Law No. 19/2022 provides exceptional measures to support families and enterprises on adverse and unpredictable inflation context. The said measures which shall be applicable in 2023. can be summed up as follows:

1) Establishment of a maximum update rent’s coefficient applicable in 2023, up to 1,02, notwithstanding the existence of an agreement between the parties.

2) Implementation of a special taxation regime for rental income to be received in 2023, applicable to rental contracts in force prior to 1st of January 2022, reported to Tax Authority, and which rent update in 2023 is not higher than 1,02.

For the computation of rental income, a 0,91 coefficient shall apply, after the deductions provided for on the Personal Income Tax Code, which means that 9% of the net rental income will be excluded from taxation. The longer the rental contract the higher will be the tax benefit, as the applicable coefficient will vary between 0,90 (in case the rental contract has a minimum duration of 2 years) and 0,70 (v.g. in case the rental contract has a minimum duration of 20 years). In such scenarios, between 10% and 30% of the net rental income will be excluded from Personal Income Tax.

As for companies subject to Corporate Income Tax, a 0,87 coefficient shall apply (except for Corporate Income Tax taxpayers with simplified regime). This way, 13% of rental income obtained by companies will be excluded from Corporate Income Tax.

3) Application of reduced VAT rate (6%) to electricity supplies, excluding fixed amounts, provided contracted power does not exceed 6,9kVa, capped at i) 100kWh for a 30 days period or ii) 150kWh for a 30 days period, applicable to families composed of 5 people or more.

This new framework shall be applicable between 1st of October 2022 and 31st of December 2023.

These measures need further regulation, yet to be approved.

4) Establishment of a transitional regime for update of retirement and disability pensions, subsidies and complements from the Portuguese Social Security.

This regime will only apply to social benefits granted before 1st of January 2022. These social benefits shall be updated on the following terms, from the 1st of January 2023: i) 4,43% if the benefit is equal or lower than €957,40, ii) 4,07% if higher than €957,40 and lower than €2.872,20 and iii) 3,53% if higher than €5.744,40.

5) Establishment of a redemption regime for saving schemes (retirement, education, retirement/education) with no penalization, up to a monthly limit of €478,70, according to the terms and conditions of each scheme. This exceptional regime shall be applicable between 1st of October 2022 and 31st of December 2023.

6) It is clarified unseizability of the extraordinary support for retirement and other pensions, as well as of allowance of 125 euros per adult and of 50 euros per children foreseen by Decree-Law 57-C/2022.