According to the proposal of the National Budget 2023 (OE2023), the minimum livelihood, i.e. the level up to which income is exempt from IRS, will no longer be linked to the national minimum wage from 2024. This means that in two years’ time, those who receive the minimum wage, which must be 810 euros, will pay tax.
According to the OE2023 proposal, “the minimum subsistence reference value is equal to the highest between 10 640 and 1.5 x 14 x Social Support Index (IAS)” which will increase by 35.5 euros to 4787.7 euros in 2023 . That is, this level will be equal to the larger of the two values: either 10,640 euros, which in 2023 is equivalent to 14 times the minimum wage of 760 euros, or 10,052.7 euros (1.5 x 14 x IAS) . With this new formula, employees with the minimum wage will remain exempt in 2023, but in 2024, when the minimum wage reaches 810 euros, they will already have to pay tax, as the gross annual salary will be 11,340 euros, 700 euros higher than the highest value of the minimum livelihood: 10 640 euros.
The current IRS code includes a guarantee that guarantees situations where the minimum wage overlaps with the IAS: “The value of the income after taxes referred to in paragraph 1 cannot be less than the annual value of the minimum wage monthly per holder. salary”. However, this clause disappears in the wording of the SO2023 proposal.
The Secretary of State for Taxation, António Mendonça Mendes, said Monday during the presentation of OE2023 that “although the minimum is a fixed amount, it is being updated in accordance with the IAS”. “While a fixed value was placed, it was not updated and, despite the de-indexation of the minimum wage, its evolution will be according to the IAS”.
To figure out how much minimum wage workers will pay IRS from 2024, the new minimum subsistence mechanism will also need to be taken into account, which will become a type of deduction that will be deducted from tax before filing for taxable income. . This discount will significantly reduce the IRS these employees would have to pay if the previous regime were maintained.
Salomé Pinto is a journalist for Dinheiro Vivo
Source: DN
