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Newsletter February 2022

Legal Updates

The Increase of the National Minimum Wage

It was on December 2, 2021, that the Government, in front of the Permanent Commission of Social Concertation, decided to approve the increase of the value of the Guaranteed Minimum Monthly Wage to 705 euros with effect from January 1, 2022, in Decree-Law 109-B/2021.

This was a measure created in favour of the valorization of the national minimum wage (henceforth SMN) enhancing the recovery of labour income and also the purchasing power of workers. Therefore, after several meetings with the social partners, in order to fulfil the commitment made in 2015 to reach 2023 with an SMN of 750 euros promoting a more dignified work, promoting economic growth that represents a great financial weight in the economic situation of companies.

Consequently, Portugal continues with one of the highest ever increases in the SMN (4.6%) among the 22 EU countries, resulting in a 39.6% growth since 2015, and is estimated to cover approximately 880,000 workers.

Taking into consideration that this increase may be difficult for some companies to bear in view of the current pandemic situation, Portugal has also implemented an “exceptional support” for these companies in order to support this increase of 112 euros per worker.

This support had already been implemented in 2021, acting as compensation for employers who have in their service workers receiving the SMN. It will then be paid “once only” in the amount of 112 euros per worker, with a further 56 euros of support directed to each worker who receives a remuneration between 665 (former value of the SMN) and the current 705 euros.

With this increase Portugal aims to increase the burden of wages in the GDP, bringing this factor closer to the European average, with wages paid in the EU representing about 47% of the overall wealth of European countries, compared to a percentage that is around 45% in Portugal.

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The New Consumer Protection Practices

Decree-Law 109-G/2021, which will come into force on May 28, 2022, partially transposes European Union Directive 2019/2161 on consumer protection (Omnibus Directive), imposing new rules on topics such as price indication and disloyal commercial practices at a distance.

Regarding prices, the focus was in particular on goods intended for retail sales. The duty of information on the part of the trader has been extended to include the duty to inform about any compatibility and interoperability, in terms of software and hardware use, with other goods of the same category. Additionally, it is mandatory to indicate, in addition to the value on promotion, the lowest sale price of the good in the last 30 days.

To protect the economic interest of the consumer, an express prohibition of practices that reduce the lifetime of a good to stimulate its use, of which the big technological companies have been accused.

As for disloyal commercial practices, the scope of application has been expressly extended, since the concept of product will also encompass digital content and services, establishing stricter rules for online marketplace providers. In particular, the resale or presentation of false evaluations or recommendations about a product or service will now be considered an unfair practice.

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Business Updates

47 million euros to help SME’s to protect their Industrial Property

Early this year, the European Commission together with the European Union Intellectual Property Office (EUIPO), launched a new EU Fund for Small and Medium-Sized Enterprises (SME’s). This Fund aims to foster the growth of these types of companies by helping them to protect their Intellectual Property rights.

This new European Fund enables support, for the first time, in the protection of Intellectual Property in the modalities of international patents and trademarks/designs, thus constituting an important aid for SMEs.

The EU Intellectual Property Fund has a budget of 47 million euros and will provide support in the following areas:

  • Refundment of fees charged by the Member States for pre-screening services of the Industrial Property; Refundment of fees charged by the Member States regarding the registration of trademarks and designs;
  • Refundment of fees charged by the World Intellectual Property Organization regarding the obtaining of international protection for mv arks and designs or templates;
  • Refundment of fees charged by national patent offices for patent registration in 2022;

From 2023, other services may be covered, such as partial refundment of the costs of previous technology research, patent application, and private IP consulting costs charged by IP lawyers.

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Essential notes of the new legal regime for e-commerce platforms

In the last two years, due to the pandemic situation we have experienced, we have witnessed an exponential growth of e-commerce platforms. The way we consume has changed substantially and suddenly. From one day to the next, we found ourselves unable to use traditional means of consumption, requiring a great effort of adaptation and innovation to know how to get around the situation and create new business opportunities.

Based on this context, e-commerce platforms have played a decisive role in the recovery of the European economy and have enabled job creation and business development. 

So that in 2022 it will be possible to solidify this bet on digital means of selling goods and services, we note 4 essential points at the level of VAT taxation that should be taken into consideration:

  • When selling goods and services at a distance, when the final consumer resides within the European area, the rates in force in the destination country will apply. Therefore, it is recommended that companies adjust the final price of the products considering the destination country of the goods.
  • To facilitate VAT taxation, it is no longer necessary to register in the VAT One-stop shop of each EU country where is to sell the goods, and for this purpose, it is sufficient for the taxable person to be registered in the VAT One-stop shop of the country of origin.
  • It is important to point out the end of VAT exemption for imported products worth less than 22€.
  • Regarding extra-EU transactions, marketplaces become responsible for ensuring the collection and settlement of the tax in the destination countries of the goods sold through them.

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