Flash News NA 2025/05/22
Municipal Surtax in Model 22: How to calculate for companies with establishments in different Portuguese cities?
Modelo 22 is one of the key tax obligations for companies in Portugal and includes the assessment of Corporate Income Tax (IRC) and its related surcharges. Among these, the municipal surtax (derrama) is particularly relevant for companies with operations in multiple municipalities. This article clearly explains how to calculate this surtax, based on legal principles and the proper completion of the tax return.
1. What is the Municipal Surtax?
The municipal surtax is an additional tax to the IRC, the revenue of which goes to local municipalities. Each municipality can set a rate up to a legal limit (currently 1.5% for the general surtax), applied to the taxable profit subject and not exempt from IRC.
There is also a reduced surtax applicable to companies with turnover under €150,000, depending on the municipality’s decision.
2. Companies with Establishments in Several Municipalities
When a company has permanent establishments in more than one municipality, the surtax must be calculated proportionally, based on the net added value (VAL) generated by each establishment.
3. How to calculate the surtax based on VAL?
Steps:
1. Determine the VAL of each establishment.
2. Calculate the percentage each represents of the company’s total VAL.
3. Apply the municipal surtax rate to the total taxable profit, weighted by each municipality’s share.
Example:
• Lisbon: VAL = €60,000
• Porto: VAL = €40,000
• Total VAL = €100,000
• Company profit = €200,000
• Lisbon Rate: 1.5%, Porto Rate: 1.0%
Calculation:
• Lisbon: 60% of €200,000 = €120,000 → 1.5% = €1,800
• Porto: 40% of €200,000 = €80,000 → 1.0% = €800
Total Surtax: €2,600
4. Where to declare in Model 22?
This allocation is made in Table 10 of Model 22 and annex A, stating:
• Attributed profit per municipality;
• Applicable rate;
• Calculated surtax.
Internal documentation must be solid and justifiable, especially regarding VAL per establishment and allocation criteria.
Correctly calculating the municipal surtax in Model 22 requires a sound understanding of tax law and structured internal accounting. The proportional approach ensures fair and lawful taxation, avoiding fiscal risks.
How can NOMINAUREA help?
NOMINAUREA provides expert fiscal and accounting support in completing Model 22, correctly applying the municipal surtax, and offering tailored tax planning, ensuring full legal compliance.
