The new IRS withholding tables will only be reflected in pensions paid by Caixa Geral de Aposentações (CGA) from October, similar to Social Security pensions, the Labor Ministry said Wednesday.
“The process in CGA meets the same conditions as ISS. [Instituto da Segurança Social]” he said in response to Luce, an official source in the ministry supervised by Maria do Rosario Palma Ramalho.
Therefore, and given that the pensions in question have already been processed, the new IRS withholding rates will not apply to pensions that arrive in retirees’ accounts in September, but rather beginning in October.
The government has decided to change the income tax tables to take into account a number of changes to the IRS approved by Parliament, which include reductions in the rates applicable to the first six IRS tiers, as well as changes to specific deductions and subsistence minimums.
The order on the new withholding rates was published in the Diário da República on Tuesday and includes two types of tables: one with lower rates that will apply in September and October, and another from November.
The mechanism, designed for September and October, is aimed at compensating workers and retirees for additional taxes withheld between January and August in light of new IRS rules (rates, special deductions, and minimum income levels) approved at that time.
This is precisely what justifies the fact that for income up to a certain amount (€1,171 gross for single or married workers, two holders or €1,202 for single or married pensioners, two holders) the withholding rate is 0% in the tables that will apply in September and October.
However, the order takes into account situations where the publication of new tables may not arrive in time for application by all entities responsible for the payment of wages and pensions.
Thus, “in situations where the withholding of taxes on income from dependent employment and pensions paid or provided in the period from September 1 to October 31, 2024, was not made in accordance with the tables provided for in paragraph 2 [as aplicáveis em setembro e outubro]”the entity that is subject to the withholding obligation may correct the withholdings that must be made in the following months, up to and including December 2024,” stated the order signed by the Minister of Tax Affairs, Claudia Reis Duarte.
With respect to pensions paid by ISS, the Department of Labor has already announced that the “new tables” of IRS withholdings will apply in October and that “in November and December, the new tables provided for in paragraphs c) and d) No. 1 of the same order will apply.”
“The corrections caused by the non-application of the new pension table in September will be carried out until December inclusive,” the same official source added.
The application of the tables will be the same as for pensions paid by the CGA.
According to the calendar available on the CGA website, September pensions are paid on the 19th.
Author: Lusa
Source: CM Jornal
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