Companies that increase salaries by at least 5% next year can grant employees an amount of up to approximately 4,100 euros as profit sharing, exempt from IRS, according to the OE2024 proposal.
The measure, which was already planned to strengthen the medium-term agreement to improve incomes, signed on Saturday with some social partners, is included in the bill for the 2024 state budget (OE2024), which was introduced in parliament on Tuesday.
“They are IRS exempt up to a limit of five times the RMMG [Remuneração Mínima Mensal Garantida]the amounts attributed to employees as a share of the company’s profits, through balance sheet bonuses, paid by entities whose average nominal value of fixed compensation per employee in 2024 is equal to or greater than 5%”can be read in the cabinet proposal.
According to the document, exempt income “are included in determining the rate applicable to other income”.
The OE2024 proposal also provides for a tax incentive for employee housing.
“Work income in kind arising from the use of a permanent residence located in the national territory, provided by the employer (…), referring to the period between January 1, 2024 and December 31, 2026, is exempt from IRS and social security contributions”according to the budget proposal.
In this case, exemption from IRS and social security contributions “applicable up to the limit of the rental prices provided for in the Rental Support Program”.
As a rule, subsistence allowances or equivalent facilities or the use of housing provided by the employer are considered as dependent labor income for employees, for which IRS and social security contributions must be paid, but with the measure now envisaged there may be an exemption from IRS and social security contributions for employees. employees under the conditions already mentioned or exemption from social security contributions and acceleration of the tax depreciation of the transferred properties, in the case of the company.
The budgetary impact of this measure is estimated at two million euros, according to the report accompanying the OE2024 proposal.
This Tuesday, the government presented the 2024 state budget (OE2024), which revises gross domestic product (GDP) growth upwards from 1.8% to 2.2% in 2023, and downwards from 2.0% to 1.5% next year.
The unemployment rate is being revised upwards for next year and is now expected to reach 6.7% in 2024, up from the previous 6.4%.
On inflation, the executive is slightly more pessimistic, forecasting inflation to fall from 8.1% in 2022 to 5.3% in 2023 and 3.3% in 2024.
The proposed law also provides for the best budget balance in a democracy, at 0.8% of GDP in 2023 and 0.2% in 2024.
Source: DN
