COVID-19: Main legislative or regulatory initiatives that have been taken in Portugal

Portugal - 

Portugal Alert

Pandemic has entered the world’s daily vocabulary in the most dramatic and unexpected way. As the severity of the situation worsens, a growing number of legislative initiatives attempt to address the needs of citizens and society in the face of the outbreak. This note is aimed at reporting on the main legislative or regulatory initiatives that have been taken in Portugal with a view, mainly, to protecting society against the spread of the new coronavirus and the effects that the pandemic causes on social and economic life.

This report is a work in progress that will be updated as needed to address the new social and economic problems the evolution of the virus will be raising over time. We will updated this note whenever is warranted. 

The structure of this report has been arranged to provide an ad hoc cataloguing of the measures, to better clarify their scope, avoiding excessive technical jargon.

1. State of Emergency

1.1. Declaration of the State of Emergency

1.1.1. Decree of the President of the Republic no. 14-A/2020, of 18 March

The pandemic caused by the COVID-19 disease constitutes a threat to the life and physical integrity of the Portuguese.

As a case of public calamity, the current regulations allow for the enactment by the constitutional bodies of various types of measures appropriate to cope with such an abnormality.

Under the Framework Act on Civil Protection (Lei de Bases da Proteção Civil), the State of Alert had been declared and, in this framework, several measures were approved to contain the spread of the pandemic. This situation does not correspond, however, to a constitutional State of Exception (Constitution, Article 19). In fact, the measures adopted under the so-called State of Alert, while also aiming at responding to the current pandemic situation, do not have the same constitutional grounds - and, therefore, legal certainty – as the measures that may be enacted under an scenario formally qualified as a State of Exception.

In the exercise of his constitutional and legal powers (Constitution and Organic Law regulating the States of Siege and of Emergency), the President of the Republic, after consulting the Government and obtaining authorisation from the Assembly of the Republic, declared a State of Emergency by means of Decree no. 14-A/2020, of 18 March, on the basis of a public calamity situation.

This decision entered into force immediately and is applicable throughout the national territory for a period of 15 days.

Under the terms of the Presidential Decree, the following fundamental rights were partially suspended: a) Right of movement and settlement in any part of the national territory; b) Property and private economic initiative; c) Workers' rights; d) International movement; e) Rights of assembly and demonstration; f) Freedom of worship, in its collective dimension; and g) Right of resistance.

The implementation of the declaration of State of Emergency is the responsibility of the Government, and compliance with the principle of proportionality is essential in this context. In essence, the measures that may be approved by the Government must be limited, particularly as regards their extent, their duration and the means used, to what is strictly appropriate and necessary for the prompt restoration of constitutional normality.

The effectiveness of the measures that may be adopted by the Government during this period is ensured by the security forces and the Armed Forces.

According to the law, the violation of the Decree declaring the State of Emergency, or of any the enforcement measures approved by the Government, constitutes a crime of disobedience, provided for and punished with imprisonment of up to 1 year or with a fine of up to 120 days if a legal provision punishes simple disobedience, or in the absence of such legal provision, subject to the criterion of the authority or official.

Citizens whose rights, freedoms and guarantees have been violated as a result of the declaration of a State of Emergency or of any of the measures adopted during its enforcement period which proves to be unconstitutional or illegal, namely by illegal or unjustified deprivation of liberty, shall be entitled to the corresponding compensation. Legal references to rights, freedoms and guarantees shall apply to analogous rights and, in accordance with the principle of assimilation, to legal entities.

The organic law governing the State of Siege and the State of Emergency has a reinforced legal hierarchy or force of law (valor reforçado), which implies the reversal of the general principle of law establishing the revocatory effectiveness of subsequent regulations. This is another parameter of the measures that may be adopted by the Government during the exception period.

1.1.2. Decree no. 17-A/2020 of 2 April 2020 (1st extension of the declaration of the state of emergency)

Pursuant to Decree no. 17-A/2020 of 2 April 2020, the President of the Republic extended the duration of the State of Emergency declared, on the grounds of the continuance of a public calamity situation. The extension lasted 15 days, beginning at 0:00 a.m. on April 3, 2020, and ending at 11:59 p.m. on April 17, 2020.

As can be read in the preamble, the Decree added to the previous declaration of the State of Emergency a number of matters concerning employment protection, price controls, support for the elderly in nursing homes or at their private residence, education and adoption of urgent measures for the protection of citizens deprived of their liberty, especially those more vulnerable to the COVID-19 disease, in accordance with the exhortation contained in the message from the United Nations High Commissioner for Human Rights of 25 March.

Thus, while the scope of the suspension of the rights of travel and settlement, international movement, right of assembly and demonstration, and freedom of worship, remains generally unchanged, it has been extended as regards suspension of private property rights and workers' rights; moreover, the exercise of the rights to personal data protection and freedom to learn and teach has been partially suspended.

Among the many actions mentioned affecting property and private economic initiative, two measures are worth to be highlighted: on the one hand, the possibility of "temporarily modifying the terms and conditions of long-term contracts or waiving the obligation to deliver certain services, as well as limiting the right to restore the financial balance of concessions due to the drop in their usage resulting from the measures adopted under the frame of the State of Emergency"; on the other hand, the possibility of "reducing or deferring, with no penalty, the collection of rents, interest and dividends and other forms of income from property or capital".

1.1.3. Decree of the President of the Republic no. 20-A/2020 of 17 April (2nd extension of the declaration of the state of emergency)

On April 17, the Decree of the President of the Republic no. 20-A/2020 extended for the second time the declaration of a state of emergency. The extension operates for 15 days, beginning at 0:00 a.m. on April 18, 2020 and ending at 11:59 p.m. on May 2, 2020.

The terms of the new extension of the declaration of state of emergency were basically similar to the previous one. It should be noted, however, that this decree, as announced in its preamble, restates "the validity, subject to certain temporary conditions, of the right of workers' committees, trade union associations and employers' associations to take part in the drafting of labour legislation", reconsiders the application of the restrictions to the right to travel, in order to allow the celebration of the Workers' Day - albeit with certain public health limits - and also the possibility of reactivating, under "appropriate monitoring", services, businesses and establishments, in a "gradual, phased, alternate and differentiated manner".

1.2. Regulation of the Declaration of the State of Emergency 

1.2.1. Decree no. 2-A/2020, of March 20

Decree no. 2-A/2020, of March 20, enacted the declaration of the State of Emergency, which came into force at 00:00 on March 22, 2020.

In the extensive preamble, it assumes that "democracy cannot be suspended" and that the exceptional measures, determined by the exceptional nature of the situation, have as their priority "to prevent the disease, contain the pandemic, save lives and ensure that the fundamental supply chains of essential goods and services continue to be maintained", and therefore "must be taken with respect for constitutional and legal limits, which means that they must, on the one hand, be limited to what is strictly necessary and, on the other, that their effects must cease as soon as normality is restored".

Among the most noteworthy measures decreed are (i) those that the Decree immediately implements and are applicable forthwith to citizens and economic operators (essentially in the areas of freedom of movement and private economic initiative), (ii) and those that, in the form of regulations or administrative acts of implementation, may be expected to be taken by the member of the Government in charge of the respective area of governance, or by the civil protection or health authorities, in order to adapt the Government's response to the evolution of the emergency scenario (essentially in the area of limitation of private property rights).

