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April 9, 2021 - Comments Off on Fiscal representation after Brexit

Fiscal representation after Brexit

The end of the transition period for Brexit on 31st December 2020 brings old requirements as the need of having a Portuguese tax representative for UK residents holding a Portuguese tax number.

An order was issued by the Secretary of State for Tax Affairs (Order 514/2020) regarding the need to appoint a tax representative, by individual taxpayers and entities who are tax resident in the UK, as from 1st January 2021. This obligation is also required for UK residents that wish to register as self-employed and must appoint a VAT representative resident in Portugal.

As well, all UK residents’ holders of Portuguese tax numbers must update their tax information with the Portuguese tax authorities by appointing a fiscal representative until 30 June 2021, as penalties will apply for those not complying with such obligation.

 

April 2021
Edge International Lawyers

April 9, 2021 - Comments Off on New support for Companies in the pandemic context

New support for Companies in the pandemic context

Considering the spread of COVID-19 disease, measures were taken in an attempt to reduce contamination by "closing the economy". This recently published Decree-Law is meant to support companies in an effort to reduce the devastating effects of the pandemic. In this context, measures were approved to increase the support already given to companies, in order to protect the needs felt due to the mandatory confinement period. The extraordinary support for the reduction of the employer's economic activity, the extraordinary support for maintenance of employment contracts in a situation of business crisis also known as simplified "lay off" and support for the "progressive recovery" were therefore extended by this Decree Law.

The support of "progressive recovery", is an aid measure for employers affected by the pandemic which face themselves in a situation of business crisis, with a reduction of invoicing of at least 25%.

The employer can access this support with a temporary reduction in the normal working time of all or some of its employees.

This support is extended up until 30th September 2021, where new benefits have now been created, such as the new exemptions in Social Security contributions specially aimed at the tourism and cultural, events and show sectors.

In this framework, the employee was already entitled to receive a monthly salary compensation corresponding to the non worked hours, paid by the employer, in the equivalent amount of four fifths of the normal gross remuneration, with the limit corresponding to three times the guaranteed monthly remuneration (RMMG).

This Decree-Law introduces, a partial and full exemption of payment of Social Security contributions by the employer, during March, April and May 2021. The employer that had a reduction of invoicing below 75%, running an activity in the tourism and/or cultural sectors, supporting part of the salary compensation, corresponding to the non worked hours, is now entitled to the full exemption of payment of those contributions to its charge for the employees covered.

The employer, in the same situation, but with a reduction in invoicing equal or higher than 75% is now entitled to a partial exemption of 50% of payment of Social Security contributions on the same terms, plus the cumulative right of the support referred corresponding to 100 % of salary compensation, being borne by Social Security.

Such benefits only apply in cases where the level of employment is maintained while the support is in force, as well as in the following 90 days’ period, a level of employment which has to be the same as that observed in the previous month of the application filed.

In the case of simplified lay-off or extraordinary support for the maintenance of the employment contract in a situation of business crisis, there is again the possibility of access this support. The measure applies to Companies which activity has not been suspended or terminated, facing a decrease of activity (total or partial) of more than 40% in the month prior to the application to be made in March and April 2021 which has been significantly affected by the interruption of global supply chains or the suspension and cancellation of orders, in situations where more than half of the billing in the previous year has been carried out to activities or sectors that are currently suspended or closed.

The supporting measure now is also conferred to self-employed workers, individual entrepreneurs, managers and members of statutory bodies with management role, whose activity falls within the tourism, culture, events and show sectors, and who are in a situation of proven total stoppage of their activity or the activity of their sector is entitled to an extraordinary support due to the reduction of economic activity for the corresponding period.

As for the new incentive to normalise business activity, it can be applied by employers that have benefited from the extraordinary support for the maintenance of an employment contract or from the extraordinary support for the "progressive recovery" of activity. Employers under those circumstances will be entitled to the payment of 1 or 2 salaries per employee covered.

If it’s applied for up until 31st May 2021 the value is of two RMMG, and it will be paid by installments over a six month’s period. If it’s applied for on a subsequent date up to 31st August 2021, it will be paid for a value equivalent to 1 RMMG paid at once, corresponding to the period of three months. In applications made up to 31st May 2021, and during the 2 first months of this measure the right to 50% exemption of payment of Social Security contributions which would be borne by the employer accrues.

