresponds to the sum of the retributive compensation and the retribution corresponding to the hours worked;
  4. The remuneration compensation calculated on the basis of the 4/5 of the salary of the gross normal salary is shared 70% by the social security and 30% by the employer, with the social security covering the remainder of the remuneration up to the value of the gross normal salary of the worker with the limit of 3 x RMMG.
  5. In situations where there is a 75% or more drop in invoicing, social security provides additional support corresponding to 35% of the remuneration corresponding to the working hours provided, and the sum of this support with the contribution of the remuneration compensation may not exceed 3 x RMMG.

Aggregation of support

The employer cannot benefit simultaneously from this support and from the support provided for in decree-law no. 10-G/2020 of 26 march (simplified layoff).

Under this mechanism is it possible to suspend the employment contract?

This support can only be granted with a reduction of the normal working period, and the employer cannot temporarily suspend the contracts.

Until when does the support mechanism for progressive recovery apply?

This support, with temporary reduction of the normal working period, lasts for one calendar month and can be extended until june 30, 2021.

The interruption of the temporary reduction of the normal working period is possible and it is important to suspend the support.

 it is made through changes to the request, through the functionality available in the direct social security, which allows to remove workers from the request and add again with the respective correction of the normal working period reduction.

The suspension of the support does not affect the possibility of extension of the support, since it can be requested in interpolated months.

Until when should the application be submitted?

The application can be submitted until the end of the month following the one to which the initial request for support or extension refers.

For example, the employer may submit the application by the end of february 2021 with reference to the month of january 2021.

Note: the employer that starts the application of the normal working period reduction before the social security decision on the application, takes the effects of the eventual rejection of the application.

To what duties are the employer that is the beneficiary of the support subject?

A) to maintain, demonstrably, the social security and ta regularized tax situations;

B) Make the payment of the compensation, as well as the increase that derives from the professional training scholarship;

C) Pay social security contributions and contributions on the wages received by workers;

D) Not to increase the retribution or other patrimonial benefit attributed to members of social bodies, while the social security co-participates in the retributive compensation attributed to workers;

E) Prohibition to terminate work contracts under the modalities of collective dismissal, dismissal for termination of the job, or dismissal for maladjustment, nor to initiate the respective procedures, during the reduction period, as well as in the following 60 days;

F) Prohibition of distributing dividends, in any form, namely by way of withdrawal on account, during the reduction period, as well as in the 60 following days;

G) It may not make false statements when granting the support;

H) May not require the provision of work to a worker covered by the normal working period reduction beyond the number of hours declared in the application.

Sources:

Apoio à retoma (apoio extraordinário à retoma progressiva de atividade) – seg-social.pt (seg-social.pt)

Simplified Layoff 2021

Simplified Layoff 2021

(Extraordinary measure to support the maintenance of labor contracts)

Given the evolution of the epidemiological situation in Portugal, in the context of the Covid -19 pandemic, the government decided to adopt a more restrictive set of measures, having also adapted the support mechanisms for workers and companies according to the economic and social effects emerging from the worsening situation.

Who does it apply to?

It is intended at employers, who are subject to the duty of closing facilities and establishments by legislative or administrative determination of a governmental source, in the context of the Covid-19 pandemic.

Employers may access support as long as their activity is totally or partially subject to the duty of closure, being covered the workers affected by this duty of closure.

Note: lay-off can be activated by total suspension of employment or by reducing the number of working hours.

What is the support?

The employer has the right to a financial support for each worker, granted to the company and destined exclusively for the payment of the remuneration.

The employee has the right to a support corresponding to 100% of his gross normal remuneration, or the value of RMMG (665€) corresponding to his normal working period, with the limit of 3 RMMG (1,995€).

The compensation corresponding to 2/3 of your gross normal remuneration, or the value of RMMG corresponding to your normal period of work, not exceeding 3 RMMG. The social security supports 70% of this amount and the employer the other 30%.

The compensation is also increased to the absolutely necessary to ensure the employee’s gross normal remuneration up to a maximum of 3RMMG, with the Social Security supporting this amount.

Example 1: if an employee in a normal situation receives a gross salary of 1.200€, he has the right to receive 1.200,00€. The employer supports 30% of 2/3 of that amount (240€) and the social security supports 70% of 2/3 of 1.200€ and the remainder until they complete 1.200€ (560,00€+400.00€).

Example 2: an employee with a monthly remuneration of 1,200€ and a 50% reduction of the normal working period has the right to receive 600€ of remuneration for working hours.

He has also the right to receive a compensation payment of 600€. The employer supports 60€, which corresponds to 30% of 200€ (2/3 of 1,200€ less the 600€ of the period worked) which together with the remuneration of 600€ for the working hours makes up 2/3 of the gross normal remuneration, and the social security supports 140€, which corresponds to 70% of 200€, more 400€ of additional compensation.