As for the suspension of the right to travel, in addition to the "mandatory seclusion" of patients and those infected with COVID-19 and SARS-Cov2, or to those who have been determined to be subject to active monitoring, a "general duty of home confinement" is enacted, with exceptions for those travels that prove necessary for certain purposes and functions essential to survival, such as the acquisition of goods and services, the exercise of the professional practice, travels to some services, performance of procedural acts in court and provision of medical-veterinary care. Other short-term trips are foreseen, namely for physical activity, accompanying children outdoors and walking with pets. The need to travel for imperative family reasons is also provided for. Freedom of press has not been restricted, with the possibility of travelling to exercise this right.

People who are particularly vulnerable because of their age (over 70) or illness are subject to a "special duty of protection" and strictest restrictions on their freedom of movement.

With regard to the right of free private economic initiative, it is important to highlight the closure of facilities and establishments intended for recreational, leisure and entertainment use, cultural and artistic performances, and sports activities, as well as the suspension of activities in the retail trade and service delivery businesses, with the exception of those that make available or provide goods of first necessity or considered essential in the emergency situation.

Thus, restaurants and similar establishments may remain active for the provision of take-away meals or home deliveries. Also, the social purpose or public interest nature (canteens or dining areas), the absence of contact with the public (e-commerce and similar, as well as the provision of online services), or the allocation to essential infrastructures (establishments located along the motorway network, or inside airports and hospitals) determine the inapplicability of the suspension of activity for some establishments.

In fact, recognising the "importance and indispensability of keeping the food production chain running in order to maintain the regular functioning of society", there are a variety of establishments that must remain in operation "in order to ensure the availability of essential goods or other items considered indispensable", namely mini-markets, supermarkets and hypermarkets, specialised food retail outlets, medical and veterinary services, gas stations, essential utilities and their maintenance services, magazines and stationery, pharmaceuticals, medical and orthopaedic products, cosmetics and hygiene, optical material and household fuels.

Home delivery services, vehicle maintenance and repair, security and home surveillance services, ready-to take home meals, cleaning and related activities, repair of computers and peripherals, household appliances and similar, washing and dry cleaning, medical, health and social welfare services, essential public services, banking, financial and insurance services and funeral activities will also remain active.

However, retail outlets that must remain in operation shall do so under specific safety rules that must be followed by their users (maintenance of a minimum safety distance of two metres between persons, permanence only for the time strictly necessary, prohibition of consumption of products inside) and by those shipping or delivering goods (following the hygiene and health rules defined by the health authorities), and also the rules of access and allocation rules already provided for in Order no. 71/2020 of 15 March.

In addition to these immediately effective measures, there is a set of measures yet to be implemented, through regulations or administrative acts, that will become effective with the mere notification to the addressee, which will be understood to have been carried out, for approval or implementation purposes, with the publication of the relevant regulations or acts on the website of the competent authorities.

As for measures limiting the normal exercise of the private property right, the Decree provides for the conferral of a public health assurance competence to the member of the Government responsible for the health area, who may determine the temporary requisition of industries, factories, workshops, fields or facilities of any nature, including health centres, private health services and establishments and the temporary requisition of all types of goods and services, as well as impose mandatory services on any entity, where appropriate and indispensable for the protection of public health, in the context of the emergency situation caused by the SARS -CoV -2 epidemic, as well as for the treatment of COVID-19.

The possibility of civil requisition by health or civil protection authorities of any goods or services owned by public or private legal entities, such as health equipment, ventilators and protective masks, is foreseen.

As the situation evolves, several measures will still be adopted under this Decree by decision of the member of the Government in charge of the respective area of governance - economy, health, internal administration, justice, transport, agriculture, sea, energy and environment.

Certainly, it will also be necessary for the responsible members of the Government to define rules and take steps (i) in the areas of transport, either to guarantee the maintenance and operation of road, railway, port and airport infrastructures, or to ensure the transport of goods and essential goods; (ii) in the scope of essential services of water, electricity and gas, fuels and collection and treatment of solid waste; (iii) in the maritime and agricultural sectors in relation to, namely, transport, distribution and supply in the fields of fisheries and aquaculture, as well as agricultural and livestock goods and services.

Finally, provision is made for the possibility of granting extraordinary authorisation to carry out other retail or service activities, such as small retail outlets and those providing proximity services, or those which will prove to be essential for maintaining the continuity of product distribution chains to consumers, by authorisation from the Minister for Economic Affairs.

1.2.2. Decree no. 2-B/2020 of 2 April 2020

Following the 15-day extension to the declaration of a State of Emergency by the aforementioned Decree from the President of the Republic of 2 April, the Government approved Decree no. 2-B/2020 of 2 April 2020, which, by repealing Decree no. 2-A/2020 of 20 March, essentially maintained its structure and content. 

It should be noted, however, in view of the extension of the declaration of a State of Emergency by the Decree from the President of the Republic and the observed evolution in the propagation of the pandemic, that the Government’s Decree dictates an additional set of measures, on the one hand, and, on the other, imposes a reinforcement of the measures restricting the rights and freedoms of citizens and economic agents enacted through the previous Decree of 20 March.

Thus, in addition to maintaining, in general, the aforementioned restrictive measures, a temporary ban on the freedom of movement during the Easter period (between 0:00 a.m. on April 9 and 24:00 p.m. on April 13) is also imposed.

While maintaining the restrictions to the right of free private economic initiative, the Decree of April 2 now regulates (i) the exercise of the activity of itinerant sellers, for the provision of basic or essential goods, in certain localities, subject to the decision of the municipality and the favorable opinion of the local health authority; and (ii) the exercise of the business of rental of self-drive cars for exceptional travel or commercial activities or for the performance of services authorized by the Decree itself, as well as for the provision of assistance to broken or damaged vehicles, or for essential public services. 

With regard to new measures concerning the suspension of this right, the Decree extends the enforcement of restrictions on access and allocation of spaces in commercial and catering or drinking establishments to the wholesale establishments, markets and auctions that are authorized to operate; it also determines the continuation of funeral activities, providing that these establishments may not refrain from performing funeral services for deaths caused by COVID-19.

Decree no. 2-B/2020 provided for a set of measures that may be implemented according to the evolution of the pandemic public health emergency scenario.

In this context, and in relation to the limitations on both economic initiative and private property rights, it is worth highlighting the exponential extension of the powers bestowed on the member of the government responsible for the health area, who may dictate, in order to guarantee public health, exceptional measures for the articulation of the services and establishments integrated in the National Health Service with the private and social sector healthcare service providers; and measures relating to the supply chain of pharmaceutical products (manufacture, distribution, marketing, import, purchase, dispensation and prescription), medical devices and other health products, in order to ensure the supply and availability to healthcare units, patients and users; measures to contain and restrain the market, set maximum prices, centralize the oversight of stocks and quantities produced, and exempt economic operators acting in emergency situations from the payment of taxes.

Decree no. 2-B/2020 provided for a strengthening of the powers granted to the law enforcement agencies and services in the oversight of their compliance, be it by raising community awareness on the general duty of self-isolation, banning gatherings of people in public areas or dispersing groups of more than five people, or, more expeditiously, enforcing penalties for disobedience or violation of the circulation restrictions during the Easter period, the obligation to shut down establishments and facilities and suspend activities, or the mandatory confinement of those subject to it. It also included provisions relating to the competence of the parish councils in the assurance of compliance with the Decree, which will be limited to issuing recommendations and advice to citizens, as well as signaling to the law enforcement forces and services the establishments required to be closed in order to ensure the effective cessation of the activities whose suspension is determined.