This new incentive, only applies, upon compliance of certain duties by the employer, who must maintain in a proven manner, the regular payments of Social Security and Taxes, as well as refrain from terminating, employment contracts through collective dismissal, individual redundancy and dismissal due to lack of performance of the employee.

Employees shall maintain, while the measure is in force, as well as for a period of 90 days following such measure, the level of employment observed in the month prior to submission of the application. For this purpose, the contracts that cease on their term or
due to disciplinary action or by resignation of the employee do not count.
This support is not cumulative, simultaneously with the support provided for the "progressive recovery" in a situation of business crisis, nor with the simplified lay off regime, not also being cumulative with the decrease or suspension set out in article 298 and subsequent articles of Employment Code.

5th April 2021
Cláudia Vaz Póvoa
Employment Department

April 9, 2021 - Comments Off on Taxation of cryptocurrency in Portugal

Taxation of cryptocurrency in Portugal

More good news for investors in the increasingly tax friendly environment

From a position of relative obscurity, cryptocurrency, being a form of digital money, has rapidly evolved into a widely used form of currency trading and payment. In fact, the most widely used form of cryptocurrency, bitcoin, experienced the most significant increases in 2016 and 2017 as compared to other currencies and ended up having more value than gold. However, there is no consensus on the qualification of cryptocurrency as a currency, nor is it tied to any Central Bank. In addition, it is not recognised as a payment method in Portugal.

However, the Portuguese tax treatment of cryptocurrency lends even more support to Portugal’s positioning as a tax friendly jurisdiction for international investment.
Whilst there is a lack of specific legislation, according to a binding opinion of the Portuguese Tax Authorities, gains deriving from the purchase and sale of cryptocurrency or its exchange for real currency may generate different types of taxable income: capital gains (income type G), capital income (income type E) or business or professional income (income type B). The good news is that, in practice, these gains do not represent a taxable event under categories G and E.

As for category B, and whether the purchase, sale or exchange of cryptocurrency is taxable as professional income, this will depend upon how regularly the taxpayer trades cryptocurrency. In other words, tax will only be due in Portugal if the buying and selling of cryptocurrency is a regular professional activity of the investment professional on behalf of third parties. Furthermore, according to another binding opinion from the Portuguese Tax Authorities, no duty VAT is payable on these operations due to a VAT exemption.

As a result, although there has been increasing regulation of cryptocurrency within the European framework, the current position in Portugal is that income deriving from cryptocurrency is not taxed unless it is generated in the exercise of a professional activity, as opposed to by way of investing personally/privately.

We have already advised many clients who invest in cryptocurrency and therefore have the experience and knowledge to successfully navigate investors through the specific treatment of cryptocurrency in Portugal.

April 2021
Edge International Lawyers

March 2, 2021 - Comments Off on Suspension of judicial deadlines due to covid-19

Suspension of judicial deadlines due to covid-19

Parliament and the Government have approved new exceptional and temporary response measures due to the impact of COVID-19 in Portugal, amongst which is the stay/suspension of procedural deadlines and the postponement of court hearings and acts.

All deadlines for the practice of procedural acts in proceedings before the courts are currently suspended, with some exceptions, as mentioned below.

For example, the law states that urgent proceedings (as defined in the law or by a judicial decision) will continue to run their course without any suspension, as long as all acts and/or hearings can take place through remote communication channels or, when it is necessary for these to be held in person, that the same comply with the recommendations of the health authorities.

As for acts and hearings pertaining to non-urgent proceedings, these may continue to take place, as long as all parties accept it and expressly declare that it is possible to carry out the act/hearing through remote communication channels. However, should the hearing entail taking evidence from witnesses or parties and, in criminal proceedings, hearing the defendant or the assistant to the Prosecution, these must take place in a court or another public building, as long as the site complies with the recommendations of the health
authorities.

The parties, their representatives or other intervening parties who are over 70 years old, immuno-compromised or suffering from a chronic illness, thus considered to be at risk, do not have to be present at the court, and may instead be heard through remote communication channels from their legal or professional address.

