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Laws no. 32/2024, 33/2024, 34/2024 and 36/2024, of August 7th – Amendments to the Personal Income Tax Code (CIRS)

As published in the Official Gazette today, Laws no. 32/2024, 33/2024, 34/2024 and 36/2024, of August 7th, have approved a set of new tax measurements that further amended the personal income tax code, which was last revised in June of this year.The most relevant measures within the scope of these legislative changes are as follows:

  1. The amount of €4.104,00 (four thousand and one hundred and four euros) deductible from the gross income of Category A (employment income) and Category H (pensions) will be updated annually based on the IAS (i.e. social support reference index) adjustment rate. For 2024, the IAS is set at €509,26, with the adjustment rate of 6%.
  2.  The IRS tax brackets defined in Article 68.º of the CIRS are updated by Law no.33/2024, of August 7th;
  3. A new Article 68.º-B is added to the Personal Income Tax Code (CIRS) determines that, and unless a legislative act determines otherwise, the amounts for the lower and upper limits of the taxable income brackets defined in Article 68.º paragraph 1, will be updated each year.
  4. This update will be conducted by the application the variation rates of the GDP (i.e. Gross domestic product) deflator and GDP per worker to the aforementioned tax bracket limits. These rates will be calculated using data published by the National Institute of Statistics (INE) in the third quarter of the year before the State Budget Law takes effect. The aforementioned rates will be published by an Administrative Ordinance until September 20th of the fiscal year to which they apply.
  5. Regarding the specific deduction for expenses with real estate (i.e. pertaining to rental agreements) the limit is now increased to €800,00 (eight hundred euros). However, this deduction increase will be implemented gradually, as follows:

-50% in 2025;

– 75% in 2026;

– 100% in 2027;

The aforementioned tax measurements approved by Laws no. 32/2024, 33/2024, 34/2024 and 36/2024, of August 7th will entry into force on the day following their publication in the Official Gazette, which is August 8th, 2024.

For more information, please contact us at jcg@ccsllegal.com

[Photo by: Christin Hume, available at unsplash.com]

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