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Paula Franco: “The Fifteenth Month May Gone” – IRS

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“This adjustment in the tax withheld in the pockets of the Portuguese on a daily basis, in the month of salary, is very positive, but it is important to draw attention to this: what was mostly the 15th month I had and with what was accounted for the extra expenses, may be gone.” The warning is from Paula Franco, president of the Association of Certified Public Accountants, in an interview with Negócios and Antena 1 that will be published in full on Monday.

The idea, by the way, is that the payment practically “ceases to exist” and the tax withheld over the course of the year “gets much closer to what is actually due”, and “it is important that the Portuguese realize this, because they are leaving having to rely on forced savings”, Paola Franco confirms.

Remember, the IRS withholding schedules were updated for the first six months of the year, but as of July they will be replaced by a new model, with progressive mechanisms that will adjust the IRS withholding much more to the realities of each taxpayer. These new schedules, also published in Diário da República, are “more equitable, they are progressive, they reflect more progressiveness,” in that they “use marginal rates just like final tax rates, a situation that the current retention does not reflect,” explains the specialist.

However, he concedes that taxpayers will “have a harder time knowing whether they want to know what their effective rate will be before or in the face of an increase.” The payment receipt itself is expected to contain clear information about the effective IRS rate, “but when a worker wants to know how much they will withhold and anticipates that expectation, they will have a harder time.” In this sense, Paola Franco makes a proposal to the government: “This measure, starting from July, would be very good to follow with a good simulation to be made available on the website of the Tax Authority”.

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