In all proceedings, the court clerks should continue to carry out the usual acts that do not involve the participation of the other parties. Likewise, judges should continue to issue judgements in all proceedings where it is not necessary to carry out any more acts and/or hearings.

February 2021
Litigation Department

March 2, 2021 - Comments Off on Golden Visa – Changes only in 2022

Golden Visa – Changes only in 2022

The Portuguese authorities have finally released the details on the upcoming changes to the Golden Visa regulations (Decree Law 14/2021, of 12th February).

Initially, it should be highlighted that such amendments will become effective on 1st January 2022. Until then, the existing rules and requirements remain the same. It should also be noted that the rules are clear to establish that whoever submits their applications until 31st December 2021 will have the same grandfathered under the current regulations and requirements in force.

In accordance with the details now released, the main changes will be as follows:
Property Investments: Minimum amount required remains the same - €500,000 and €350,000 (for urban renovation) but only in certain qualifying areas (interior areas)

Capital Investment: Minimum amount required of €1.5 M (previously €1M)

Investment Funds: Minimum amount required of €500,000 (previously €350,000)

Job creation: Minimum amount required of €500,000 + 5 new jobs (previously €350,000)

Science and Research Activities: Minimum amount required of €500,000 (previously €350,000)

Other categories: No changes

It should be noted that the changes to in the property category will only apply to residential properties.

As such, it will remain possible to invest in Lisbon, Porto and in all other areas in non-residential properties, such as commercial, offices, serviced apartments and others.

Please contact us for any additional information that may be required.

February 2021
Edge International Lawyers

February 25, 2021 - Comments Off on Extension of Aid Measures to Companies in 2021

Extension of Aid Measures to Companies in 2021

With a view to maintaining jobs, the extension of aid measures to companies has now been approved covering both the progressive economic recovery measure and the simplified lay off regime for 2021.

Thus, in situations where companies and establishments are subject to the duty to closure or suspension of activity, due to the pandemic, irrespective to the contribution payment by the employer to the remuneration compensation, the State will ensure that the employees covered by the extraordinary support for the maintenance of employment contracts, already provided for in Decree-Law No. 10-G/2020 of 26 March, often designated as lay off simplified regime, will receive 100% of the salary up to three times the minimum monthly guaranteed salary (MMRG).

In addition, support for the progressive economic recovery will be extended until the first half of 2021 and now for the first time, to Directors and Administrators of Companies who perform management roles in companies, who pay social security contributions and have employees under their responsibility.

Praça Duque de Saldanha,1 t (+351) 213191290
Edif. Atrium Saldanha, Piso 7 f (+351) 213527619
1050-094 Lisbon | Portugal info@edge-il.com
Lisbon | Porto | Algarve | London | Cape Verde

In this case, the payment of 100% of the remuneration up to three times the MMRG will also be ensured to employees covered, together with partial exemption of social security contributions of the employer.

Finally it’s now established that employers can apply to simplified lay off regime, migrating directly from the progressive economic recovery measure, in case they are in situation of forced lockdown or suspension of activity.

February 2021
Edge International Lawyers

December 18, 2020 - Comments Off on Protect yourself from a no-deal Brexit

Protect yourself from a no-deal Brexit

The SEF Portal for the online registration of British citizens who have established residency rights in Portugal went live a short time ago. Registering on the portal will allow eligible British citizens to continue to reside in Portugal through the application for a 5 year resident’s card in 2021. Registration will also facilitate travel between the UK and Portugal from 1 st January 2021 up to the receipt of the resident’s card. This resident’s card will allow British citizens to travel freely in the Schengen area and, after five years of residency, will allow British citizens to apply for permanent residency or nationality.

In order to be eligible, British citizens should hold an EU Residency Certificate. Registration is fairly straightforward but we do advise that you take advice before registering due to the fact that the registration is a fundamental part of the process of obtaining the resident’s card. The detail of the registration process is crucial and should it be submitted incorrectly, this could lead to delays or, for example, dependents not receiving the resident’s card.

We recommend that registration is effected as soon as possible and we have therefore tailored a service which will include: the registration itself; the management of the appointment to obtain the biometric data at the respective Town Hall; preparation of the documents for and assistance at this appointment; legal support up to the receipt of the resident’s card.

