The double exemption is guaranteed in the form of profit distribution in the event that companies structurally increase salaries by at least 5%.

“In 2024, in addition to what already exists in Social Security [TSU exemption], dividends [or bonuses] will be exempt from IRS for workers, excluding shareholders”, the Minister of Labour, Ana Mendes, told Jornal de Negócios Godinho, clarifying that this tax regime applies to payments made in 2024, based on profits from 2023.

The announcement is based on the agreement signed this weekend, in which the Executive undertakes to approve a “fiscal incentive, in 2024, in terms of IRS, applicable to workers' participation in profits, through companies' balance sheet bonuses, up to the limit of one basic monthly salary earned by the worker and a maximum of five minimum wages, provided that the employer has, in 2024, increased the salary to the universe of workers”.

Another novelty of the so-called Reinforcement of the Medium-Term Agreement to Improve Income, Wages and Competitiveness is that the tax transparency regime will also be applied to “companies without autonomous economic activity”. The intention must be implemented, in legal terms, with the State Budget proposal for 2024, changing a regime that had not been modified since 2014. Instead of paying IRC on the profits, these are imputed to the partners, who will have to pay IRS, with higher rates.