On June 27, 2022, Law No. 12/2022 was published, approving the State Budget for 2022. The State Budget Law introduces several tax changes, and we highlight below some of the newly approved measures:

Corporate Income Tax (IRC)

• Increase in the IRC exemption (from 50% to 85%) applicable to an amount corresponding to income from contracts that have as their object the assignment or temporary use of the following industrial property rights subject to registration (known as “patent box” ).

• Maintenance of the provisional rule regarding the attenuation of autonomous taxation in the case of tax losses of cooperatives and SMEs. It results in the inapplicability of the rule of the IRC Code which establishes an increase in autonomous taxation rates by 10% in the case of taxable persons who present tax losses. This rule will not apply in the 2022 tax periods, when the taxable person has obtained taxable profit in one of the three previous tax periods and the reporting obligations have been fulfilled in the two previous tax periods, or have started their activity in 2020 , 2021 or 2022.


• The OG provides for a legislative authorization for the definition of the legal concept of a startup, whose meaning and extension involve the determination of the effective thresholds of its eligibility for the granting of financial or fiscal support, with a view to promoting the national ecosystem of entrepreneurship and the definition of specific investment policies, in line with the reflections carried out at the European Union level contained in the EU Declaration Startup Nations Standard of Excellence.

• The Government is also authorized to establish a special tax regime applicable to the gains provided for in paragraph 7 of subparagraph b) of paragraph 3 of article 2 of the IRS Code (option plans).

Tax Incentive to Recovery (IFR)

• Approved the tax incentive regime for recovery, which consists of the possibility of deducting from the IRC collection of investment expenses in assets allocated to exploration, which are carried out between July 1 and December 31, 2022.

• The maximum cumulative amount of eligible investment expenses is €5,000,000 per taxable person, with the deduction being made in accordance with the following rules:

a) 10 % of eligible expenses incurred in the tax period up to the value corresponding to the simple arithmetic average of eligible investment expenses of the three previous tax periods;

b) 25% of eligible expenses incurred in the tax period in the part that exceeds the limit provided for in the previous paragraph.

• This regime replaces the previous Extraordinary Tax Credit to Investment II of 2020.

• IFR taxable persons who carry out, as their main activity, an activity of a commercial, industrial or agricultural nature and fulfill, cumulatively, the following conditions, may benefit from the IFR:

a) Have regularly organized accounting, in accordance with accounting standards and other legal provisions in force for the respective sector of activity;

b) Its taxable profit is not determined by indirect methods;

c) Have their tax situation regularized;

d) Do not terminate employment contracts for three years, counting from the first day of the seventh month of the tax period in which the eligible investment expenses are incurred;

e) Do not distribute profits for three years, counting from the first day of the seventh month of the tax period in which the eligible investment expenses are incurred.

• Eligible expenses, for example, investment expenses in assets allocated to exploration, are those relating to tangible fixed assets and biological assets that are not consumables, acquired in a new condition and that come into operation or use by the end of the period of taxation that begins on or after 1 January 2022. Investment expenses in intangible assets subject to decay are also eligible, namely:

a) Expenses with development projects;

b) Expenses with industrial property elements, such as patents, trademarks, permits, production processes, models or other similar rights, acquired for consideration and whose exclusive use is recognized for a limited period of time.

• The deduction is made in the IRC settlement for the tax period starting in 2022, up to 70% of the collection of this tax, depending on the relevant dates of the eligible investments.

For additional details, please contact us: gabinete.juridico@aip.pt.