Introduces fiscal measures to promote growth and improve the business environment

30 Dec 2022

The Government introduced changes to the Corporate Income Tax Code through Law 20/2022, gazetted on 30 December 2022. The law includes the following fiscal incentive measures: - Reduction of the corporate tax rate for agriculture, aquaculture and urban transport from 32% to 10%; - Reduction of the withholding tax rate from 20% to 10% on payments to foreign entities providing services to national agricultural companies; - Elimination of the withholding tax on interest from external financing for agricultural projects; and creation, within the next three years, of tax incentives for new investments in the agriculture, agro-processing, manufacturing, tourism and urban transport sectors through accelerated depreciation (for half of the useful life) for investments made in facilities and equipment related to the company’s production activity, provided it creates at least 20 permanent jobs.

The changes occurred within the context of the Economic Acceleration Stimulus Package announced by the Government on 9 August 2022.

The amendment entered into force on 1 January 2023 and will remain valid until 31 December 2025.