The proposal to amend the Government’s initiative on income tax reduction was submitted to parliament on Monday. This move, which was announced by the parliamentary group last Friday during the debate on the Government’s bill, confirms their approach.
The socialist bench suggests adjusting not the IRS Code but another decree that introduced the wage bonus, adding a new clause ensuring that “the qualification salary bonus is cumulative with the regime provided for in Article 12.º-B of the IRS Code” (the IRS Jovem).
This incentive, established by António Costa’s Government in 2023, allows young professionals up to the age of 35 to request a reimbursement of their tuition fees from the State upon completing their undergraduate or master’s degree as a form of recognition.
The bonus is annually paid by the Tax Authority by July 30 during the number of years that correspond to the studies completed.
For a bachelor’s degree, the bonus amounts to 697 euros, and for a master’s degree, 1,500 euros. In the case of an integrated master’s, the bachelor’s years entitle one to 697 euros, and the master’s years to the same 1,500 euros.
The IRS Jovem is a special tax regime enabling contributors to benefit from reduced taxes over a certain period through partial tax exemption on a percentage of income earned yearly. This exemption varies over time, and the incentive period can last ten years, provided the beneficiary does not exceed 35 years of age.
The PS aims to ensure that the law allows beneficiaries to enjoy both measures simultaneously.
The socialist parliamentary group notes that these two regimes “were designed to be cumulative from the start and will continue to be so as long as it depends on the PS.”
“The notion of terminating the wage bonus or even establishing a mutual exclusion regime between the wage bonus and the IRS Jovem highlights the priorities of the coalition supporting this Government, as the IRS Jovem intensely benefits higher income brackets, also linked to the idea of increasing tuition fees”, states the PS in the rationale behind the initiative.
Since employees must request the bonus via the Finance Portal, the PS suggests making the form available “annually for at least three months, ending by May 31.”
Regarding this year’s wage bonus request, the socialist bench includes a transitional provision for the Government to provide the form “exceptionally from September 1 to November 31, 2025.”
During the IRS reduction proposal debate, PS deputy António Mendonça Mendes announced that the Government will not “obstruct” the executive’s proposal to alter the rates from the first to the eighth bracket and that a single proposal will be presented in the specialization phase to “ensure there is no giving with one hand and taking with the other.”
