Income from Portuguese capital, such as interest or dividends, is not included in the calculation of the tenant’s total profit, in the calculation for the granting of rent support, according to the internal order of the Ministry of Finance, which contradicts the statements of the minister of custody, Fernando Medina, pronounced this Wednesday in parliament. This means that anyone who received, say, $1 million in interest, but has an annual gross income of less than $38,632 to the IRS, the cap set for access to the measure, is eligible for the grant.
To justify the correctness of the interpretative standard of the government decree, which ordered a reduction in aid, by taking into account not only the taxable amount, as stated in the diploma, but also gross revenues and those subject to special rates such as alimony or property income, Fernando Medina will have made a mistake in going against the order exactly: “Would you admit that income that is not declarable, which is taxed separately against withholding tax, could benefit from the support? Is it permissible that at the border, someone who receives a million euros in income from property or through dividends or interest should benefit from this support? Our interpretation is that no, because all income must be taken into account” .
“The Treasury Secretary was technically incorrect in parliament when mixing property income, subject to special rates, and interest and dividends from the national market and which are not even included in the IRS return,” underlines tax official Luís Leon to DN / Dinheiro Vivo. The co-founder of the consultancy Ilya explained that “income from national capital markets is taxed at the withholding rate, typically 28%”. Now, in determining the income to be determined, the order refers to gross mass plus income from special rates, without mentioning those subject to withholding tax. “And this is because the designation of liberating means that it exempts the taxpayer from recording that income in the IRS return, unless it comes from foreign capital markets and then they already have to be taxed at the special rates,” explains Luís . Leon.
Medina revealed that he was aware of the shipment and that he agreed to the procedure. But now the PS proposal has to support the legality of the interpretive standard.
Therefore, “the government’s decision does not introduce justice,” he summarizes. Because those who earn a million euros in interest may even be entitled to the maximum monthly support of 200 euros, while a divorced mother with two dependent daughters saw the subsidy fall sharply from 200 euros a month to 44.88 euros, as the tax authorities took into account not only the gross income, but also alimony, which was not included because it was already taxed at the autonomous rate of 20%.
The inspector also raises the hypothesis that the Tax and Customs Administration (AT) does indeed look at profits that are subject to withholding tax. “But in that case, the services would violate the financial transmission.” On the other hand, since this income is not included in the IRS return, “the AT would have to go through the tenants’ tax number through all banks and financial institutions, which have an obligation to pass on the payment.” of this kind of income through the model 39″, he points out.
And the proposed amendment to the decree-law, submitted by the PS to parliament, to include the same interpretation as the order and thus circumvent the illegality of the financial rule will not solve the problem. Once again, assets taxed at the withholding rate are excluded.
Fernando Medina revealed yesterday at a hearing in the parliamentary budget and finance committee that he was familiar with the standard, having agreed to the procedure: “I was aware of the message before it was drafted and I agreed to it . will not revoke the transmission”. “How many tax decrees have interpretive orders? This is no exception, it is a natural framework for the operation of our form of execution. All income must be accounted for,” he defended.
However, it acknowledged the existence of legal doubts. For this reason, it relies on “the PS initiative, insofar as it is approved, which will clear all doubts”. “Given the doubts, the option of the PS, and which the government supports and supports, the possibility is that this clarification is done through legal means,” he stressed.
The PSD bank asked the minister whether the cabinet intends to reduce the costs of the measure, which amounted to 240 million euros, with the order. “How much has it captivated? Nothing,” Medina replied. It is recalled that, insofar as the DN/DV has determined, if the executive has complied with the rules for the application of the subsidy, taking into account the taxable amount, already after the amortization of the specific deduction of EUR 4104 and without the income from alimony and income from renting real estate, the expenditure for this support would fall to a billion euros, which is four times more than expected.
To support the government’s contention, Medina stated the government’s projections: “When the government announced the aid, it estimated that 150,000 families would benefit from the aid and now that number is 186,000. The estimated cost was 250 million euros and now stand at 240. million euros”. In the end, however, he admitted that “tens of thousands” of taxpayers had been excluded because they had “income in excess of assets or resources not accounted for.”
Source: DN