1.2.3. Decree no. 2-C/2020 of April 17

Under the second renewal of the declaration of a state of emergency on April 17, the government, through Decree no. 2-C/2020 of the same date, regulated this extension, but adjusted the previously approved measures in order to contain the transmission of the virus and the spread of the COVID-19 disease, as well as to ensure "the proper functioning of the supply chains of essential goods and services," as the preamble reads.

Thus, Decree no. 2-C/2020 revokes Decree no. 2-B/2020, but maintains, in essence, the measures of suspension of the right of movement already determined in earlier regulations on the declaration of a state of emergency and its extension, such as the mandatory lockdown, the special duty of protection and the general stay-at-home confinement obligation.

The decree maintains, with no material changes, the restrictions on the right to economic initiative and private property, as determined on April 2.

2. Social rights and duties

As a result of the different legislative and regulatory interventions that have been published since the declaration of the State of Alert in response to the epidemiological situation of the new COVID-19, the following measures with an impact on social rights have been adopted:  

  1. The prophylactic isolation for 14 days of employed and self-employed workers motivated by situations of serious risk to public health decreed by the public health authorities is considered as a sickness, and the recognition of sickness benefits will not be subject to verification of a number of requirements (e.g. qualifying period, certification of temporary incapacity for work), nor to a waiting period. In addition, the benefit will cover 100% of the reference pay or, in the case of beneficiaries who do not have accrued 6 months of pay, the reference pay is defined by R / (30 x n), being R the total pay recorded from the beginning of the reference period until the day before the prophylactic isolation, and n the number of months to which they relate.

  2. In cases of sickness caused by COVID-19, both for employed and self-employed workers, the granting of the sickness benefit is also not subject to a qualifying period.

  3. A situation arising from the prophylactic isolation for 14 days where an employed worker covered by the general social security system needs to care for children or other dependent persons, as described above in paragraph 1, will be considered as an excusable absence, and, in the case of children under 12 years of age, or regardless of age, those with a disability or chronic illness, the granting of the child care allowance and the allowance for child care will not be subject to a qualifying period. Moreover, in this case, should the beneficiaries have not accrued six months of pay records, the reference pay will be that already explained in §1.

  4. Outside the school break periods, absences from work motivated by the unavoidable need to care for a child or other dependent under the age of 12 or, regardless of age, with a disability or chronic illness, as a result of the suspension of teaching and non-teaching activities in school or social welfare facilities, when dictated by a health authority or the Government, shall be considered justified leave, with no loss of rights, except in relation to retribution, and the worker shall report the absence as provided for in article 253 of the Labour Code.

  5. In the cases provided for in §4, the employee is entitled to receive an exceptional monthly or proportional aid amounting to two thirds of his or her base salary, with a minimum limit corresponding to the guaranteed minimum wage and a maximum of three times the minimum wage, which shall be paid in equal parts by the employer and the social security (with the employer paying the amount in full and receiving the social security portion). This aid is granted automatically, as long as no other alternative forms of performance are available for that activity, such as teleworking, and cannot be received by both parents, but only one of them, regardless of the number of dependent children under their care.

  6. An exceptional family aid is also provided for self-employed workers, amounting, subject to certain limits, to one third of the contribution base for the first quarter of 2020, provided no alternative forms of performance of the activity are available, such as teleworking.

  7. Under the Decree-Law, self-employed workers benefit from additional aids linked, in particular, to the reduction in economic activity.

  8. As for alternative forms of work, the activity scheme via teleworking becomes mandatory, regardless of the employment relationship, provided that it is compatible with the functions performed.

  9. An extraordinary professional training aid is created, covering 50% of the worker's remuneration, capped to the guaranteed minimum monthly wage plus the cost of training, for workers remaining with no occupation in productive activities for considerable periods, when linked to companies whose activity has been seriously affected by COVID-19.

  10. All activities maintained in operation or operation must comply with the recommendations from the health authorities, particularly those regarding hygiene and safety distances to be observed between persons.

Decree-Law no. 10-G/2020, of March 26, established exceptional and temporary measures, defining and regulating the granting of aids to workers and businesses affected by the COVID -19 pandemic, with a view to maintaining jobs and mitigating business crisis situations, and clarifying the scope of the aids established in Ordinance no. 10-G/2020, of March 26, 2003. 71/2020, of March 15, (as amended by the Declaration of Rectification no. 11-A/2020, published on the same date) and Ordinance no. 71-A/2020, of March 15, also amended by Ordinance no. 76-B/2020, of March 18.

From the above regulations, the following measures are worth to be highlighted:

  1. Promotion of extraordinary aids aimed at safeguarding jobs in companies affected by a situation of business crisis, defined as (i) total or partial shutdown of the company or establishment as a result of the obligation to shut down facilities and premises, or as evidenced by a declaration from the employer accompanied by a certificate from a certified accountant attesting to this, (ii) total stoppage of the activity of the company or establishment as a result of the disruption of global supply chains or the suspension or cancellation of orders, or (ii) abrupt and sharp drop of at least 40% in turnover during the period of thirty days preceding the request to the competent social security services, as compared to the monthly average of the two months preceding that period, or to the same period of the previous year, or, for those who started the activity less than 12 months ago, the average of that period.

  2. The entities benefiting from this support may be inspected, after the fact, by the competent public entities, and must prove at that moment the grounds on which the application and the respective renewals were based.

  3. The proof referred to in the above paragraph shall be backed by documentary evidence, including, in particular, the following documentation: (b) periodic VAT returns for the month for which the aid was granted, and the two immediately preceding months, or return for the last quarter of 2019 and the first quarter of 2020, depending on whether the applicant is enrolled on the monthly or quarterly VAT return system, showing intermittent or interrupted supply chains or suspension or cancellation of orders c) For the purposes of the second part of paragraph 1 b) i), documents demonstrating cancellation of orders or bookings resulting in the use of the affected company or unit being reduced by more than 40% of its production or occupancy capacity in the month following the request for support; d) Additional evidence to be established by order of the member of the Government responsible for the area of Work and Social Security.

  4. Access to the aids is conditional on the employer being current in all its tax and contribution obligations.

  5. Under a situation of business crisis, as provided in the preceding paragraph, the employer shall be entitled to: a) receive an extraordinary aid to safeguard jobs, skilled or not, in case of temporary reduction of the normal work period or suspension of the employment contract, subject to articles 298 and following of the Labour Code; b) Extraordinary training plan; c) Extraordinary financial incentive to support the normalisation of the company's activity; d) Temporary exemption from the payment of Social Security contributions payable by the employer.

  6. For the purposes of subparagraph a) of the preceding paragraph, the employer shall notify the decision to the employees, indicating the foreseeable duration of the situation, after hearing the union representatives and the work council, if any, and immediately filing an electronic application before the competent social security department accompanied by a declaration from the employer containing a summarized description of the business crisis situation affecting the firm and, outside cases of total or partial closing of the undertaking or establishment resulting from the obligation to close plants and premises, a certificate from the certified accountant of the undertaking certifying this, and a list of the workers affected and their social security numbers.

