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.