Therefore, according to decree-order no. 111-A/2011, dated 18 March 2011, the deductibility of tax losses assessed in previous years will require a certification from a Statutory Auditor (SA) whenever tax losses have been claimed as deductions in the previous two tax years. Only companies that are micro-entities and whose tax losses assessed in the previous two years are less than EUR 150,000 are exempt from this certification. For this specific purpose, micro-entities are companies that meet two of the three following criteria:
• a balance sheet total of not more than EUR 500,000;
• a net turnover of not more than EUR 500,000;
• not more than an average of 5 employees during the financial year.
The company in need of an SA in accordance with this decree will have to inform the Institute of the Statutory Auditors which will appoint an SA to be responsible for certifying the financial statements for the tax period in question and to attest to the reasonableness of the accumulated tax losses. Should the SA come to the conclusion that such accumulated losses are unreasonable, tax authorities may correct previous tax returns. The main purpose of this law is obviously to make fraud less appealing. Nonetheless, for those companies that are really facing economic and financial crisis it will also cost them more to prove it, as SA’s fees in Portugal are usually quite high. In a way, the law is putting an extra burden on the innocent in order to find the guilty.
Author: Fátima Gouveia, Ecovis Comark, Lda. Oporto, Porto, Portugal
www.ecovis.com
• a balance sheet total of not more than EUR 500,000;
• a net turnover of not more than EUR 500,000;
• not more than an average of 5 employees during the financial year.
The company in need of an SA in accordance with this decree will have to inform the Institute of the Statutory Auditors which will appoint an SA to be responsible for certifying the financial statements for the tax period in question and to attest to the reasonableness of the accumulated tax losses. Should the SA come to the conclusion that such accumulated losses are unreasonable, tax authorities may correct previous tax returns. The main purpose of this law is obviously to make fraud less appealing. Nonetheless, for those companies that are really facing economic and financial crisis it will also cost them more to prove it, as SA’s fees in Portugal are usually quite high. In a way, the law is putting an extra burden on the innocent in order to find the guilty.
Author: Fátima Gouveia, Ecovis Comark, Lda. Oporto, Porto, Portugal
www.ecovis.com
