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Newsletter May 2019

Legal Updates

Reduction of personal income tax in the long term renting is already regulated

In the past 12th April, Decree no. 110/2019 was published, regulating the tax benefits of the personal income tax in the long-term renting.

In order to benefit from this reduction of the Personal Income Tax in the long-term agreements (i.e. with a duration equal or superior to 2 years), the owners will be obliged to communicate to the Tax Authority the rental agreement, its modifications, and present the proof of payment of the stamp duty, that corresponds to 10% of the agreed monthly rent.

It should be noted that the termination of the rental agreement by the landlord, without just cause, will give rise to the loss of this benefit and to its restitution, without impairing the effective termination of the contract, as long as the legal requirements are respected.

The legal diploma in question has retroactive effects, being applicable to all the long-term rental agreements concluded or renewed from January 1st 2019 onwards.

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New restrictions to publicity aimed at children under 16 years old

Law n. 30/2019, April 23rd, promoted a modification to the Advertising Code, introducing restrictions to the publicity aimed at children under 16 years old, when said advertising is related with foodstuffs and beverages with a high energy value, salt content, sugar, fatty acids and trans-fatty acids.

These restrictions will come into force on June 16th and they will be extended to a number of means of advertising. The legal diploma prohibited publicity to the abovementioned products in pre-schools, primary and high schools and in children’s playgrounds. The media will also be affected by this ban, since the advertising of products with the aforementioned characteristics will also be barred in the 30 minutes before and after children’s programs, in cinemas and on websites or networks, with content for this age group.

The violation of these prohibitions, which will come into force in June this year, may imply the application of fines between € 1.750 and € 3.750 or € 3.500 and € 45.000, depending on the infringer being a natural or a legal person.

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Business Updates

SIGI – The new companies that are dividing the parliament

Similarly to REITs (“Real Estate Investment Funds”), on the past February 1st, the Decree-Law n. 19/2019 came into force introducing a new type of real estate investment companies, in Portugal.

In accordance with the preamble of the above-mentioned diploma, these constitute a “new vehicle of promotion of investment and boost of the real estate market, particularly of the renting market”.

In only three months, the decree law has caused disagreement in the Parliament, already counting with three requests of termination of validity presented by PCP, Bloco de Esquerda e Verdes. Adding to these requests, there were two proposals of modification of the present diploma presented by PS and PSD.

The parliamentary concern with the new regime is connected with the fact of, according to PCP and Bloco, this being an instrument that promotes speculation and not stimulation, and that guarantees tax benefits to companies that do not need to rent a home.

Investors witness this parliamentary concern, fearful that the modification of the regime not only creates too many limitations but also makes it absolutely featureless and impracticable.

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International business fair in Portugal

In the next 6th and 7th of June, in Exponor, Matosinhos, it will take place the 3rd Edition of FIN (“Feira Internacional de Negócios”). FIN2019 is part of an international project that connects three continents through three annual events, occurring in Portugal, Macau and Brazil.

This event receives wide international acknowledgement, gathering businesspersons from the entire world and from different sectors. The event intends to boost the establishment of partnerships and cooperation protocols between the participants, at an institutional and business level, thereby creating an excellent opportunity for the exposure of products and services and the increase of the network of the participants, facilitating the access to opportunities of multi-sectoral business and their implementation.

With these goals in mind, FIN gathers an exhibition space of companies and institutions, an area of seminars and workshops given by reputable institutions and a space for meetings Business 2 Business, among other events that foster the interaction and networking between the participants, always with the end goal of business promotion, directly connecting demand and supply.

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