The government of Portugal doesn’t want to create another disturbance to the foreign investment, looking at this as a way to recover from the economical consequences from Covid-19, so it decided to put on hold the alteration to the Golden Visa.
Portuguese Golden Visas, economic misdemeanors, VAT for drinks in restaurants, various tax benefits and a new tax on single-use plastics.
These are some of the matters for which the Government has asked the Parliament for authorizations to legislate, within the scope of the State Budget for this year, 2020. Legislative authorizations were granted, but the matters, which the Executive should address, ended up not leaving the paper, with the only exception being the VAT on electricity.
Luís Leon, a tax specialist at Deloitte admits that In times of COVID-19, “it is more or less expected” that some legislative authorizations will not be used. “The Government has a difficult balance between the fall in GDP and the control of the pandemic”, so, “taking into account that an atomic bomb has fallen on the world economy, it is admissible that the priorities have been changed”, says Luís Leon.
The promised changes to the Portuguese Golden Visa, also known as Residency by Investment Programme, were the first to fall apart. As early as April, the Ministry of Foreign Affairs publicly said that changing the law envisaged on the State Budget was not “a priority at the moment” and would have no effect until the end of the year.
The change in the cause was to favour low-density regions as a residency by investment option, focusing on the territory of the Intermunicipal Communities of the Interior and the Autonomous Regions of the Azores and Madeira.
With the economy falling and the country in confinement, the Government did not want to create another disturbance to foreign investment at the same time the country is in economical recovery, hence these changes were put on hold.
Another measure that was kept on hold, was the one that predicted a decrease in the energy tax. The huge contribution on the energy sector (CESE) that is charged to companies such as EDP, REN and Galp, should have started reducing this year. The legislative authorization expected for this change lasted only 90 days and expired at the end of June. In September, the Ministry of Finance - to which the Minister for the Environment and Digital Transition had referred the matter - replied to the Public that “the [CESE] process is under evaluation”.
Source: Jornal de Negócios
