Category Taxation in Portugal

Portugal Approves Tax Hike Plans

November 1, 2012 Taxation in Portugal

austerity hits taxpayersLISBON – Portuguese taxpayers are could soon feel the brunt of new austerity measures, including new taxes and several tax increases.

On October 31st the Parliament of Portugal approved the first reading of the 2013 national budget, which contains several new austerity measures, including cutting government spending by EUR 1 billion, the implementing a new transaction tax, and increasing the rates of income, capital gains, wealth taxes, which will cumulatively bring additional revenues of approximately EUR 4.3 billion.

The changes outlined in the proposed budget are intended to reduce Portugal’s deficit to below 4.5 percent and to ensure that the country meets the terms of its EUR 78 billion bailout package from the International Monetary Fund and the EU.

The budget reading was approved by...

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Portugal to Hike Income Taxes

September 25, 2012 Taxation in Portugal

PortugalLISBON – Portugal is looking at new measures to raise revenues in order to meet the financial targets set out for the country by the EU and the International Monetary Fund.

On September 25th the Prime Minister of Portugal Pedro Passos Coelho announced that the government will drop its proposed plan to hike social security tax, and will increase personal income tax rates along with cuts to the salaries of public sector workers.

Earlier this month the government announced its intentions to raise employees’ social security contributions from 11 percent to 18 percent, and to cut the rate of corporate income tax from 23.75 percent to 18 percent, but the proposal was met with immediate and widespread opposition from the public.

The government has now amended its plans in order to quell public p...

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Austerity Measures in Portugal Lead to Tax Dodging

January 16, 2012 Taxation in Portugal

Underground economy in PortugalLISBON – As Portugal faces austerity measures, more taxpayers are turning the underground economy and choosing to hide from their tax obligations.

New research published on January 16th by the University of Porto shows that value of the underground economy of Portugal grew by 2.5 percent in 2010, reaching a total worth of approximately 24.8 percent of the national GDP that year, and the unreported activity led to lost tax revenues of approximately EUR 8 billion for the year.

The new data indicates that the shadow economy in Portugal is much higher than in most other OECD countries in Europe, which have estimated underground economies worth 17 percent of the GDP on average...

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Tough Budget in Portugal to Cut Debt

November 4, 2010 Taxation in Portugal

flag of portugalPortugal is aiming to have one of the smallest budget deficits in the European Union by the end of 2011, a goal the ruling political party hopes to achieve through the newly approved budget, which slashes government spending and increases taxes.

In the wake of the recent debt crisis Greece, many smaller and vulnerable European economies are struggling with market pressure to reduce their national debt figures. Portugal, which currently has a budget deficit of 7.3 percent of GDP, hopes that its austerity budget will reduce the deficit to 4.6 percent by the end of 2011.

Portugal’s upcoming budget, which received its initial approval on November 3rd, outlines approximately EUR 5 billion worth of budgetary changes...

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