What are Tax Benefits?
Understand in a simple way what tax benefits are, how they are organized and the impact they aim to achieve in our economy.
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- What are Tax Benefits? Section containing graph.
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- Would you like to know more information about the State Budget? cards
- Importance of Tax Benefits and their impact on the economy? Section containing graph.
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- Disclosure of data relating to Tax Benefits Section containing graph.
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What are Tax Benefits?
Tax benefits are incentives used by the State to achieve economic, social, cultural and environmental goals, promoting behaviors that are beneficial to society, such as social justice, sustainable development and reduction of inequalities.
Through tax reductions, exemptions or deductions, tax benefits encourage practices that generate positive impacts for society as a whole.
They can be assigned automatically, when they result directly and immediately from the law in force. Others depend on a formal request by the interested parties.
They can be structural when designed to have a long-term effect on the economy and society. While temporary ones are solutions implemented to address specific and relevant situations.
Importance of Tax Benefits and their impact on the economy?
In Portugal, the tax system is a set of taxes that allows the financing of the needs of the State and society.
The amounts collected through taxes, fees, contributions, among others, generate public revenue that allows financing investments and public expenses, with a view to meeting the needs of citizens.
Tax benefits, when allocated, constitute an indirect form of public expenditure, since by granting these incentives, the State gives up the corresponding tax revenue.
Tax System
The tax system is a structured set of taxes, created with the purpose of achieving fundamental objectives for society.
Tax Revenue
It is the amount collected by the State through taxes
These are the most relevant taxes:
IVA - Value Added Tax
IRS - Personal Income Tax
IRC - Corporate Income Tax
IMI - Municipal Property Tax
IMT - Municipal Property Transfer Tax
ISV - Vehicle Tax
IUC - Single Tax Circulation
ISP - Tax on Petroleum and Energy Products
IT - Tobacco Tax
IABA - Tax on Alcohol and Alcoholic Beverages
IS - Stamp Duty
The main areas where taxes are levied:
Income
Consumption
Property
Strategic Investments
Incentives for economic, social and environmental development
They can be applied in different ways, depending on the objective and the tax context:
Tax exemption
Federal Revenue Deduction
Tax deduction
Taxation Deferral
Preferential Tax Rate
Tax benefits play a crucial role in promoting the common good. Used as public policy instruments, they contribute to achieving economic, social and environmental objectives. These objectives, known as extra-fiscal, promote fairer and more sustainable economic development, benefiting the whole society.
Extra-fiscal objectives are reflected in several areas:
Economic issues
Defense
Public order and security
General services of the Public Administration
Environmental protection
Health
Housing and collective development services
Recreational, cultural and religious services
Education
Social protection
International relations
Artistic creation
State Budget and Tax Benefits
The State Budget is the document that plans and forecasts all the State's expenses and revenues to be executed in the following year and where the tax expenditure related to tax benefits is reflected.
Adjustments and analysis for economic development
When preparing the annual policy plan, the State must adjust the tax benefits, reflecting the political and economic priorities of the moment. It is essential to continue monitoring and evaluating the application of tax benefits, in order to ensure that the impact about society maintains relevance.
Want to know more information about the State Budget?
Adjustments and analysis for economic development
When preparing the annual policy plan, the State must adjust the tax benefits, reflecting the political and economic priorities of the moment. It is essential to continue monitoring and evaluating the application of tax benefits, in order to ensure that the impact about society maintains relevance.
Disclosure of data relating to Tax Benefits
For detailed information on tax benefits, please consult the Finance Portal.
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