  7. During the period of application of this measure, in a situation of business crisis, the employer may temporarily shorten the regular work schedules or suspend employment contracts, and the provisions of Articles 298 et seq. of the Labour Code shall apply mutatis mutandis.

  8. During the period of application of this measure, the Social Security will cover 70% of two thirds of the gross monthly remuneration of the employee, up to a maximum limit amounting to three guaranteed minimum monthly wages (1,905.00 euros).

  9. This aid has a duration of one month and may exceptionally be extended monthly up to a maximum of 3 months.

  10. During the period of application of the aid measures provided for in this Decree-Law, as well as in the following 60 days, the employer covered by these measures may not terminate employment contracts under the modalities of mass or individual redundancy provided for in articles 359 and 367 of the Labour Code.

Decree-Law no. 2-B/2020 of 2 April, which implements the extension of the declaration of a State of Emergency issued by the President of the Republic and passed by the Assembly of the Republic, includes several new measures in labour matters, namely: 

  1. Suspension of dismissals: the Working Conditions Authority (ACT) is competent for intervening in cases of dismissal of workers where it deems the legal rules in force in this matter are being violated. In this case, the labour inspector may draw up a report and notify the employer to regularize the situation. Following notification of the ACT to the employer, and until the regularization is determined by this entity or a final judicial decision on the matter is rendered, the employment contract will not terminate and all rights of the parties (employer and employee), namely the right to remuneration and the inherent obligations before Social Security, will be maintained.

  2. Mechanisms are established to reinforce the resources of the ACT, namely those linked to the allocation (under a mobility scheme) of employees from other public entities to the ACT, and the possibility of this entity to hire external services for this purpose.

  3. The possibility of movement of workers is maintained as long as it is for travel to perform the professional activity, to search for work or to respond to the labour supply.

  4. During Easter (April 9th to 13th, 2020), workers who need to move between different municipalities must have a declaration issued by the employer certifying that they are performing their professional activity.

  5. Occupational Safety and Health: all companies that remain in operation must comply with the recommendations from the health authorities, particularly those regarding hygiene and distances to be maintained between people.

  6. Exceptional suspension of work relations with the National Health Service: as long as the state of emergency persists, the possibiliy for the employer or the employee to terminate work relations with health professionals affiliated to the National Health Service is suspended, except in duly substantiated cases, authorized by the governing body. This rule applies to any form of termination of said employment relationships. In the case of fixed-term employment contracts whose termination would operate during the state of emergency, the periods for the termination or renewal of such contracts shall be automatically considered extended until the end of the state of emergency.

3. Justice and Courts

Several exceptional and temporary measures have been adopted in this area, of which, with reference to the respective legal regulations, we would highlight the following:

Decree-Law no. 10-A/2020, of 13 March

  1. A declaration issued by a health authority attesting to the risk of contagion from COVID-19 constitutes grounds to allege justifiable reason preventing performance of legal proceedings or procedural acts which must take place in person within the scope of proceedings and procedures handled by the law courts and tribunals; administrative and taxation courts; arbitration courts; public prosecutors' offices; peace courts; alternative dispute resolution entities; notary public offices; registry offices; and governmental entities and services.

  2. That declaration shall also constitute justified grounds for non-attendance or postponement of any procedural step in the proceedings and procedures referred to above in paragraph 1.

  3. In the  event of suspension of the attendance in person or closure of the premises where the proceedings or procedural acts referred to above in paragraph 1 were to be performed by decision of a public authority, the relevant procedural time limits shall be considered suspended effective from the date of closure or suspension of attendance.     

  4. For all legal purposes, public authorities shall accept the display of documents which should be renewed whose validity expires after March 9, 2020 or within 15 days immediately prior to the date of entry into force of this Decree-Law. In particular, the citizen's card, certifications and certificates issued by the civil identification and registration services, driving licences, as well as documents and visas related to the stay in national territory, whose validity expires after the date of entry into force of said Decree-Law or within the 15 days immediately preceding, shall be accepted, on equal terms, until 30 June 2020.

  5. These measures shall take effect starting from 9 March 2020.

Law no. 1-A/2020, of March 19 (as amended by Lay no. 4-A/2020, of 6th April)

1. Determined the suspension of procedural deadlines until the cessation of the exceptional situation of prevention, containment, mitigation and treatment of the epidemic infection from the SARS-CoV-2 virus and the COVID-19 disease. 

2. Notwithstanding the following exceptions, this suspension regime applies to all the deadlines established for the performance of procedural acts required to be carried out within the scope of the proceedings and procedures before the courts, administrative and tax courts, Constitutional Court, Court of Auditors, arbitration courts, Public Prosecutor's Office, courts of peace, alternative dispute resolution entities and tax enforcement bodies.

3. The legal term for filing for the debtor's bankruptcy is also suspended, as are any acts required to be performed in connection with execution proceedings, in particular those relating to sales, arrangement with creditors, surrender of real estate properties to the legal authorities, and seizure proceedings, as well as their preparatory measures, with the exception of those that would cause serious harm to the debtor's livelihood or whose nonperformance would cause him irreparable harm, which depends on a prior court decision.

4. However, such suspension shall not preclude:

  • The handling of processes and the practice of face-to-face and non-presential acts that are not urgent when all the parties agree that the conditions to ensure their practice through the computer platforms allowing them to be carried out electronically or through appropriate remote communication means, such as teleconferencing, video calling or other equivalent, are fulfilled;
  • A final decision being rendered in those cases in which the court and other entities do not find necessary to take further steps.

5. Urgent proceedings shall continue to be conducted without suspension or interruption of time limits, acts or steps, and the following shall be observed with respect to these:

  • In proceedings requiring the physical presence of the parties, their representatives or other procedural interveners, the performance of any procedural act shall be carried out by means of appropriate remote communication means such as teleconferencing, videoconferencing or similar; 
  • Where the performance of the abovementioned proceedings requiring the physical presence of the parties, their representatives or other procedural interveners is not possible and the life, physical integrity, mental health, liberty or immediate subsistence of the interveners is at stake, the proceedings may be conducted in person, provided that this does not involve the presence of more persons than provided for in the recommendations from the health authorities and in accordance with the guidelines laid down by the competent Supreme Councils;
  • In the event that it is neither possible nor advisable to ensure the performance of acts or steps under the terms of the preceding paragraphs, the suspension scheme referred to in paragraphs 1 and 2 shall also apply to such proceedings. 

6. Urgent steps will also include, for the purposes of § 5: 

  • Proceedings and procedures seeking to safeguard rights, freedoms and guarantees impaired or threatened to be impaired by any unconstitutional or illegal measures referred to in Article 6 of Law no. 44/86 of 30 September 1986; 
  • The urgent service provided for in Article 53(1) of Decree-Law no. 49/2014 of 27 March;
  • The proceedings, procedures, acts and steps that prove to be necessary to avoid irreparable harm, in particular those relating to minors at risk or to educational guardianship proceedings of an urgent nature, or to trials of imprisoned defendants.

