Tax obligations


Are there any transitional tax measures to mitigate the impact of COVID-19?

Decree Law No. 37/2020 of March 31st, 2020 ("Decree Law No. 37/2020 ") approved an exceptional tax regime with the purpose of relieving the companies' cash flow management, in the context of the COVID 19 pandemic contingency rules.

Essentially, measures were established for the postponement and deferral of deadlines for compliance with tax obligations (submission of returns / payment of taxes), and measures that established the suspension of tax execution proceedings.


What does this exceptional regime consist of?

In short, Decree Law No. 37/2020 extends the time limit for compliance with reporting and payment obligations concerning income tax, Value Added Tax ("VAT") and Special Unified Taxation, extending, in some cases, the time limit for payment of the taxes in question and, in others, granting the possibility of paying them in instalments.

The aforementioned statute further determined the suspension of ongoing tax executions, and the non-application of the Customs Statistical Rate in certain cases.

Access to this exceptional regime depends, however, on the taxpayer's prior submission of a business plan to the tax office of the respective tax area until April 30, 2020, which may be extended by the Minister of Finance.  This is an essential element of the exceptional regime established, without which the taxpayer will not be able to benefit from the facilities provided for therein.


Which taxes are covered by the moratorium?

The moratorium on payment refers to taxes due between April 1st and December 31st, 2020 and is established, on a case-by-case basis, in the aforementioned business plan.


Which concrete measures have been established concerning the income tax?

For all resident or non-resident taxpayers with a permanent establishment under the organized accounting system, the deadline for submitting the annual income tax return for 2019 has been postponed to July 31, 2020 and the deadline for the annual accounting and tax return to September 30, 2020. This measure is applicable to IRPC taxpayers that have opted for a period other than the calendar year, with the necessary adaptations.

As for taxpayers with category B income, the deadline for submission of the annual accounting and tax information declaration was extended to November 30, 2020.

The deadline for fractioned payments due in August and November 2020 was extended to September and December 2020, respectively.

Finally, withholding taxes on income in categories A, B and C, which are made available to taxpayers as from April 2020, may now be paid in instalments no later than December 31st, 2020.


What about VAT?

Two measures were established:

  1. Taxpayers were granted the right to make payments relating to March and subsequent months in monthly instalments up to December 31, 2020, upon application and proof of a reduction of 30% or more in turnover, compared to the same period of the previous year, to the tax offices of the respective tax areas. Such measure is not, however, applicable to the tax due for reversal of the taxable person, pursuant to Article 6 of the VAT Code, and
  2. The taxpayer may further request, in the business plan, the payment in instalments of the tax for November 2020, which must be delivered in December; the decision, on a case-by-case basis, will be the responsibility of the Head of the Tax Office of the respective tax area


And the Customs Statistical Rate?

It was determined the suspension of the application of the Customs Statistical Rate, during this special regime, for the following situations:

  1. Addition of goods to the customs declaration
  2. Upon exemption request
  3. By a customs exemption procedure, with the exception of individual exemption procedures, namely for non-residents returning home on a permanent basis, diplomats, judicial police inspectors, magistrates and national police officers, and
  4. Addition in the customs exemption process


And with regard to the Special Unified Taxation of the micro and small enterprises’ special regime?

The deadline for the delivery of MOD 107 and its annexes for the first quarter was extended.

However, the aforementioned statute maintains the obligation to deliver MOD 107, even if there are no operations in that period, and even if the legal deadlines for delivery and payment for the subsequent quarters remain unchanged, granting the Minister of Finance with the power to extend them. 


What does the Decree-Law provide for concerning the payment of tax debts by instalments?

A special regime, applicable only to cases of payment by instalments provided for therein, i.e. included in the business plan.
Under that special regime:

  • Compensatory interest, default interest, and applicable fine, corresponding to the paid capital shall be waived if the application for payment in instalments, declarations and payments are made within the agreed deadlines. It should be noted, however, that failure to meet such deadlines will result in the collection of such interest and fine
  • Failure to pay three consecutive instalments implies the immediate maturity of the entire payable debt;
  • The payment in instalments does not release the taxpayer from its reporting obligations, and
  • As for the aspects that are not specifically provided for under this regime, the general tax legislation shall apply on a subsidiary basis


What about the ongoing tax execution proceedings?

Ongoing tax execution proceedings are suspended by renegotiating the payment of tax debts in longer periods and in instalments of up to 120 instalments.

However, renegotiation for more than 60 instalments will always be exceptional and duly justified, subject to the authorisation of the National Director of State Revenue, who will set the conditions of the payment plan, namely the minimum amount of each instalment.

In addition, legal interest shall always be payable for more than 60 instalments.

Nevertheless,  not renegotiated debts and debts in default as of December 31st, 2020 are automatically subject to enforced collection under the law.


Are there measures regarding the interaction between taxpayers and the Tax Administration (“TA”) due to the impact of COVID -19?

During the state of emergency, Tax Offices, Delegations and Customs Offices are only open to the public in case of absolute necessity and with reduced opening hours, privileging the use of digital and telephone channels as the safest way of attendance. The contacts of the Tax Offices are listed in the link: and of the Customs Offices in the link:

According to DNRE's informative note of March 27th, the opening hours are:

  • Finance Department - from 8 a.m. to 1 p.m., and at the Tarrafal Outpost in São Nicolau and at the One-stop shop in Calheta de São Miguel the opening hours will be from 8 a.m. to 11 a.m.
  • Customs and Customs Delegations - from 8 a.m. to 3 p.m and the Small Orders will be from 8 a.m. to 1 p.m.


Social Security


Is there a special regime for social security contributions?

To relief the cash flow of companies, an exceptional regime was established exempting contributions for the months of April, May and June 2020 to INPS.


Can all companies benefit from such regime?

No. Public sector companies and financial institutions are excluded.

Thus, all other private companies, registered under the general mandatory protection regime, which have a proven monthly reduction of 30% of their turnover in comparison to the same period, benefit from the exemption regime.

Proof of the reduction in turnover of companies benefiting from this exceptional regime is provided by the Tax Departments, which must certify such condition and send a statement to the INPS for recognition of the right to exemption of payment of contributions.


What about the accessory payroll and salary obligations?

The exceptional regime only exempted social security contributions, but expressly maintained the obligation for taxpayers to remit payrolls and salaries to the INPS at the intervals prescribed by law.



This information is being updated on a regular basis.

All information contained herein  and all opinions expressed are of a general nature and are not intended to substitute recourse to expert legal advice for the resolution of real cases.