The President of the Republic enacted the parliamentary decree on Monday, 4 May, based on a Government proposal, which reduces the VAT applied to the purchase of respiratory protection masks and disinfectant gel to the reduced rate.
According to the ordinance published in Diário da República (DR), “with temporary effects, the exemption from value added tax (VAT) is enshrined for intra-Community transfers and acquisitions of goods necessary to combat the effects of the outbreak of covid-19 by the State and other public bodies or by non-profit organizations”.
The distribution will be made free of charge by the entities to people infected by the covid-19 outbreak or exposed to this risk, as well as to people who participate in the fight against the disease.
All transfers and purchases of that material that are purchased by the State, the autonomous regions or local authorities, as well as any of its services, establishments and bodies, even if personalised, including public institutes, will also be exempt from VAT.
The exemption also includes “health establishments and units that are part of the National Health Service (SNS), including those that take the legal form of public business entities, other establishments and health units in the private or social sector, as long as they are included in the plan national SNS system to combat covid-19, having this obligation contracted with the Ministry of Health, and identified in a list to be approved by order of Government members responsible for the areas of finance, health and labour, solidarity and social security”.
According to the decree, the exemption is also for “entities with charitable or philanthropic purposes, previously approved for the purpose and identified in a list to be approved by order of the Government members responsible for the areas of finance, health and labour, solidarity and social security”.
It is also determined in the ordinance, with temporary effects, the application of the reduced VAT rate to imports, transfers and intra-Community purchases of protective masks and disinfectant gel.
“They are subject to the reduced VAT rate (…), depending on the place where they are made, imports, transmissions and intra-community acquisitions” of respiratory protection masks and skin disinfectant gel with the specifics contained in the order of the Government members responsible for the areas of economy, finance and health.
Also subject to the reduced VAT rate are “credit insurance, financial credits, surety bond and investment insurance, up to a limit of 3,000,000,000 (euro)”.