7. Prescription and limitation periods for all types of proceedings and procedures shall also be suspended.

8. The above shall also apply, mutatis mutandis, to cases including, without being limited to, the following:

  • Procedures running in notary and registry offices;
  • Administrative, sanctioning and disciplinary proceedings, including acts contesting final or interlocutory decisions, running under the terms of direct, indirect, regional and local administration services, and other administrative entities, such as independent administrative entities, including the Competition Authority, the Insurance and Pension Funds Supervisory Authority, Banco de Portugal and the Securities Market Commission, as well as those running under the terms of professional public associations.

9. These measures shall take effect on March 9, 2020, with the exception of those relating to urgent proceedings, which shall only take effect on April 7 and shall cease on the date on which the end of the exceptional situation is declared by Decree-Law.

10. Upon termination of said exceptional situation, the Assembly of the Republic shall, by means of its own statute, adapt the schedule of judicial vacations to be in force in 2020.

Under this scenario of pandemic and State of Emergency, The Supreme Judicial Council of the Judiciary has enacted a number of exceptional management measures in relation to the courts, whereby only those procedural acts and steps where fundamental rights  are at stake or which are intended to avoid irreparable damage should be carried out, without prejudice to the possibility  of carrying out the other services under the responsibility of the Judicial Magistrates that can be remotely ensured.

1.5. Decree-Law no. 16/2020 of April 15

  1. Established that, to perform acts in the context of urgent proceedings running before Courts of Peace, remote communication means such as e-mail, telephone, teleconference or video conference may be used by the parties to the proceedings, by the Justice of the Peace and the court clerk's office.
  2. This measure became effective on April 16 and is valid until June 30, 2020.

1.6. Other measures

Under this scenario of pandemic and State of Emergency, The Supreme Judicial Council of the Judiciary has enacted a number of exceptional management measures in relation to the courts, whereby only those procedural acts and steps where fundamental rights are at stake or which are intended to avoid irreparable damage should be carried out, without prejudice to the possibility of carrying out the other services under the responsibility of the Judicial Magistrates that can be remotely ensured.

4. Public procurement and oher administrative procedures

4.1. Public procurement and commitment of expenditure

Decree-Law no. 10-A/2020 establishes exceptional public procurement and public expenditure authorization regimes, which basically aim to reconcile the necessary procedural promptness with the defence of the State’s interests and the strict transparency of public spending. More specifically, the first regime (public procurement) allows for a great flexibility in the public contract formalization procedures; the second (public expenditure authorization) significantly reduces the bureaucratic burden of the public procurement process, in order to align it with the situation of need underlying the new exceptional public procurement regime.

Unsurprisingly, the target scope of the exceptional procurement regime is defined in Article 1(1) by reference to the fact that triggered it - the SARS-CoV-2 epidemic. Thus, the Decree-Law applies to the formalization of public procurement operations (public works contracts, rental or acquisition of personal property, and procurement of services) aimed at the prevention, containment, mitigation and treatment of epidemiological infection by COVID-19, as well as the restoration of normality following it.

The scope of this measure includes both corporate and governmental public sector entities, as well as, with the necessary adaptations, local authorities.

The essential feature of this scheme is the use of the direct adjustment procedure. As opposed to the standard European and national rules on the matter, it greatly facilitates the fulfilment of the material criteria that may justify and serve as a basis for this type of procedure.

In addition, the new law provides for, besides the aforementioned direct adjustment modality, the possibility for the contracting entities to resort to the simplified direct agreement scheme (a rather informal procedure) for the formalization of contracts involving the rental and acquisition of goods and services or the procurement of services (excluding works), as long as the operation does not exceed EUR 20,000.00 (in practice, four times the general limit that the Public Contracts Code (CCP) currently provides in Article 128(1)).

In an attempt to simplify public procurement, the decree also rules out the application of the usual impediments of the direct adjustment procurement method, such as that set out in Article 113(2) of the CCP (possibility of inviting an entity with a contract volume having already exceeded certain limit in the current economic year or in the two preceding years).

It also deviates from the relative preference which should normally be given, within closed procedures (with no public call for tenders), to the prior consultation scheme (which involves the need for the contracting authority to draft an invitation addressed to at least three entities).

It should also be highlighted, due to the major difference with respect to the direct adjustment procedure provided for in the CCP, the provision that the effectiveness of the contract does not depend on its publication in the Base Portal for public contracts.

Another particularity worth no be noted is the possibility for the contracting authority to make advance payments on account of the contractual price, if and when required in order to guarantee that the economic operator can make the relevant goods and services available to meet the public health interest objectives referred to in the legislation.

The Decree-Law also extends the scope of Article 45(2) of the Law on the Organisation and Functioning of the Court of Auditors to the contracts covered by it. Thus, regardless of their value, contracts covered by this Decree-Law may start to take effect before their prior approval or declaration of conformity; in particular, payments arising from such contracts may be made.

Last, with special emphasis on public procurement, Article 7 of the Decree-Law stands out for the exceptional regime that provides more flexibility regarding the level of authority required to authorize the signing of contracts for the acquisition of services by bodies, agencies, services and other entities, including the corporate public sector, the Ministry of Health, DGRSP, INMLCF, I. P., HFAR, LMPQF and IASFA, I. P.. In these cases, the authorisation is the responsibility of the top manager or senior management body, and subsequent communication of the same to the supervising Government members is considered sufficient.

With regard to the exceptional expense authorization regime, we may summarize the following rules, which apply, exceptionally, to the public procurement procedures carried out under the Decree Law:

  1. Tacit approval of expenditure requests after 24 hours without reply (Article 3(1)(a));

  2. Purchases made subject to the Decree-Law (Article 3(1)(b)) shall be deemed as justified expenditures for the purposes of these requests for authorisation;

  3. Tacit approval of multi-annual expenses that are not expressly rejected, within three days, after submission of the request for authorisation for an extension of expenses ordinance to the member of the Government responsible for the area of finance (Article 3(1)(c));

  4. Budgetary changes involving an increase in funds, in exchange for other actual expenditure items, shall be authorised by the member of the Government responsible for the respective sector area (Article 3(1)(d));

  5. Tacit approval of the disengagement of funds, as soon as three days have elapsed after the submission of the respective request, in cases where this is duly justified in order to comply with the objectives set out in Article 1 of the Decree-Law (Article 3(1)(e));

The decision to contract the acquisition of services aimed at conducting studies, opinions, projects and consulting services, as well as any specialized work, does not require the administrative authorizations provided for in the general law, which will be a responsibility of the member of the Government in charge of the sector area in question (Article 4).

4.2. Administrative deadlines

The lack of clarity of Law no. 1-A/2020, of 19th March, both in its systematisation and in the expressions used (specially those related to administrative, procedural and tax deadlines), raised a number of questions regarding their interpretation, as well as on the soundness of the legislator’s decision to apply the special suspension arrangements resulting from the judicial holiday arrangements to most of deadlines.

Thus, whereas Law no. 1-A/2020 determined the suspension of all the administrative deadlines effective on the date on which Decree-Law no. 10-A/2020 of 13 March came into force, in any administrative procedure, namely in public procurement operations, Law No 4.A/2020, of 6th April, which is the first amendment to the latter, sets our a different regime.

Law 4-A/2020, regarding procedural deadlines in general, clarifies article 7, paragraph 9, in the sense of c) providing for the suspension of deadlines for the performance of acts by private individuals in administrative proceedings (the misleading expression "that run in favor of private individuals" having been removed).

