On 24 July 2020, Portugal published Law No. 27-A/2020 in the Official Gazette and entered into force on 25 July 2020. The law provides for the Supplementary 2020 Budget and an economic and social stabilization program in response to the Covid-19 outbreak. Summary of the measures are following:
An extension of the allowed loss carry forward period to 12 years in respect of losses incurred in the 2020 and 2021 tax years.
A 50% reduction of the first and second payments on account in 2020 for companies that have experienced a decrease in turnover of at least 20% in the first 6 months of 2020 as compared to the earlier period. A full exemption of the first and second payments on account in 2020 for companies that have experienced a decrease in turnover of at least 40% in the first 6 months of 2020 as compared to the earlier period;
A 20% corporate tax credit for investment expenses incurred between 1 July 2020 and 30 June 2021, which is capped at expenses of EUR 5 million and limited to 70% of the tax due. The Budget provides for a special regime for mergers of qualifying SME (with similar activity, at least, in the last 12 months) that allows not applying said limit and for an exemption from state surtax within a 3 year period.
