The government is relaxing the criteria for granting the IRC premium, which provides for a 50% increase in wage costs. In practice, more companies will be able to receive this bonus, but only in 2024, for one year, since the manager temporarily drops the rule that obliges to register the wage increase of at least minus 4.8% in the Collective Regulation Instruments (IRCT) %, what is forecast for next year, according to the multi-year agreement to improve yields.
“In 2024, it is possible that dynamic IRCT, i.e. with less than three years, will not be aligned with the increase of at least 4.8%, even if wage increases are higher. In this sense, we are open to a solution, in 2024, which also includes these companies,” revealed yesterday the Secretary of State for Labor, Miguel Fontes, after leaving a social consultation meeting, which included the status of the income agreement.
It is a temporary measure, “only for one year”, the official explained, which aims to protect situations in which companies meet all criteria, such as dynamic collective bargaining, wage increases even higher than the minimum set by the pact and reduction in the range between the highest and lowest salaries, but which were later eventually left out of the benchmark simply because the collective agreement did not define the amount of the salary increase or set a value lower than the actual value.
Miguel Fontes acknowledged that “it was not possible to maintain this interpretation in 2023, but the government will now improve the wording and address situations that were not foreseen”. Earlier, the president of CIP – Confederação Empresarial de Portugal, Armindo Monteiro, had already expressed the executive’s intention in the face of complaints from employers: “It was found that companies, even if they have applied salary increases and the collective bargaining in force, but whoever did not mention the amount of the increase, in the end could not benefit from the aid. That is why the government proposes to rectify this situation. In 2024, they are committed to finding tools to reach the minimum increase”, which will then be year will be 4.8%, said the leader of the employers’ federation
Armindo Monteiro explained that “the hiring is multi-year and there was no reference before the mid-term agreement”, of a minimum salary increase of 5.1% for this year, “with the companies applying wage increases anyway but ultimately not benefiting from the stimulus “. Therefore, “the government has committed to correct this”. “Many companies, even if they comply with the increase or even more, because the average salary increase is 8.1%, will not have this tax break. The government acknowledged a certain “weirdness in this situation”.
By dropping the requirement that the salary increase be worked out in collective agreements, the “government will have to find other tools to verify which increase is being applied, without violating the General Data Protection Regulation” (RGPD), stressed Armindo Monteiro, who said not knowing what mechanisms the executive might use. The Secretary of State for Labor also did not want to go into detail on how government services would verify the real increase, referring only to “the measure will be studied in social consultation”.
With this qualification, it means that more companies will be entitled to the tax benefit, but only in 2024. Companies will therefore only be able to effectively benefit from the incentive in 2025, at the time of settlement of the tax.
There will be another flexibility in the first two years of the measure, in 2023 and 2024, as they will be considered as extension regulations, which are instruments that automatically extend the rules of a given collective bargaining agreement to employers and employees who are not parties at the agreement. This, “because there are many companies that did not even know that raising wages would not be enough,” justifies Miguel Fontes. But then the rules get stricter. “It has already been determined that for 2025 and 2026 this aid will only be granted if the increases are the result of collective bargaining”, that is to say, renewal regulations no longer count and only collective agreements apply.
While the minister underlined the positive balance of the implementation of the agreement, pointing out that “76% of the measures have already been applied or are in the implementation phase,” said the President of the Confederation of Trade and Services of Portugal (CCP), João Vieira Lopes, preferred to indicate what still needs to be implemented: “The measure that allows non-profit organizations to deduct VAT on PRR projects has not yet been implemented [Plano de Recuperação e Resiliência]; also the promised incentive for scrapping old cars has yet to materialise, but the government will schedule a consultation with ACAP [Associação Automóvel de Portugal] to present a proposal later this month”.
Salomé Pinto is a journalist for Dinheiro Vivo
Source: DN