Despite the clarification, the suspension of procedural deadlines should be examined on a case-by-case basis, as it does not necessarily hinder their processing and results from an adaptation of the procedural deadlines scheme to a different procedural reality.

In general, for non-urgent proceedings, Law 4-A/2020 determines that, (i) by agreement of the parties (when all of them consider to meet the conditions to do so), the proceedings and the performance of in-person and non-urgent acts by electronic means or, specifically, videoconference, shall continue, and also that (ii) if, according to the understanding of the court and other entities, there is no need to open new proceedings, a final decision for said proceedings may be rendered.

With regard to urgent proceedings (which include, without being limited to, in the administrative jurisdiction area, in addition to injunctive proceedings, class actions, summons for the provision of information, consultation of documents, or issuance of certificates), it is now established that they will continue to be processed, without suspension or interruption of time limits, acts or steps. 

The proceedings should be carried out via remote communication means or, if this is not possible, in person, with due regard for the recommendations from the health authorities and the guidelines from the competent superior councils regarding the number of people present in the premises. 

Only in cases where the telematic or in-person performance of acts or steps is not possible or advisable may the suspension arrangements for non-urgent procedures be applied.

Law no. 4-A/2020 also sets out a separate scheme of deadlines for public procurement operations. 

First of all, it removes the pre-contractual litigation procedure from the general regulations for urgent proceedings, withdrawing the suspension of time limits in these proceedings - thus apparently precluding the possibility, even if exceptional, of suspending the corresponding time limit due to alleged impossibility or inadequacy of carrying out proceedings by telematic or face-to-face means.

Then, it also determines the non-application to the time limits related to public procurement procedures, under the Public Procurement Code, of the suspension provided for administrative procedures with respect to the performance of acts by private individuals.

Finally, it provides that the procedural deadlines under the Public Procurement Code that had been suspended under the previous wording of Law no. 1-A/2020, will be restarted on the date the law comes into force (which will occur on April 7, 2020).

5. Businesses

The pernicious impact of the pandemic on the health of the business fabric calls for measures enabling firms to remain operational wherever possible, preserving jobs and business continuity.

5.1. Measures related to employment contracts

The preservation of employment contracts being one of the main social concerns, the following measures addressed to businesses were also approved in the above-mentioned regulations.

  1. Promotion of extraordinary aids for the maintenance of employment contracts in companies in a situation of business crisis, which is defined as (i) total stoppage of the company's or establishment's activity resulting from the interruption of global supply chains, the suspension or cancellation of orders, or (ii) abrupt and sharp drop of at least 40% in turnover, in the 60 days preceding the request to the Social Security, as compared to the same period in the preceding year, or, for those who started the activity less than 12 months ago, the average of that period.

  2. The business crisis conditions described in paragraph 1 are evidenced by a declaration from the employer together with a certificate from the company's certified accountant, and businesses must prove the facts on which they base their use of this scheme by means of, for example, accounting balance sheets for the month of the support, as well as for the respective month in the preceding year, Value Added Tax return for the month of the support, among others.

  3. Access to the supporting measures depends on the employer being current in all tax and social security obligations with the Tax and Customs Authority.

  4. The extraordinary support in a situation of business crisis is conditional upon the employer communicating in writing to the workers the decision to apply for such support, indicating the foreseeable duration, after hearing the union representatives and the workers' committees when they exist, and immediately referring the application to the Social Security Institute, I.P. (ISS, I.P.), accompanied by the documents already referred to in §2, as well as the nominative list of the workers covered, with their social security numbers.

  5. During the period of application of this measure, the Social Security ensures a payment covering 70% of two thirds of the gross monthly remuneration of the employee, capped to three guaranteed monthly minimum wages (EUR 1,905.00).

  6. This support has a duration of one month and can exceptionally be extended on a monthly basis, up to a maximum of 6 months.

  7. Companies that do not make use of the financial aid described may have access to an extraordinary aid for part-time vocational training, lasting one month and guaranteed by the Institute for Employment and Vocational Training (IEFP, I.P.), for up to 50% of the gross salary (with reference to each worker), capped to the amount of the minimum guaranteed monthly wage.

  8. An extraordinary financial incentive is created to ensure the normalisation phase of the activity, help companies prevent the risk of unemployment and ensure the maintenance of jobs.

  9. Promotion, in the taxation area, of an exceptional and temporary regime of exemption from payment of social security contributions.

5.2. Measures related to payment terms (Moratorium Regime)

Finally, on March 26, 2020, Decree-Law no. 10-J/2020 ("Moratorium Regime") was published, enacting exceptional measures aimed at protecting families, businesses and charities from the burden of their debt service obligations, creating in particular a moratorium that will apply until September 30, 2020. A special regime for the granting of guarantees by the Portuguese State was also created.

I. Scope of application:

A. The Moratorium Regime applies to all companies that:

  • Have their head offices and conduct their business in Portugal;

  • Are classified as micro, small or medium-sized enterprises in accordance with Recommendation 2003/361/EC of the European Commission of 6 May 2003;

  • Are not, as of 18 March 2020, in arrears or breach of their payment obligations with financial institutions for more than 90 days, or do not meet the materiality criterion set out in Notice of Banco de Portugal No 2/2019 and in Regulation (EU) 2018/1845 of the European Central Bank of 21 November 2018;

  • Are not in a situation of insolvency, suspension of payments of temporary receivership, or as of 18 March 2020 are already under foreclosure by any financial institution;

  • Are current in their obligations before the Tax and Customs Authority and the Social Security, with the debts existing as of March 2020 not becoming due until April 30, 2020 for the purposes hereof.

The measures provided for under the Moratorium Regime will also benefit other companies, regardless of their size, that, as of the release date of the Regime, meet the conditions set in lines a), c), d) and e) above, excluding those belonging to the financial sector.

Under the Moratorium Scheme, the financial sector is considered to include (i) banks, (ii) other credit institutions, (iii) financial corporations, (iv) payment institutions, (v) electronic money institutions, (vi) financial intermediaries, (vii) investment firms, (viii) collective investment undertakings, (ix) pension funds, (x) securitisation funds, (xi) their trading companies, (xii) securitisation companies, (xiii) insurance and reinsurance undertakings and (xiv) public bodies that administer public debt at the national level, operating, according to the law, with the same status as credit institutions.

B. The Moratorium Scheme applies to credit operations granted by credit institutions, credit finance companies, investment firms, leasing and factoring companies, and mutual guarantee companies, as well as branches of credit and financial institutions operating in Portugal.

C. The Moratorium Scheme shall not apply to the following operations:

  • Credit or financing operations intended for the purchase of securities or interest positions in other financial instruments, be they secured by such instruments or not;

  • Loans granted to beneficiaries of special schemes, subsidies or benefits, such as tax benefits, aimed at promoting the establishment of their head office in Portugal, including for investment activities;  

  • Loans granted to companies intended for personal use through credit cards of members of the management or supervisory bodies, staff or other workers.

