Tax and Customs Authority
Binding Information relating to Case No. 2014 000628, of 16 April 2014, published on 8 May 2014
Tax Benefits for Investment (CFEI of 2013 and RFAI of 2010 and 2013): Limitations, accumulations and priorities in tax rebates
With this Binding Information, the Tax and Customs Authority clarifies doubts on how to proceed with tax rebates relating to 2013 where the following tax benefits for investment simultaneously apply:
- Regime Fiscal de Apoio ao Investimento (“RFAI”) (Tax Regime to Support Investment), with the limits established in Law No. 10/2009 of 10 March: 25% of the tax due;
- RFAI with the limits applicable as from 2013, with its inclusion in the Investment Tax Code (“CFI”): 50% of the tax due; and
- Extraordinary Tax Credit for Investment: 70% of the tax due.
The binding information points out that the expenses provided for in the RFAI relating to investment made in taxation periods before 2013, but which are carried forward to the years of 2013 and 2014 due to the insufficiency of taxable income of previous periods, continue to be subject to the maximum deduction limit of 25%; the 50% limit provided for in the CFI does not apply to them.
In this context, it is stated that, where all the tax benefits referred to above are applicable to a taxpayer within the same taxation period, the deduction must be made based on the priority with which the right to the benefits arises.
Accordingly, the amount resulting from the application of the RFAI approved by Law No. 10/2009, should be deduced first. Subsequently, the deductions established in the other two regimes can be made, within the 50% and 70% limits, calculated only taking into account the remaining tax due.
Tax and Customs Authority
Binding Information relating to Case No. 6706, of 16 May 2014, published on 23 May 2014
Tips given by third parties – transactions not subject to VAT
With this Binding Information, the Tax and Customs Authority notes that tips and gratuities are not consideration for transactions within the scope of VAT, inasmuch as they are given for work performed with subordination vis-à-vis the employer, and, therefore, the person who performs the work being tipped or to whom the gratuity is given is not qualified as a VAT taxpayer.
Accordingly, the invoice issued can state the amount of the tip/gratuity (which, however is not mandatory), but separately, since the same is not a part of the taxable amount of the underlying VATable transaction. In this case, it will be enough to mention that the amounts in question relate to tips or gratuities.