In other words, the employer supports 600€ for the hours worked and 60€ of compensation and the social security supports 540€ euros of compensation.

Exemption from payment of contributions associated with layoff

This measure provides for temporary exemption from the payment of social security contributions by the employer.

In this context, employers are entitled to exemption from the payment of social security contributions in respect of workers covered by the provisions of decree-law 10-G/2020 and members of statutory bodies, for the duration of the support.

The exemption refers to the employer’s contributions in respect of the total remuneration paid to the workers covered by the extraordinary support for the maintenance of the employment contract, maintaining the contribution of 11% for the worker and the member of the statutory body.

Independent workers who are employers, and their spouses, are also entitled to the temporary exemption of social security contributions, maintaining the obligation to submit the quarterly declaration, when subject to this obligation.

Accumulation with other supports and social security benefits?

If you have already submitted the request for extraordinary support for the resumption for the month of January, and you want to submit the request for a simplified layoff still for january, you must register a withdrawal of the extraordinary support for the resumption from the day you want to join the simplified layoff. For example, entities that want to join the simplified set-up as of january 15 must register a withdrawal from the extraordinary takeover support as of january 15.

It cannot be accumulated with the extraordinary support for the take-back, with the support for the reduction of activity and with benefits from the social security system (sickness, parenting and unemployment).

What is the duration of the support?

This support has an initial duration of up to one month, and can be extended monthly, as long as the duty of closure is maintained.

The extension of the extraordinary support is requested monthly in its own model, delivered through the direct social security, and accompanied by the respective annex with identification of the workers covered by the extension. The instructions for the extension will be available on the social security website.

The extension request must only be delivered after the initial request is granted.

What is not allowed to the employer while receiving financial support?

A) Dismissal, except for a fact imputable to the worker;

B) Non-compliance with the retributive obligations due to the workers in a timely manner;

C) Non-compliance with their legal, fiscal or contributory obligations;

D) Distribution of benefits to the partners and shareholders, during the validity of the obligations arising from the granting of the incentive, in any form, namely as a withdrawal on account;

E) Failure, imputable to the employer, to fulfill the obligations assumed, within the established deadlines;

F) Making false declarations;

G) Provision of work to the employer itself by each worker covered by the extraordinary support measure for the maintenance of an employment contract in the form of contract suspension, or beyond the established time, in the form of temporary reduction of the normal work period.

More information in the following links:

Layoff Simplificado (Medida Extraordinária de Apoio à Manutenção dos Contratos de Trabalho) – seg-social.pt (seg-social.pt)

Simplified Support for Micro Companies to Maintain Jobs – 2021

Simplified support for micro companies to maintain jobs – 2021

(Article 14-A of Decree-Law No. 6-C/2021)

Who can apply?

The employer with a breakdown of 25% or more in invoicing:

  • A micro-company, under the terms of the Labor Code (it employs up to 9 workers);
  • That has benefited from the simplified lay-off regime;
  • Or that benefits from the support for the progressive resumption of the activity.

How is the breakdown of invoicing measured?

The break in invoicing is measured by comparing the invoicing in the full calendar month immediately preceding the calendar month to which the initial request for support or extension refers and:

  • the homologous month of the previous year; 
  • the same month in the year 2019; 
  • the monthly average of the six months preceding that month.

For those who have started the activity less than 24 months ago, the break in invoicing is measured against the average monthly invoicing recorded in the E-fatura between the start of activity and the penultimate complete month prior to the calendar month to which the initial request for support or extension refers.

What does this support consist of?

  • You are entitled to financial support to maintain the jobs;
  • In the amount of 2 SMN (1,330.00€) for each worker covered by those supports;
  • Which will be paid by the IEFP in a phased manner, over six months, in one installment for each quarter;
  • Upon request.

Obligations of the employer to benefit from this financial support

  • Comply with the legal rules regarding the employment contract;
  • To have their tax status regularized before the AT and the Social Security;
  • During the period of the support and in the following 60 days:

– Not terminating employment contracts due to collective dismissal, termination of employment or unsuitability.

  • Maintain the existing employment level in the month of application;
  • To verify the level of employment, the following cases are not relevant:

-Expiry of contracts (Article 343 of the Labor Code);

-Denunciation by the worker;

-Dismissal with just cause promoted by the employer.

Aggregation of support

This support cannot be cumulated with the support for the progressive resumption of activity.

The employer may not accumulate this support with the simplified lay-off, or with the reduction or suspension measures provided for in articles 298 and following of the Labor Code.

Sources:

Decreto-Lei 6-C/2021, 2021-01-15 – DRE

Legislative News – 14 April 2020

In the last few days there have been a high rate of publication of laws to regulate the support provided for individuals and companies. At this rate the laws have been announced firsthand by the government through the media. Usually from the time they are announced until they are published and take effect, it takes an average of 2 days. 

