The municipalities that decided not to apply the IRC tax on the taxable profit of companies installed in their municipality increased compared to 2020, from 96 to 119, with nine less to charge the fee at the maximum amount.
According to the list of municipal tax rates on taxable profit in corporate income tax (IRC) for fiscal year 2020, recently released, among the 308 municipalities this year 119 who decided not to apply this tax.
The law provides that municipalities can deliberate annually a spill, up to the maximum limit of 1.5%, on the taxable profit subject and not exempt from corporate income tax, “which corresponds to the proportion of the income generated in its geographical area by taxpayers residing in Portuguese territory who are primarily engaged in an activity commercial, industrial or agricultural and non-residents with a permanent establishment in that territory ”.
Bragança, Arganil, Oliveira do Hospital, Mira, Vinhais, Oleiros, Albufeira, Bombarral, Cadaval, Portalegre, Lousada, Ponte de Lima, Boticas, Lajes das Flores, Madalena or Machico are among those who have dispensed with the spill, and already in the year past had made the same decision.
Between the municipalities that this year joined the list those who will not charge for the spill include Ansião, Lagos, Elvas, Viana do Alentejo or Cabeceiras de Basto.
For their part, Ovar, Redondo and Figueiró dos Vinhos, which last year had applied the spill for the maximum rate of 1.5%, opted to fully exempt companies installed in their territory.
The same list shows that fewer municipalities have decided to apply the municipal surcharge rate at its maximum value of 1.5%: there were 135 in 2020 and this year there are 127.
Among those that came out of the 1.5% level are, among others, Beja, Vizela, Gondomar, Montemor-o-Velho, Vila Nova de Gaia or Trofa.
Alter do Chão and Fronteira, for their part, joined the group that will apply the maximum rate on taxable profit for 2020, not having done so last year.
Despite the fact that most municipalities apply the general spill rate (choosing the maximum or lower values), a large part chooses to follow it reduced rates or exemptions depending on turnover, job creation, activity sector or the fact that they have their registered office in the municipality.
In the explanations that precede the listing of municipal spills, the Tax and Customs Authority (AT) says that only “taxable persons who meet the specific requirements defined by the municipality” and the taxable person “do not meet the requirements to take advantage of the reduced rates any of the exemptions launched by the municipality ”.
On the other hand, “only taxable persons who meet the specific requirements of each exemption defined by the municipality can benefit from exemptions from municipal surcharges”.
In all other cases, companies are subject to the standard surcharge rate that the municipality decides to apply in the year in question.
The data now released show, for example, that in Lisbon (where the standard rate is 1.5%) companies whose turnover in the previous year did not exceed 150 thousand euros or that have created, created and maintained for three years at least five jobs, benefit from spill exemption.
Lisbon also attributes exemption to taxable persons whose turnover does not exceed 1.2 million euros and with an activity code (CAE) in the retail, restaurant or beverage establishments sectors.
In Cascais – which opted for a general rate of 1.25% – companies with a turnover of up to 150 thousand euros are subject to a reduced spill rate of 0.10%.
Matosinhos chose to set the general rate at 1.5%, but foresees several levels of reduced rates for companies with turnover between 300 thousand and 150 thousand euros, and exempts micro and small companies that in the previous tax period have not exceed the 150 thousand euros of turnover.