The recent publication, on May 27, 2024, of Circular 20270/2024, introduces a new municipal surtax rate table, marks an important step forward in the attempt to achieve greater tax justice and balanced regional development in Portugal. This measure aims to adjust the surtax rates, a municipal tax levied on company profits, based on the economic capacity and specific needs of each municipality. The goal is to promote tax equity and the financial sustainability of local administrations.

One of the main advantages will be the promotion of regional competitiveness. Municipalities that previously struggled to attract companies due to high surtax rates will now be able to offer more favourable tax conditions. This measure will not only encourage the creation of new businesses and the expansion of existing ones but also contribute to the creation of local jobs and the increase of municipal revenue through other forms of taxation and economic activity.

Additionally, the revision of the municipal surtax rates also aims to increase transparency and efficiency in tax collection. With a clearer structure adapted to local economic realities, municipalities will be able to better plan their budgets and allocate resources more efficiently for essential public services, infrastructure, and community development projects. Likewise, companies will be able to better define their implementation and expansion strategies.

In summary, Circular 20270/2024 represents a significant step towards a more equitable distribution of municipal tax burdens and the strengthening of local economies. If implemented carefully and accompanied by monitoring and support measures, this new municipal surtax rate table could be a powerful tool to promote balanced regional development and tax justice in Portugal.

The Tax Law Department of Belzuz Abogados, S.L.P. in Portugal is available to analyse and help you to define the best strategy for your business.

 Miguel Paixão

Fiscal and Tax Law department | (Portugal)

Belzuz Abogados SLP

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