Only after this official publication do the services issue clarifications on how to operationalize the law while adapting the platforms to receive the requirements / forms. With all this it is a week of anxiety for those who are waiting for the benefit and a lot of work on the part of the accountants in the interpretation of the laws, circulars, orders etc..

In this way, we present you with the latest legislative news on extraordinary support for reducing the economic activity of the self-employed:

– Improvement of support in financial terms with the definition of 2 income steps whose separation value is 658.22€;

– Expansion of reasons for stopping or reducing activity by more than 40%;

– Inclusion of managing partners without employees and with a turnover in the previous year below 60,000€.

– Indexing of the base value of the support to the break in billing.

As the recovery of the economy can be long and take more than a year to return to pre-crisis time, there is the possibility of resorting to bank financing within the scope of Covid19 that most banks have available to companies

The crisis will be as much harder as it is longer. It is necessary to reflect how will the recovery to the correct taking of decisions. It is also clear that the government will take further support measures if the crisis continues. However, it is necessary to decide well, and now.

Extraordinary Financial Support to the Decline in Economic Activity of Self-Employed

Who Can Access:

  • Workers covered exclusively by the self-employed regime
  • partner-managers of companies, as well as members of statutory bodies of foundations, associations or cooperatives with functions equivalent to those.

Access Conditions:

  • Not being pensioners.
  • Subject to compliance with the contributory obligation for at least 3 consecutive months or 6 months interpolated has, for at least 12 months.
  • Not having workers on the board.
  • The companies of the partner-managers have been billed through “e-fatura” less than € 60,000 in the previous year.

Access Reasons:

  • In a proven situation of complete stoppage of your activity or the activity of the respective sector,
  • In a situation of abrupt and sharp breakdown of at least 40% of the billing in the period of the previous thirty days, with reference to one of the following situations as appropriate:

                 – the monthly average of the two months preceding that period or,

                 – Compared to the same period of the previous year or,

                 – For those who started the activity less than 12 months ago, the average of that period.

Financial Support:

This support is granted according to the contributory base on which social security was charged and whose value can be classified in the following categories:

  a) If the amount registered as the Contribution Tax Base (BIC) is below 658.22 then the amount receivable will be equal to that BIC up to a maximum of € 438.81.

  b) If the amount registered as a contributory tax base (BIC) is equal to or above 658.22 then the amount receivable will be equal to two thirds of that BIC, with the maximum limit of € 635.

In the reason for the break in billing, the amount determined is multiplied by the percentage of the break in billing. In other words, the amount of support varies according to the break in billing, with the minimum / maximum limit (438.81X40% = 175.52) and (635.00X40% = 254.00), respectively. Only with 100% breaks it receives all the support.

Support Duration:

Financial support lasts for one month, extendable monthly, up to a maximum of six months.

Support Payment Term:

Financial support is paid from the month following the submission of the application.

Constraints:

  • The self-employed worker maintains the obligation of the quarterly declaration when subjected to this obligation.
  • The support provided cannot be combined with social protection support for illness and family assistance.
  • Does not confer the right to exemption from the payment of Social Security contributions.
  • However, they are entitled to defer payment of contributions due in the months in which financial support is being paid. The payment of the accumulated value of these contributions must be made from the second month after the end of the support and can be made within a maximum period of 12 months, in monthly and equal installments.
  • The breach of the declared billing is subject to subsequent verification by the social security, within one year from the granting of the support, based on information requested from the “Autoridade Tributária e Aduaneira”, giving rise to the eventual refund of the amounts unduly received.

Comment:

The indexation of the break in billing to the amount of support is the 5th and most recent amendment to the law that regulates this support for self-employed workers. Without discussing the justice of this change, it is certain that there will be a cut for those who are not completely stopped / closed.

On the other hand, it is important to ask for support. In other words, it should be requested when the break in the billing stabilizes, otherwise it will continue to accentuate in the rush of asking when the 40% falls. For example, the activity has been registering losses day by day exceeding 40% and reaching 60% in 15 days. The decision to wait can result in more support to receive, in this example 20% more (from 40% to 60%).

Business support lines – covid19 financing

https://financiamento.iapmei.pt/inicio/home/pesquisa?texto=Covid

https://www.millenniumbcp.pt/apoio_as_empresas/Linhas_Credito_Estado

https://www.bancobpi.pt/empresas/linha-de-apoio-a-economia-covid-19

https://www.santander.pt/pt_PT/Empresas/Produtos/Financiamento/Linhas-Especiais-de-Credito.html

https://www.bancomontepio.pt/linha-credito-capitalizar-2018-covid-19-empresas

https://www.novobanco.pt/site/cms.aspx?labelid=empresas_covid19

https://www.cgd.pt/Empresas/Pages/Medidas.aspx