Expenses with electricity and natural gas will count another 20% for the IRC

In order to reduce the effects of inflation in the energy sector, the Government announced, last September, several measures to support companies and families. So, the electricity and natural gas expenses will be worth another 20% for IRC deduction, which translates into less tax payable. This measure is particularly important, as the energy bill is one of the most important expenses in any company’s bills. This measure is part of the business support program “Energy to Forward” and has immediate effects. The Government expects to spend approx. 1.4 billion euros. Note that this increase in IRC it also applies to expenses with fertilizers, animal feed and other food for agricultural production activities. Also read: I am thinking of opening a company. How does IRC work?

How important is this measure?

This measure, according to the Government, is the “instrument, from a fiscal point of view, more suitable for companies”. This is because, there will be a lower profit to be taxed by the Tax Authorities and consequently less IRC to be paid. That is, to offset the expected increase in electricity and natural gas expenses, the Government will increase the deduction of these expenses in the IRC when companies file their Model 22 statements next year.

Expenditure on electricity and natural gas: other support measures

Among the recently announced measures, two stand out suspensions until the end of the year. And these are related to: the Tax on Petroleum Products (ISP);and the of the carbon tax on natural gas used in the production of electricity and cogeneration.These two measures also have immediate application and cost about 25 million euros to the state coffers. Finally, it was announced the extension also until the end of the year: Read more: What’s the best way to save on electricity?

Can we expect more support?

Regarding the possibility of more fiscal support measures, the Executive underlined, when presenting these measures, that the energy situation we are experiencing will not change in the near future. So, in your opinion, families and companies must adapt to a new reality with higher prices. As for the possibility of advancing an additional tax on the extraordinary profits of companies in the energy sector, the Minister of Economy and the Sea, Costa Silva recalled that these profits are already being used to finance the Iberian mechanism – tool agreed between Portugal and Spain to limit the price of gas for electricity production. Still, Costa Silva says that this proposal is not set aside. In view of the present situation, the European Commission has already two proposals. They are: um ceiling on revenue for companies that produce electricity at low cost;and still the collection of a solidarity contribution of 33% to the oil companies.Also read: What is the impact of lowering the VAT on electricity on my bill?