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Newsletter May 2021

Legal Updates

Cannabis: detailed rules for licensing in Portugal

Administrative Rule no. 83/2021, of April 15th, comes under Decree Law no. 15/93, of 22 January, which defines the legal regime applicable to the trafficking and consumption of narcotic drugs and psychotropic substances, and Regulatory Rule no. 61/94, of 12 October, which establishes the rules for controlling the licit market in narcotic drugs and psychotropic substances.

The aforementioned Administrative Rule defines the requirements and procedures for granting authorizations for the exercise of activities related to the cultivation, manufacture, wholesale trade, transport, circulation, importation, and exportation of medicines, preparations, and substances based on the cannabis plant, for medicinal, medical-veterinary, and scientific research purposes.

The authorizations for the exercise of the cultivation of the cannabis plant for other purposes, namely industrial, as well as the respective safety measures to be adopted are also defined in this Administrative Rule.

Thus, its main objective is to specify the rules that must be followed for the licensing of activities related to this plant, thus constituting a relevant development in the legal regulation of this matter in Portugal.

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The recent amendment to the Labor Code: transfer of business

On April 9th, Law no. 18/2021 of 8 April came into force, extending the legal regime applicable to the transfer of a company or establishment to situations of transfer by the award of a supply of services through a public tender, direct award, or any other means, thus amending articles 285, 286 and 286-A of the Labour Code.

From now on, when an establishment or company is transferred as a result of a public tender, direct award or by any other means of selection, in the public and private sectors, such as the award of a contract for the supply of security, food, cleaning or transportation services, the company that wins the tender – the awarding entity – will have to take on the employees who have been transferred and maintain all the employment rights that each of them had at the time of the award (including remuneration and seniority).

Furthermore, under the current wording of article 286-A, employees of the awarding entity who are included in the process involving a change of employer may also oppose to the aforementioned transfer, while retaining their employment relationship with the awarding entity.

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Business Updates

Amendments to the CIRC and other tax regimes

Law 21/2021 has been published, amending the Statute of Tax Benefits (STB), the Stamp Duty Code (SDC), the Investment Tax Code (ITC), the Vehicle Tax Code (VTC) and the Single Circulation Tax Code (SCTC), establishing an extraordinary measure for counting time limits under the Corporate Income Tax (CIT).

In general, several changes in the different regimes stand out:

  • STB: determination of the extension of the validity of different tax benefits, as is the case of benefits relating to intellectual property income and certain benefits relating to the financial system and capital market.
  • ITC: extension of the deadline for contractual tax benefits and regional state aid.
  • SDC: alteration of the exemption applicable to the reporting of securities or equivalent rights performed in a regulated market or in a multilateral or organized trading system, as well as the reporting and financial guarantee performed by financial institutions.
  • CIT: determination of the suspension of the time limits for reinvestment of realizable values and the time limits for deduction from taxable income of expenses that could not be deducted in the period to which they relate due to insufficient collection.

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The Energy Labeling System

The European Regulation 2017/1369 established an energy labeling system, which was implemented in the Portuguese legal system through the Decree-Law No. 28/2021, of April 20th.

Following the technological evolution, an obligation on all energy providing companies arises in order to indicate the consumption of energy and other resources in products and services related to energy, through labeling and other relevant information.

This Decree-Law meets environmental awareness, allowing consumers to make more informed and efficient choices. It is intended to reduce energy consumption, innovation and investment in energy efficiency and to recognize economic operators that develop and manufacture the most efficient products.

This Decree-Law also foresees greater transparency of energy service providers. Such transparency is also reflected in the provision of energy services, aiming the standardization of the use of the Portuguese language on all labels; the supervision of compliance with the regulation of the legislation in question by “ASAE”; the control of energy products coming from Third States.

Moreover, the violation of the legal regulation may result in the application of fines and administrative offenses ranging from 2,000.00€ to 44,000.00€.

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