II. Measures:

A. The Government has approved the granting of moratoria with the following effects:

  • Prohibition of revocation, in whole or in part, of credit facilities in effect and loans already granted, in the amounts contracted as of the date of entry into force of the Moratorium Scheme, during the period in which this measure is in force;

  • Extension, for a term equal to the period of validity of this measure, of all loans having their capital payment at the end of the contract that are in effect on the date of entry into force of the Moratorium Regime, including, under the same terms, all their associated elements, such as interest or guarantees, for instance those provided through insurance or by way of credit securities;

  • Suspension, for loans with instalment repayment of capital or other cash disbursements, during the period in which this measure is in force, of all services of capital, rents and interest planned to become due before the end of this period, automatically extending the schedule of payments for the same length as the suspension, so as to ensure that there are no charges other than those which may arise from the variability of the reference interest rate underlying the contract, extending as well all the elements associated with the contracts covered by the measure, such as guarantees. 

In order to be eligible for the above measures, undertakings shall submit to the lending institution, by physical or electronic means, a declaration of adherence to the application of the moratorium, signed by their legal representatives.

The declaration shall be accompanied by documentation demonstrating that the company is current with all its tax and social contribution obligations.

The institutions shall apply the protective measures referred to in paragraph A above not later than five working days after receipt of the declaration and the documents referred to, effective from the date on which the declaration is submitted.

Should they find that the undertaking do not meet the conditions laid down above, the lending institutions shall inform it within three working days.

Undertakings wishing to benefit from the measures provided for in items (b) and (c) of Section II(A) may, at any time, request that only repayments of principal, or part thereof, be suspended.

Extensions of the payment period referred to in paragraphs (b) and (c) of Section II(A) may under no circumstances result in:

  • Breach of contract;

  • Activation of early repayment clauses;

  • Suspension of the maturity of interest due during the extension period, which shall be capitalised over the amount of the loan with effect on the time at which they become due, applying the contractually agreed interest rate; 

  • Ineffectiveness or termination of guarantees granted by the entities benefiting from the measures or by third parties, in particular the effectiveness and duration of insurance policies, sureties and/or guarantees.

The application of the measures provided for in Section A above to loans backed by financial collateral shall cover the debtor's obligations to restore maintenance margins as well as the creditor's right to enforce “stop loss” clauses.

B. The Moratorium Scheme also implements a special system whereby the State provides personal guarantees, subject to the following terms:

  • The State may provide personal guarantees, within the limits set forth in the State Budget Law for this kind of guarantees, to cover credit operations or other financial operations, in any form, to ensure liquidity or for any other purpose, to companies, private charitable institutions, non-profit associations and other entities of the social economy or any other entity headquartered in the European Union;

  • The request shall be addressed to the member of the Government responsible for the finance area through the Directorate General of Treasury and Finance, detailing the essential elements of the operation to be guaranteed, in particular, the amount and time frame, without prejudice to other elements that may be requested in order to score the risk of the operation and define the conditions of the guarantee to be granted;

  • The request provided for in the preceding paragraph shall be subject to the approval from the member of the Government in charge of the sector of activity of the entity benefiting from the guarantee, focusing on the relevance of the operation within the frame of the Government's policy of response to the national economic emergency situation due to the COVID-19 pandemic, the assessment of the relevance of the beneficiary entity for the national economy, as well as the prospect of economic viability of the company in question and the express need for a personal guarantee from the State.

5.3. Corporate reporting

Decree Law no. 10-A/2020 also approved an extraordinary measure to defer to June 30 the legal or statutory deadline for holding general meetings of companies, associations or cooperatives. Normally, the approval of the accounting documents and, when required, the non-financial statement of commercial companies must take place within three months from the closing date of each financial year, or five months from the same date for companies that must present consolidated accounts or that apply the equity method of accounting, under the terms of the Commercial Companies Code.

5.4. Constraints to the performance of the activity

The Government has also been approving other measures with direct impact on the life and functioning of businesses that condition their activity, such as:

  • Forced closure of a wide range of facilities and establishments listed in Annex I to Decree no. 2-A/2020 of 20 March, including spaces holding recreational, leisure and entertainment activities, cultural and artistic activities, sports activities, activities in public spaces, gaming and betting spaces and restaurant activities (except restaurants that can and intend to remain in operation exclusively for take-away services) in bars every day at 9pm;

  • Restrictions on access and allocation;

  • Suspension of the activity of any other commercial premises or places where services are delivered to the public (with the exception of those linked to wholesale trade), including malls and large shopping centres, and in catering or beverage outlets, with the exception of those engaged in wholesale trade or providing essential goods or other items considered essential in the present scenario, as listed in Annex II to Decree no. 2-A/2020, of March 20. The latter may remain in business, but are not obliged to do so unless specifically determined by the Minister of Economy;

  • Banning events, meetings or gatherings, regardless of the reason or nature, involving 100 or more persons;

  • Suspending regular services, special regular and occasional international passenger transport services, with the exception of excursions by nationals or holders of residence permits in Portugal who have left the country and wish to return;

  • Suspending driving instruction, face-to-face professional certification training and driving tests;

  • Suspending any and all dental, stomatological and dental activities, with the exception of situations proven urgent and unavoidable;

  • Reinstating documentary checks on people at borders.

5.5. Use of telematics at general meetings 

Even before the most recent legislative measures in the context of COVID-19, the Portuguese Commercial Companies Code already allowed holding general meetings of public limited liability companies via telematic means under the terms of article 377, no. 6, paragraph b). This regime allows meetings to be held entirely on a virtual basis, unless the articles of association provide otherwise. The company must guarantee the authenticity of the statements and the security of the communications, recording their content and the respective intervening parties.

This possibility was again addressed in Law no. 1-A/2020, which establishes, in Article 5, that the participation via telematic means, namely video or teleconference, of members of collective bodies of public or private entities in the respective meetings, does not hinder the regular functioning of the body, namely with regard to the quorum and resolutions, but the form of participation must be recorded in the respective minutes.

The Securities Market Commission (the "CMVM"), in its communication published on 20 March, also recommended the full use of telematic means to hold general meetings. If there are operational implications making full use of telematic means impossible, a combination of on-site and off-site resources is recommended.

5.6. Audit activity under COVID-19

Also on March 20, the CMVM issued some recommendations aimed at reducing the impact of the current pandemic on the audit procedures required in this reporting period. Using digital or other alternative means for the collection of evidence about the work done and documents required for the audit is recommended. When auditing the consolidated accounts of a group of entities, the procedures for evaluating the work done by the auditors of the components of the group should also be adapted accordingly.

The CMVM also seeks to stress the importance of cooperation between companies and auditors to facilitate the identification and description, in the most rigorous way possible, of the eventual impact of COVID-19 in the current performance of the company's activity and its continuity. The auditors' work should reflect a rethinking of the main aspects of their activity, in the light of the rapid changes and impacts stemming from OVID-19 - the possible consequences identified should be dealt with under the applicable national and international auditing standards.

However, no change has been introduced so far concerning the postponement of the legal deadline for submission of company accounts.

5.7. Profit distribution under a layoff situation

Decree-Law no. 10-G/2020, aimed ay defining and regulating the terms and conditions for the allocation of aids to workers and businesses affected by the COVID-19 pandemic, establishes, in its article 14 under the heading "non-fulfilment and refund of aids", the immediate cessation of the aids foreseen in the referred Decree-Law should any of the listed situations occur, including the distribution of profits, in any form, namely as withdrawals os account, while the obligations arising from the granting of the incentive remain in force. 

