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Companies covered by extension ordinances have tax incentives in 2023 and 2024

Companies that increase wages by at least 5.1% this year, through extension ordinances, will be entitled to the IRC tax benefit in 2023 and 2024, the Minister of Labor said on Wednesday.

The measure was explained by the Minister of Labour, Solidarity and Social Security, Ana Mendes Godinho, and by the social partners, to journalists, after a meeting of the Social Concert, in Lisbon.

The increase in the IRC, which was provided for in the income agreement signed in October in the Social Agreement and in the State Budget for 2023 (OE2023) will thus be applied in 2023 and 2024 also to the extension ordinances but, in the two years following, the tax benefit will only reach companies that negotiate directly through collective bargaining.

President of CIP warns that the economy is suffocating in rates and taxes

In question is the IRC tax benefit for companies that increase wages by at least 5.1% this year, through collective bargaining, as defined in the agreement. For the minister, this was the “balanced solution” found among the social agents for the implementation of the measure.

However, the solution did not deserve the agreement of the CIP – Confederação Empresarial de Portugal, with the president, Armindo Monteiro argue that the measure should cover all companies this year to increase wages by at least 5.1%, regardless of collective bargaining.

The president of the Confederation of Commerce and Services of Portugal (CCP), João Vieira Lopes, said that “the solution was not optimal, but it was acceptable” and indicated that the possibility will be discussed at the next meeting, in the field of Budgets. General State to 2024 (OE2024), be extended to more companies.

According to the OE2023 report, more than 500,000 companies will be able to benefit from the tax incentive to improve wages, a measure whose budgetary impact in 2024 will be 75 million euros.

The measure provides for a 50% increase in all costs -whether fixed salaries or social contributions- inherent to the salary increase.

Source: Observadora

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