The President of the Republic promulgated the parliament diploma that changes the operating rules of the IRC incentive for salary appreciation, eliminating the obligation for companies to reduce salary inequalities between workers to access the tax incentive.
In a note released this Tuesday, 4th, on its website, the Presidency states that Marcelo Rebelo de Sousa “enacted the decree of the Assembly of the Republic that amends the Tax Benefits Statute”.
It is in this diploma that, in article 19.º-B, the “tax incentive for salary appreciation” is enshrined, which, until now, excluded employers from this IRC tax benefit that increased the “salary range of workers” in relation to the previous year, that is, that increased inequalities in salaries between the base of the 10% of best-paid professionals and the 10% worst-paid.
With the diploma that Marcelo Rebelo de Sousa has now promulgated, approved by parliament on October 17, the obligation to reduce inequalities is no longer one of the conditions required for companies to benefit from this incentive.
This change will now apply “to tax periods beginning on or after January 1, 2025”.
The tax incentive translates into a deduction from the IRC of the costs incurred by companies with workers’ salary increases, depending on certain conditions.
The remaining obligations already provided for in the Tax Benefits Statute remain in place, including the need for companies to make increases, above a certain amount, in the company’s average annual base salary and in the annual base salary of workers who earn a value lower than or equal to the company’s average annual base salary.
The minimum variation that serves as a reference for the increase is 4.7% for the year 2025.
At the moment, this is the reference set out in the legislation, but the annual value has been adjusted annually by the governments of António Costa (PS) and Luís Montenegro (PSD/CDS-PP) depending on the values agreed with the social partners in the tripartite agreements on wage appreciation and economic growth.
As the agreed reference for 2026 is 4.6%, below the 4.7% currently enshrined in article 19-B of the Tax Benefits Statute, the executive included in the State Budget law proposal for 2026 a change to the percentage, so that the minimum drops to 4.6% next year.
The amendment to the Tax Benefits Statute now promulgated by the President of the Republic was approved in parliament on October 17th, in a final global vote, with votes in favor of PSD, CDS-PP, Chega and IL. Livre, PCP and BE voted against. The PS, PAN and JPP abstained.
During the debate on the initiative in the specialty, on October 15, the Socialist Party bench proposed that companies, being released from having to reduce inequalities, would now have to provide information to the State about salary inequalities between workers. The objective of the measure was to encourage transparency, as a way of combating salary differences.
At the time, in the discussion in the Budget, Finance and Public Administration Committee, PS deputy Miguel Cabrita, who was Secretary of State for Labor in António Costa’s governments, recalled that Portugal is one of the countries “with the highest levels of inequality in Europe” and lamented that parliament let go of a “very consolidated concern” to combat inequalities.
The mechanism that the PS proposed was based on the reporting system that the State already has, not implying “any increase in bureaucratic work or time for companies”, the socialist deputy then explained.
The initiative was rejected by the PSD, CDS-PP and Chega.