Tax and Customs Authority

Personal Income Tax Services

Circular Letter No 20173, of 14 October 2014

The circular-letter in question informs that a new file format of Monthly Remuneration Statement (MRS) is available, as well as new version of the application to submit the MRS, which makes it possible to entry negative values, as follows:

  1. The entry of negative values is only permitted for the adjustment of income and withholding made in the same taxation period (that is, in the same year);
  2. The negative values entered in the MRS, in a given month, cannot exceed the sum of the accumulated values declared in the MRS of the previous months of the same taxation period and relating to the same income earner;
  3. Adjustments  of  values  relating to income paid in any given month of a different taxation period (year), which generate negative values, cannot be entered in the MRS relating to the month in which the adjustment was made, since it is not possible to offset values relating to different yea rs. In this case, a substitute MRS must be submitted for the month and year to which the va l- ues relate or, alternatively, for the month of December of that same year;

Moreover, the circular-letter informs that this new functionality will be available for submitting MRS relating to the month of October and following months, without prejudice that income paying entities may, should they wish to do so, continue to use the current procedure to correct stated values, that is, by replacing the MRS of the month in which the income was paid.

Tax and Customs Authority

Information Sheet (Ficha Doutrinária)

Case No 1995/2014, with agreeing order of 8 October 2014 of the General Director

Accounting obligations of companies – Documents storage period

In this information sheet, the Tax Authority clarified that the extension of the storage period for books, accounting records and corresponding supporting documents to 12 years (previously, it was 10 years), introduced by the Reform of the Corporate Income Tax, only applies to tax facts occurred in taxation periods beginning on or after 1 January 2014.

The Tax Authority further clarifies that this extension of the storage period for accounting data is in accord with the change of the tax losses reporting period , also extended to 12 years, which only applies to losses calculated in taxation periods starting on or after 1 January 2014.

Tax and Customs Authority Binding Information

Case No 7558, released on 21 October 2014

Fees – Supply of collective catering services to State bodies and local authorities, subject to the public contracts scheme

In this binding information, the Tax Authority analysed the scope of the exemption established for the transfer of assets and supply of services associated with the education activity, in accordance with Article 9(9) of the Value Added Tax Code (“CIVA”),  with regard to contracts entered into with State bodies and local authorities for the provision of services of supply of meals to education establishments .

In the case in question, the entity that requested the binding information intended a clarification concerning the question of whether the VAT exemption provided for in Article 9(9) of the VAT Code applied to contracts for the supply of meals to higher, basic or secondary education establishments, following invitations to tender concluded with municipalities.

The Tax Authority concluded that the scope of the said exemption is restricted to the provision of services relating to education and to the transfer of assets and supply of services associated thereto, including the supply of school meals, where done by establishments included in the National Education System and by establishments that, although not included in the said System, pursue similar purposes and are duly recognised by the relevant ministry.

The Tax Authority added, however, that it should be understood that, where those school meals are supplied to pupils by municipalities, these too fall within the scope of the exemption, given the sharing of competences that there is in this scope between the Ministry of Education and the municipalities.

Accordingly, the supply of school meals under different conditions than those set out in Article 9(9) of the VAT Code, as is the case of the provision of services of supply of school meals, carried out by organisations or companies that supply meals to municipalities or education establishments, cannot benefit from that provision .

For which reason, in this case, the Tax Authority ruled that the purchase by a municipality of services for the supply of meals from a specialised company, does not fall within the scope of the exemption and that the suppliers should pay VAT at the normal rate and exercise the corresponding right to deduction.