New Exceptional And Temporary Regularization Regime Of Tax And Social Security

Author:Mr Rogério Fernandes Ferreira
Profession:RFF & Associados

On 3 October 2013, the Portuguese Government approved the new "exceptional" and "temporary" regularization regime for tax and social security debts.

According to this regime, any taxpayer (individual or corporate) may pay the full amount of their tax or social security debts while benefiting from full exemption from dilatory interest – 6,112% for the year of 2013 –, compensatory interest – 4% per year –, administrative costs, and from a special reduction of the penalties applicable. According to the information released, in order to benefit from this regime, the regularization payments must be made until 20 December 2013.

The use of this mechanism does not preclude the use of any defence mechanisms available to the taxpayer, including the possibility to challenge, administratively or judicially, the relevant debt. Moreover, all debts paid under this regularization mechanism shall be reimbursed, accrued of indemnity interest at a 4% per year rate, if the taxpayer obtains a favourable decision in the relevant procedures.

In practice, the payment of the debts covered by this regime will allow the taxpayer to challenge the enforceability and legality of the debts in question without dilatory interest, adding the possibility of being paid, on total the sum of the tax or contribution, a fixed rate of 4% (of indemnity interest) – which is superior to the interest paid today by the majority of financial institutions.

According to the Council of Ministers official announcement ( /ministro-da-presidencia-e-dosassuntosparlamentares/ documentosoficiais/ 20131003-cm-comunicado.aspx), the Portuguese Government approved this regime with the objective of granting the taxpayers one "last" opportunity for the regularization of their tax and contributive status, which is one of the requirements for accessing tax benefits, EU funding and public tenders.

Also according to the announcement, from an economic and social...

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