Object: WORKERS’ CONTRIBUTION EXEMPTION FOR THE YEAR 2023

It is well known the maneuver that the Legislature, during the year 2022, put in place to go to mitigate on workers, albeit minimally, the effects of the so-called tax and contribution wedge. This maneuver had been set up by going to provide for a percentage reduction in the employee’s contribution. This relief had been operated, in fact, in 2 quite distinct moments, which divided the first and second semesters of 2022 as follows:

• 0.80% reduction in the employee’s contribution, valid for the first half of 2022 (it was initially provided for the entire year, but the provision was modified as in the next point), only for workers with a monthly taxable income, for contribution purposes, not exceeding 2,692 euros, plus, for the accrual of the month of December, the accrual of the 13th month;
• Contribution reduction of 2% (0.80% + 1.20%), valid for the second half of 2022, for individuals with the same income requirements as in the previous point, including the 13th month’s pay or related accruals paid in the various pay periods.

With the recent Budget Law, the Legislature continued its effort to cut the wedge, going on to provide, for the entire year 2023, 2 distinct types of intervention:

1. The same situation of relief as in 2022 (2% reduction) is re-proposed, again for individuals with a monthly taxable income for contribution purposes not exceeding 2,692 euros, for the entire year 2023;
2. In addition, again for the year 2023, the employee’s contribution reduction is increased to 3%, for those workers who have a monthly taxable income for contribution purposes not exceeding 1,923 euros, increased, for the accrual of the month of December, by the accrual of the 13th month.

Object: FUEL BONUS 2023

Decree-Law No. 5 of Jan. 14, 2023, on urgent provisions on transparency of fuel prices and strengthening the monitoring powers of the Price Supervisory Authority, as well as support for the enjoyment of public transport, was published in Official Gazette No. 11/2023.

In the first version (Council of Ministers No. 15/2023), it was envisaged that the provision would apply only in the period January-March 2023, but amendments were made (Council of Ministers No. 16/2023) and the deadline by which the value of gasoline vouchers given by private employers to employees, within the limit of 200 euros per employee, will not contribute to the formation of employee income was extended to December 31, 2023.

Specifically, the provision stipulates that, without prejudice to the provisions of Article 51, paragraph 3, third sentence, Tuir, on fringe benefits (258.23 euros annually in 2023), the value of gasoline vouchers or similar fuel purchase bonds transferred by private employers to employees, in the period from January 1 to December 31, 2023, does not contribute to the formation of the employee’s income, if the amount does not exceed 200 euros per worker.

Pending any official instructions, those provided by the Internal Revenue Service in Circular No. 27/E/2022 could be considered valid, given the similarity with the relief already provided for last year by Decree Law 21/2022, indicating in the payroll this disbursement separately from fringe benefits, also for the purpose of inclusion in the CU.

The firm remains available for any further clarification.
Best Regards.