Currently, Portugal thinking to take initiatives that would reform the corporate income tax law. The Corporate Income Tax (“CIT”) 2014 Reform Proposal, which is currently under public consultation. The main measures contained in the proposals are as follows:
- The CIT rate is gradually reduced to between 17% and 19% by 2018, starting in 2014.
- An optional simplified taxation regime applicable to small businesses is to be created. This will apply to enterprises which, among other requirements, have a turnover that does not exceed €150,000 and total assets below €500,000.
- Tax losses assessed after 1 January 2014 can be carried forward for 15 years.
- It is recommended that the minimum holding requirement to be a part of a tax group is reduced from 90% to 75%.
- The investment incentive tax regime and the contractual investment incentive are combined into a single simplified tax regime for investments up to €50,000,000 (which should be automatically applied) and a “contractual” tax regime applicable to investments above €50,000,000.
- Income derived from patents and other intangible assets registered after 1 January 2014 should benefit from a special tax regime whereby this income is only taxable over 50% of its amount.
- The acquisition cost of intangible assets with no defined useful life period can be amortized for tax purposes during the period of 20 years (only applicable to intangible assets acquired after 1 January 2014.
