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Newsletter September 2019

Legal Updates

President of the Republic promulgates amendments to the labour code

On August19, the President of the Republic promulgated the amendments to the Labour Code which have been extensively debated this summer.

The main and most controversial of the amendments introduced is the extension of the scope of Article 112 (1) (b) of the Labour Code and, consequently, of the 180-day trial period. It has already been announced by a number of political parties with representation in the Assembly of the Republic that they will ask for the constitutionality of this amendment to be reviewed.

Among the amendments are also the reduction of the maximum time limit for fixed-term and uncertain-term contracts, from three to two years and from six to four years, respectively.

We also note the increase in the compulsory number of training hours, the limitation of six renewals to temporary employment contracts, the elimination of the individual hours Bank and the limitation of three renewals for fixed-term contracts.

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Arbitration: New consumer protection

On August 16, law no. 63/2019 was published, which will enter into force on September 16. It will amend Article 14 of the law on Consumer Protection and it brings important news.

Conflicts between consumers and providers of professional goods or services with a value of less than €5.000 shall be subject to arbitration or mediation provided that the consumer expressly elects such route.

The decision whether or not to refer low-value consumer disputes to arbitration and mediation centers thus falls now exclusively to the consumer.

Consumers who elect this route will have to be informed at the beginning of the proceedings that they have the right to be represented by a lawyer or a solicitor. If they do not have the economic means to do so, they may apply for legal aid from Social Security.

The adoption of the new law will certainly represent a challenge for arbitration centers, which will likely face an exponential increase in the number of cases submitied to them.

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Business Updates

Remuneration in cryptocurrency is vat exempt

The Portuguese Tax and Customs Authority (TCA) was once again confronted with the emerging activity of cryptocurrencies. This time relating to the Value Added Tax (VAT).

A cryptocurrency is produced essentially through mining, which consists on the processing of information (namely transactions between users) in blocks, respecting a given network (hence the term blockchain).

Further, the type of payment the person or entity that carries out this kind of mining activity is the cryptocurrency itself and, mainly, the exchange of that cryptocurrency for a certain currency (e.g. euros or dollars).

The TCA clarified in a binding information request, based on the Hedqvist case held in the EU Court of Justice*1, that, like traditional currency transactions, this is a provision of services which is in fact subject to
the VAT Code, but is covered by a tax exemption.

 


*1 – Judgment of the Court (Fitih Chamber) of 22 October 2015, Skatieverket v David Hedqvist, check here

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Revolut is settling in northern Portugal

Revolut, a UK-based company holding a mobile banking application, which has 6.5 million customers across Europe, intends to install its second largest European unit in Porto by the end of 2019.

The British company intends to invest in Portugal approximately four million euros in the next five years, and the location chosen for the expansion is the old building of The Amorim & Amorim lithograph in the city of Matosinhos, which is receiving restoration work and will accommodate 470 workers.

Revolut is a technological start-up valued at more than USD 1 billion, and the decision to choose Porto for the opening of a new unit is closely connected with the prestigious universities located in the north of the
country, the proximity to the sea and the fact that this area has proven to be an ideal market for technological companies.

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