We are the only law firm in Portugal with over 30 years of experience in assisting British citizens with their legal matters in Portugal. We are also the leading law firm in immigration matters and are therefore uniquely placed to assist with this process.

Edge International Lawyers
December 2020

December 18, 2020 - Comments Off on Portuguese Nationality

Portuguese Nationality

The amendments to the Law of Nationality have now been formally approved by Parliament and ratified by the President and are effective since 11 th November 2020.

One of the main changes is related to nationality for children born in Portugal. In accordance with the new terms of the law, Portuguese nationality by origin is obtained by children born in Portugal provided that at least one of the parents is a legal resident of Portugal for at least one year. This change is a reduction of the minimum residency of parents from two years to just one year.

In addition, the amendments also establish the possibility of obtaining Portuguese citizenship to any foreign citizens who have a Portuguese second degree ancestor (i.e. grandparent) via declaration attesting such intention and proving the effective connection to the Portuguese community. This connection is confirmed simply by showing sufficient knowledge of the Portuguese language and absence of criminal activities or conviction.

It should also be noted that the Public Authorities are no longer able to oppose to the application for nationality on the grounds of absence of the effective connection to Portugal for cases of marriage or common law partnership that has lasted for more than 6 years or if the couple has common children of Portuguese nationality.

Edge International Lawyers
December 2020

December 18, 2020 - Comments Off on The new powers of judges to establish the alternate residency of the child with both parents in case of divorce, judicial separation of people and assets or invalidity of marriage

The new powers of judges to establish the alternate residency of the child with both parents in case of divorce, judicial separation of people and assets or invalidity of marriage

In an attempt to better lay in writing what was already the practice of some Family Courts in Portugal, the law has been expressly changed to foresee the cases where judges can now decree the alternate residency of the child with both parents.

Up until now, when decreeing the child’s residency and visitation rights, the court should decide in accordance with the former’s superior interest, but also take into account all relevant circumstances of the case, such as the possible existence of an agreement between the parents and the availability showed by them to promote frequent relations of the child with the other parent.

Now, the court can determine the alternate residency of the child with both parents, even if the same do not agree to this, should the court decide that it is in the child’s superior interest. It is also clarified that the alternate residency of the child with both parents does not prevent the possibility of one of the parents having to pay maintenance to the other. This will be more evident when there is a substantial difference between the income of each parent, with payment of maintenance being a way to ensure that the child maintains his/her standard of living up until now. It is also expressly mentioned that the court must hear the child before making a decision on any matters regarding parental responsibilities,
something which was not a mandatory requirement up until now.

Edge International Lawyers
December 2020

October 19, 2020 - Comments Off on Residency for holders of Passive Income

Residency for holders of Passive Income

For many years now that Portugal has implemented friendly immigration policies, granting residency rights to Non-Eu/ EEA/Swiss citizens who wish to study, work, trade, invest or enjoy retirement in Portugal.

On this topic, one option for Non-Eu/ EEA/Swiss citizens who wish to relocate into Portugal is to show sufficient and regular net passive income (pension, rental, interest, dividend or intellectual property income). This way of residency is commonly referred to as “D7 Visa” or “Passive Income Visa”.

Unlike the other ways of residency referred above, this is the only option in which the Applicant does not have to create, beforehand and within Portugal, the necessary conditions for the residency permit to be granted – it does not require a prior enrolment, employment, company incorporation or capital/property investment. The fact that the
Applicant holds in his country regular passive income of a certain amount is sufficient
to entitle him/her to residency in Portugal.

The application for this way of residency starts with an application at the Embassy/Consulate where the Applicant has residency, which will result in a residency
visa. Under this visa, the Applicant will then have to come to Portugal to switch his/her
visa for a Residency Permit, which will initially be granted for 2 years, with the
possibility of renewal within the same passive income requirements.

The “Passive Income Visa” offers the same social and professional benefits to its
holders as the Portuguese citizens enjoy, such as family reunion, visa-free entry and
circulation within the Schengen Area, free healthcare and education, the freedom to
study and work in Portugal, protection in unemployment and applying for the Non-
Habitual Resident tax benefits regime.

EDGE – SOCIEDADE DE ADVOGADOS, SP, RL
October 2020