Portugal Approves 2016 Solidarity Surcharge Tax Changes

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By Jared Mondschein

Jan. 11—Portugal has enacted new solidarity surcharge rates and thresholds effective immediately for 2016, the Ministry of Finance said in a news release Jan. 7.

The solidarity surcharge was previously only applicable on income greater than the highest tax bracket but all income greater than 801 euros per month ($875) is subject to a solidarity surcharge under the new laws.

Under the approved legislation for 2016, the monthly surcharge rates for individuals are:

• Zero for income less than 801 euros ($875)

• 1 percent on income between 801 euros and 1,683 euros ($1,839)

• 1.75 percent on income between 1,683 euros and 3,054 euros ($3,338)

• 3 percent on income between 3,054 euros and 5,786 euros ($6,324)

• 3.5 percent on all income greater than 5,786 euros.

Previously, the solidarity surcharge rates were 2.5 percent for annual individual income between 80,000 euros ($87,451) and 250,000 euros ($273,285) and 5 percent on annual income exceeding 250,000 euros.

Portugal's standard income tax rates and thresholds for 2016 have yet to be announced.

To contact the reporter on this story: Jared Mondschein at jmondschein@bna.com

To contact the editor responsible for this story: Michael Baer at mbaer@bna.com

The approved rates for 2016 are available in Portuguese at http://www.portugal.gov.pt/pt/ministerios/mf/noticias/20160107-mf-irs.aspx.

More information on payroll issues in Portugal can be found in the Portugal country primer. 

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