With the aim of accelerating the energy and climate transition, the government is strengthening in 2023 the energy transition instruments, namely incentives for the production of renewable energy in self-consumption or by small production units, up to 1MW of installed capacity, creating an exclusion from IRS taxation up to the annual limit of 1,000 euros of income resulting from the transaction of surplus energy to the grid.
As we can read in the 2023 State Budget report, “Portugal has committed to achieving carbon neutrality by 2050, which will require an ambitious reduction in emissions and greenhouse gases (by 85% compared to 2005 emissions) and a carbon sequestration capacity of 13 million tons.”
To meet this goal, the Government will invest 2.1 billion euros in the energy transition in the coming year, which includes incentives for self-consumption and sale of surplus energy to the grid, and the gradual phasing out of exemptions from ISP.
Capitalization of companies
To stimulate the capitalization of companies, the Incentive for the Capitalization of Companies (ICE) will be created, which aims to merge and simplify the tax regimes currently covered by the Deduction for Retained and Reinvested Profits and the Conventional Remuneration of Share Capital. This measure is aimed at all companies and will have an annual budgetary cost of 120 million euros.
Therefore, there will be the possibility of deduction, at an annual rate of 4.5% and for ten years, of the amount of the net increases in the own funds of companies, which include the cash and in-kind entries made by the partners, the premiums for the issuance of shares, as well as the profits applied to transited results, to reserves or to the increase in the share capital. In the case of companies that qualify as micro, small, medium or small-medium capitalization (Small Mid Cap), that deduction rate is increased to 5%.
This deduction can be made up to the maximum of the following values: 2 million euros or 30% of EBITDA (the surplus, in relation to this latter value, may be deducted in the five subsequent years).
A universe of incentives
The initiatives presented in the 2023 State Budget are added to a wide range of support and incentives currently available to businesses. We have the famous Portugal 2020, still with some open applications in the area of Human Capital and Rural Development, and the new Portugal 2030 with a budget from the FEDER (European Regional Development Fund) – 11.5 billion euros. The PRR (Recovery and Resilience Plan) continues to be one of the most sought-after programs by businesses, especially among SMEs.
Now, this tray of “aid” emerges as a lifeline for businesses, especially after two years of the pandemic, the threat of political instability in Portugal, a war that threatens Europe and the future of society, and the growing inflation that is affecting the world economies. However, is it really worth submitting an application for incentives? How can you choose the applications that are best suited to the needs of your business? The answer to these two questions is simple: it is always worth submitting an application, provided that you first study the project you want to submit, without forgetting that these supports are just that, supports. After analyzing the needs of your organization, and assuming that your proposal meets the application requirements, or pre-application in the case of “Aid Requests”, then you can submit the application for the most suitable incentive.
Notices and Incentives Currently Active
If you are interested in applying for the support available to businesses, you can do so in 2022. Applications are open for the Productive Innovation Incentive System, for which beneficiaries are companies of any nature and under any legal form that propose to develop investment projects that meet the objectives set out in the scope of this measure.
Also within the scope of the Recovery and Resilience Plan (PRR), you can apply for the following notices:
- C05-i06.01 – Capitalização de empresas e resiliência financeira/Banco Português de Fomento/IAPMEI
- C06-i02: Compromisso Emprego Sustentável
- C13-i03: Eficiência energética em edifícios de serviços
- C16-i02: Transição Digital das Empresas
- C16-i03: Catalisação da Transição Digital das Empresas
The deadlines for these notices are coming to an end, so if you are planning to submit an application, don’t waste any time. All help is welcome, especially in the current context.
Now, if you still have any questions about these or any other supports from which you and your organization can benefit, please do not hesitate to contact us. You can also find more information on our website.