Covid-19: Business support measures announced by the Government

The government announced a new package of exceptional measures to combat the new coronavirus in Portugal, taking into account the State of Emergency. Announcing a set of credit lines to support the treasury of companies in the total amount of 3,000 million euros, destined for the sectors most affected by the pandemic.

The 200 million euro credit line for the economy in general - which had already been announced last week, will be "reviewed and made more flexible" in terms of access, namely that there is no longer any reference to a drop in turnover in 20%.

These credit lines have a grace period until the end of the year and can be repaid in four years, said the Minister of Economy and Digital Transition, Pedro Siza Vieira.

Restaurants

For the catering and similar sectors, the executive creates a credit line of 600 million euros, of which 270 million euros are intended for micro and small companies.

According to data from the Ministry of Economy, 321 million euros will be directed to medium-sized companies and the small cap companies, and nine million to medium cap companies.

Per company, the maximum allocation will be 50 thousand euros for micro-enterprises, 500 thousand euros for small companies and 1.5 million euros for medium-sized companies, small and medium capitalization companies.

Tourism

For companies in the tourism sector, which include travel agencies, entertainment and event organization, a credit line in the amount of 200 million euros will be available in the coming days, of which 75 million euros for micro and small companies.

For medium-sized companies, with small-medium capitalization, 120.5 million euros will be available, and for medium-capitalized companies, 4.5 million euros.

Other companies in the tourism sector, including enterprises and tourist accommodation, will have 900 million euros available, of which 300 specifically for micro and small businesses.

According to data from the Ministry of Economy, the remaining 600 million euros will be allocated to medium-sized companies, small and mid-cap companies and mid-cap companies.

For all tourism companies, the maximum allocation will be 50 thousand euros for micro and small companies, 500 thousand euros for medium-sized companies and small-medium capitalization, and 1.5 million euros for medium-capitalization companies.

Industry

In the industry, in particular textiles, clothing, footwear, the extractive industry and the wood sector, Siza Vieira announced a line of 1,300 million, of which 400 million euros were destined for micro and small companies.

The remaining 900 million euros will go to medium-sized companies, with small-medium and medium capitalization.

Per company, the maximum allocation will be 50 thousand euros for micro-enterprises, 500 thousand euros for small companies and 1.5 million euros for medium-sized companies, 'small mid cap' and 'mid cap'.

Bank measures

The companies will have access to a moratorium, granted by the bank, in the payment of capital and interest, according to what was announced today by the Minister of Finance, and which is being worked on between Banco de Portugal (BdP – Bank of Portugal) and the banking sector.

Mário Centeno said that "a moratorium on capital and interest is being built, in a work that is being developed between Banco de Portugal and the banking system, in particular with APB (Portuguese Bank Association)".

The minister assured that "all the legislation that is necessary to implement this moratorium will be approved by the end of the month and will move forward effectively".

Mário Centeno also stated that in addition to the exemption from the payment of commissions by merchants on automatic payment terminals.

Social contributions reduced to a third in March, April and May

The Government announced today that the contributions of companies to Social Security will be reduced to one third in March, April and May, "in order to preserve employment", with the remaining amount for April, May and June being settled from the third quarter, and immediate access is granted to companies with up to 50 jobs.

According to the government official, this measure does not affect the companies' willingness to proceed with the usual payment.

Companies that have up to 250 jobs, on the other hand, can only access this contribution reduction mechanism in the 2nd quarter, if they have seen a drop in turnover equal to or greater than 20%.

Flexibility in the payment of taxes

The Government decided to make the payment of taxes more flexible for companies and self-employed workers (VAT, in the monthly and quarterly regimes, and delivery of withholding taxes at the source of IRS and IRC), in the second quarter of this year.

On the due date of the payment obligation, if companies or independent workers are unable to do so immediately, it can be accomplished in three monthly installments without interest, or in six, in this case with the application of interest on arrears only in the last three months.

This mechanism only applies to companies or independent workers with a turnover of up to 10 million euros in 2018, or starting from January 1st, 2019, and the remaining companies can request this support if the volume of work has decreased at least 20% in the last three months, compared to the same period last year.

The Government also decided to suspend the tax or contributory enforcement proceedings that are ongoing or have been initiated by the respective authorities for three months.

Siza Vieira recalled the support to companies already announced at the level of community funds, such as the payment of the incentives provided for in Portugal 2020 to be made in the shortest possible time, as an advance, if necessary or the 12-month moratorium on the amortization of refundable subsidies within the framework of the NSRF and PT2020, which expire until 30th September.

In this light, Mário Centeno said that the possibility of constituting a moratorium on capital and interest is being studied at Banco de Portugal and at the banks. "All legislation that is necessary to implement this moratorium will be approved by the end of the month", guaranteed the Minister of Finance.