Updates from the Law Converting the Advance Payments Decree

News Flash No. 1/2024

On December 17, 2023, Law No. 191, converting Decree-Law No. 145/23 (known as the “Advance Payments Decree”), entered into force.

Here is a summary of the main changes regarding labor matters:

Fringe Benefits on Loans Granted to Employees

We wish to focus particular attention on the amendment to tax legislation regarding loans granted by employers to employees, given the significant burden that the previous legislation placed on employees as a result of the sudden increase in reference rates implemented by the ECB over the past year.

In Article 3 of Decree No. 145/23, paragraph 3-bis was added after paragraph 3, amending Article 51, paragraph 4, subparagraph b) of the TUIR; accordingly, in the case of loans granted to employees, “50% of the difference between the amount of interest calculated at the official reference rate in effect on the due date of each installment or, for fixed-rate loans, on the date the loan was granted, and the amount of interest at the rate applied to such loans.”

Consequently, when calculating any fringe benefits:

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