Cooperatives, micro, small and medium-sized companies and the so-called Small Mid Caps (small-medium capitalization companies) half of the third IRC Payment on Account may be waivedto be paid next December, according to a government order, published this week. […] half of the third payment may be waived on account of the IRC […] relating to the taxation period that begins on or after January 1, 2022”, reads the order signed by the Secretary of State for Tax Affairs, António Mendonça Mendes. present inflationary context “accentuated by the current situation of war in Ukraine” and with the “crucial importance of maintaining support for economic activity” which resulted in the need to exceptionally adjust the tax payment flexibility regime.
To which companies does this measure apply?
The 50% exemption from the third Payment on Account applies only to cooperatives, micro, small and medium-sized companies, and companies qualified as Small Mid Caps (small-medium cap). Micro, small and medium-sized enterprises (SMEs) are companies that employ less than 250 workers and whose annual turnover does not exceed 50 million eurosor whose annual balance sheet total is less than EUR 43 million.Medium company: company that employs less than 250 people and whose annual turnover does not exceed EUR 50 million or annual balance sheet total does not exceed EUR 43 million, and which it is not classified as a small and/or micro-enterprise.Small business: company that employs less than 50 people and whose annual turnover or annual balance sheet total does not exceed EUR 10 million, and which is not classified as a micro-enterprise.Micro enterprise: company that employs less than 10 people and whose annual turnover or annual balance sheet total does not exceed 2 million euros.A Small Mid Cap is, according to the law, a company that, not being an SME, is employed as an autonomous company, up to 500 workers.It should be noted, however, that the waiver of half of the third Payment on Account “is only applicable to deliveries made by the controlling company, as a result of the application of the Special Regime for Taxation of Groups of Companies, provided for in articles 69 and following of the IRC code, when all the companies that make up the group are classified as micro, small, medium-sized companies or as a small-medium capitalization company (Small Mid Cap)”. ?
How are Payments on Account calculated?
Payments on Account are tax due by all businesses that made a profit in the previous year and calculated income taxC. In practice, it is a way for companies to advance the IRC they have to payrelative to the activity of the same year, but whose final value is only determined in the following year, with the delivery of the annual Model 22 declaration. companies make three payments on account – in july, september and December – the value being calculated based on the tax paid for the year prior to the payment. However, the companies can suspend the third installmentif they verify that the amount they have already advanced exceeds the tax they have to pay.
Turnover equal to or less than 500,000 eurosPayment on Account = (IRC paid in the previous year – withholding tax made in the previous year) x 80%;Turnover of more than 500,000 eurosPayment on Account = (IRC paid in the previous year – withholding tax made in the previous year) x 95%. The calculated amount is divided by three and paid in three installments.Also read: State Budget: What do companies gain and lose?
November VAT paid in three or six interest-free installments
The order now published also determines that the November VAT will be able to be paid in three or six interest-free installmentsas the Secretary of State for Tax Affairs had already announced. of VAT in three or six monthly installments, with a value equal to or greater than (euro) 25without interest”, reads the order. This measure had already been instituted in the two years of the pandemic, with the aim of minimizing the effects that the Covid-19 pandemic had on the activity of companies. electricity and natural gas will count another 20% for IRC