Last October 2022, Regulation (EU) 2022/1854 was approved in response to increase of energy prices, resulting mainly from Russian aggression against Ukraine.

In this context, it was envisaged introduction of an exceptional and strictly temporary solidarity contribution for companies and permanent establishments operating in the crude oil, natural gas, coal and refinery sectors within the European Union, with the aim of mitigating the economic effects of high energy prices on the budgets of public authorities, end customers and businesses in all Member States.

It was stipulated that Member States should adopt and publish the measures implementing the mandatory temporary solidarity contribution by 31st December 2022.

In Portugal, was approved Law no. 24-B, of 30th December, which regulates Temporary Solidarity Contribution on the Energy sector (TSC Energy), but also introduces a Temporary Solidarity Contribution on the food distribution sector (TSC Food Distribution), the latter not foreseen in the European Regulation.

Law entered into force on 31st December 2022.

A. General Provisions

Contributions foreseen by the Portuguese law shall be settled by taxpayers, even if exempt, by means of filing a tax return, which official form is to be approved by Government Ordinance.

Such form must be submitted electronically before Portuguese Tax Authorities, by the 20th day of the 9th month following the end of fiscal year to which it relates (regardless of whether it is a business day or not).

Contributions must be paid until the last day of the 9th month following end of fiscal year.

In the case of failure to pay such contributions, default interest will be due. Infringements of the rules provided for in Law No. 24-B/2022 are subject to penalties foreseen in General Regime for Tax Offenses.

Both TSC Energy and TSC Food Distribution shall not be deductible for CIT purposes.

B. Objective Incidence

Both temporary solidarity contributions shall be applicable to excess profits earned in CIT fiscal years that begun in 2022 and 2023.

Excess profits shall be deemed to be the part of the taxable profits, determined under the terms of the CIT Code, that exceeds 20% increase in relation to average of taxable profits in four taxation periods beginning in the fiscal years 2018 to 2021.

In cases where the average of taxable profits in relation to the four previous fiscal years is negative, "it is considered that this average is equal to zero", being levied "on the totality of the taxable profit referring to the fiscal years beginning in 2022 and 2023". 

In both sectors, the solidarity contribution rate is of 33%.

C. TSC Energy

TSC Energy is applicable to Portuguese companies that carry out a commercial, industrial or agricultural activity, as well as to foreign companies with a permanent establishment in Portugal, that carry our activities in the crude oil, natural gas, coal, and refinery sectors.

Revenue obtained with the TSC Energy will be allocated to the following purposes: financial aid to final energy customers, in particular vulnerable families, to mitigate the effects of high energy prices; support to reduction of energy consumption; financial aid to develop energy autonomy and support to companies in energy-intensive sectors.

D. TSC Food Distribution

TSC Food Distribution is applicable to CIT taxpayers who carry out a commercial, industrial or agricultural activity, as well as by non-resident entities with a permanent establishment in Portuguese territory, who “operate establishments of food trade in products of animal and vegetable origin, fresh or frozen, processed or raw, in bulk or prepackaged".

Ministerial Order no. 312-E/2022, of 30th December, approved the Portuguese Classification of Economic Activities Codes of the Food Trading Establishments, subject to the TSC Food Distribution.

Companies with activity in the food retail or with a predominance of food products, during the fiscal year to which contribution refers, that does not represent more than 25% of the total annual turnover, are exempt from the TSC Food Distribution.

Micro, and small companies are not subject to this special taxation regime. However, micro, and small companies, which are subject to the special taxation regime for groups and where the turnover of the group is greater than € 100.000.000, are not excluded from TSC Food Distribution.

The revenue obtained with the TSC Food Distribution will be used for at least one of the following purposes: actions to support the increased cost of foodstuffs for the most vulnerable population; measures to ensure implementation of consumer protection policy with the aim of ensuring a high level of consumer protection; measures to finance micro and small commerce, , services and catering companies and their professionals particularly affected by the increase in operating costs and inflation and by decrease in demand.