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COVID-19: Portuguese tax measures

In the context of the public health emergency resulting from the spread of COVID-19, the State of Emergency was declared in Portugal on 18 March 2020.

To mitigate the negative economic impact of COVID-19 on companies and individuals, the following measures have been introduced in respect of taxation, social security contributions, employment and credit.

General measures

The time limits for paying corporate income tax (CIT) for 2019 and making advance payments for 2020 have been extended. The time limit for paying stamp tax in respect of the first quarter of 2020 has also been extended.

All proceedings and procedural acts (including all tax proceedings in judicial and arbitral courts and with the Portuguese tax authorities, as well as tax infraction and enforcement proceedings) have been suspended until the end of the exceptional situation.

Credit lines have been made available to assist Portuguese companies with their cash-flow management in the coming months.

Measures to help certain companies and sectors

Certain measures were introduced to help companies that meet one of the following criteria: a turnover of under €10m, a decline in turnover of at least 20% or having operations in a sector whose activity was suspended under the State of Emergency:

  • deferral of VAT payments and personal income tax and CIT withholdings which would otherwise have been due in the months of April, May and June. The relevant companies may pay the tax in three or six instalments without accruing interest or having to provide security
  • deferral of the payment of social security contributions payable by employers for March, April and May. The relevant companies may pay 2/3 of the contributions in three or six instalments without accruing interest from June onwards. This measures also applies to companies in the aviation or tourism sectors

Employers in special distress (meaning employers in suspended sectors or with a decline in turnover of at least 40%) may suspend their employees' employment agreements or reduce their employees' normal working hours and temporarily reduce their pay to 2/3. The Portuguese government also offers to pay up to 70% of salaries up to a maximum of three months.

Further information

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