The Special Payment by Account (PEC) will no longer be mandatory for companies, as announced by Pedro Nuno Santos, but companies have to request exemption from the PEC and to be entitled to this exemption have to have the regularized situation with the tax authorities in the three previous tax periods.
The taxpayer applying for exemption from the Finance Portal shall be exempt from special payment on account until the end of the 3rd month of the respective tax period, provided that the declaratory obligations laid down in Articles 120 and 121 . [Artigo 120.º Declaração periódica de rendimentos e Artigo 121.º Declaração anual de informação contabilística e fiscal], relating to the three previous tax periods, have been fulfilled in accordance with the terms set forth therein ".
The waiver is valid for three tax periods. According to the provisional version of the EO for 2019, "the exemption referred to in paragraph e) of paragraph 11 is valid for three periods of taxation, verified the requirements therein,
Tax and Customs Authority to verify the tax situation of the taxable person ".
The Secretary of State for Parliamentary Affairs recently said that small and medium-sized enterprises will have "a victory" with the proposal of the State Budget Government for 2019, as it will end the special payment on account. This is the Budget that ends with the special payment on account. This is a victory for small and medium-sized businesses, "the government official said this week.
Companies are currently subject to a special payment on account to be made during the month of March or in two installments during the months of March and October of the year to which they relate or, "if they adopt a taxation period not coincident with the calendar year, in the 3 rd and 10 th months of the respective taxation period ".
The amount of the special payment per account shall be equal to 1% of the turnover relating to the previous tax period, with a minimum limit of EUR 850 and, where this volume is higher, equal to this limit plus 20% exceeded, with the maximum limit of 70,000 euros.
The special payment per account (PEC) is a way of paying the income tax to the State and is provided for in the Collective Income Tax Code (IRC). The PEC in the background an advance of the IRC that the companies do to the State. This advance amount is deducted from the IRC collection for that year. The companies are exempt from the special payment on account in the first two years of the financial year.
Another amendment to the IRC Code that can help companies is to repeal the rule that the taxable amount relevant for the application of this simplified scheme can not be less than 60% of the annual value of the minimum guaranteed monthly remuneration.
This is because the Government intends to implement a new simplified IRC scheme based on a taxation model of closer approximation to taxation on real income.