6. Real State and Construction Sector

The Assembly of the Republic, through Law no. 1-A/2020, of March 19 (as amended by Law no. 4-A/2020, of April 6), decreed the suspension, for as long as the measures to prevent, contain, mitigate and treat the epidemiological infection by the SARS-CoV-2 virus and the COVID-19 disease remain in force, as determined by the public health authority and up to 60 days after the cessation of such measures, of:

  • The effect of the complaints made by landlords on housing and non-residential leases;

  • The expiry of housing and non-housing leases, unless the tenant does not object to the termination;

  • The effectiveness of the revocation or opposition to the renewal of residential and non-residential leases made by the landlord;

  • The foreclosure of a mortgage on a property that is the foreclosed party's personal and permanent residence;

  • Eviction proceedings, special eviction procedures and proceedings for delivery of leased property, when the tenant, by virtue of the final judicial decision to be rendered, could be placed in a situation of vulnerability due to lack of home ownership.

Also, the period indicated in Article 1053 of the Civil Code, for the return of the leased premises by the tenant after the expiry of the lease agreement is suspended if the end of that period occurs during the period of time in which said measures are in force.

For its part, through Decree no. 2-A/2020 of March 20, the Government determined that the closure of premises and establishments enforced by the said decree (see above) cannot be invoked as grounds for termination, resolution or any other form of cancellation of non-residential lease contracts or other real estate exploitation schemes, nor as grounds for the obligation to vacate premises in which they are installed.

Subsequently, following a Government bill, the Assembly of the Republic enacted, through Law no. 4-C/2020, of 6 April, an exceptional regime for situations of arrears in the payment of rent due under lease agreements.

The exceptional regime applies to urban housing and non-housing leases as well as, mutatis mutandis, to other types of real estate exploitation agreements (namely, as we understand it, contracts for the use of store spaces in shopping centres and other similar nonstandard contracts).

The law stipulates the following measures:

1 – Housing rentals:

Deferral of payment of rentals becoming due between April 1st, 2020 and the first month following the end of the state of emergency decreed in the country will be allowed, without being subject to the payment of the compensation for delay foreseen in the law (in paragraph 1 of Article 1041 of the Civil Code), nor to any other penalty of a contractual nature for this reason, to housing tenants who, cumulatively:

  • have suffered a drop in their household's income exceeding 20% as compared to the income of the preceding month or the same period in the previous year; and cumulatively,

  • have reached a household's effort rate, calculated as the percentage of the whole household members' income earmarked for rent payment, equal to or greater than 35%.

In the aforementioned cases, tenants who defer payment of the rent for the indicated period must make that payment in full within 12 months from the end of the first month following the end of the state of emergency, in monthly instalments of not less than one twelfth of the total amount, paid together with the rent for each month. In this case, the landlord will not have the right to terminate the lease on the grounds of non-payment of the rent due.

During the validity term of the law, tenants who meet the conditions and wish to benefit from this exceptional regime have the duty to inform the landlord that they are unable to pay the rent, and must do so in writing, up to 5 days before the due date of the first rental period in which they wish to benefit from the scheme, attaching the documentation proving the occurrence of a loss of income exceeding 20% and of an increase in their effort rate as described above. In the case of rentals due on 1 April 2020, the landlord may be notified up to 20 days after the date on which the law comes into force.

The proof of the tenant's income loss shall be made under the terms regulated by Ordinance n. nr. 91/2020, of April 14th, which also clarifies the cases in which the 20% decrease in income and the increase above 35% in the household's effort rate will be applicable for the purposes of the exceptional measures foreseen in Law nr. 4-C/2020, of April 6th: these are the cases of tenants of housing properties that constitute their permanent residence and of students with a lease contract for a housing property located more than 50 km aways from the permanent residence of their family household, for attendance at an educational establishment. The scope of application is also extended to guarantors of housing tenants who are students and do not receive any income from work.

Under the terms of the Ordinance, the loss of income is calculated by comparing the sum of household members' income in the month in which the cause leading to the loss in income occured with the income received by the same household members in the preceding month.

As a proof of income, pay slips or the employer's declaration must be submitted, in the case of employed workers, or, for business or professional income, the corresponding receipts or invoices, as applicable, and a sworn statement may also be submitted for these purposes; also, in the case of pension income, the corresponding proof will be specifically provided by means of the supporting document issued by Social Security.

The ordinance also establishes that those who deliver or sign documents meant to demonstrate the loss of income containing false statements will be liable for the damages that may occur and for the costs incurred in the application of the exceptional measures provided for in Law no. 4-C/2020, of April 6, without prejudice to the criminal liability generated by their conduct.

2 - Financial support in housing leases

Housing tenants, as well as, in the case of students not earning any income from work, their guarantors, who demonstrably have suffered a loss in their household income exceeding 20% and are unable to pay the rent of the dwellings that constitute their permanent residence, can apply to the Institute of Housing and Urban Rehabilitation, I.P. (IHRU), to be granted an interest-free loan to cover the difference between the monthly rent amount due and the amount they can afford according to their income level and that of their household, pursuant to the terms to be regulated by the IHRU. It should be noted that tenants who resort to these loans will not benefit from the right to defer the payment of the rents during the state of emergency and will therefore remain bound to timely honor the corresponding payment.

The Law provides that landlords who (i) have demonstrably suffered a loss of income exceeding 20% of their household's income in relation to the income of the preceding month or the same period of the previous year may also benefit from financial support from the IHRU, provided that (ii) such income loss percentage can be attributable to the non-payment of rents by tenants under the provisions of this Law. Unless the respective tenants have themselves resorted to a loan from the IHRU under the terms referred to above (in which case they will remain obliged to pay the rents on time), the landlords in that situation may resort to the IHRU to be granted an interest-free loan to offset the amount of the monthly rent, due and unpaid, whenever the remaining disposable income of their household falls, for such reason, below the amount of the Social Aid Index (IAS, currently 438.81). The proof of the loss of income suffered by landlords in this situation required for them to be eligible for the financial aid from the IHRU is also regulated in Ordinance no. 91/2020, of 14 April.

3 - Lease for non-residential purposes (and other contractual forms of real estate exploitation):

The deferral of rentals due between April 1st and the first month following the end of the state of emergency enacted in the country, without being subject to the payment of compensation for late payment or any other contractual penalty for this reason, will also be allowed to tenants holding:

a) Establishments open to the public for retail trade and service provision activities that are closed or have their activities suspended under Decree nr. 2-A/2020, of March 20th, or by legislative or administrative decision, under the terms of Decree-Law nr. 10-A/2020, of March 13th, or under the Basic Law of Civil Protection, approved by Law nr. 27/2006, of July 3, as well as the Basic Health Law, as approved by Law no. 95/2019, of September 4, as well as other provisions aimed at the implementation of the state of emergency, including those cases in which they keep on providing electronic commerce activities, or remotely delivered or online services; and

b) Catering and similar establishments, including those that continue to operate for the exclusive purpose of preparation of products intended for consumption outside the establishment or for home delivery, under the terms of Decree no. 2 A/2020, of March 20, or any other provision that so allows.

Tenants who defer the payment of rents in respect of the period indicated must pay such rents, in full, within 12 months from the end of the first month following the end of the state of emergency, in monthly instalments of not less than one twelfth of the total amount, paid together with the rent for each month.

The failure to pay rents due by the first month following the end of the state of emergency may not be invoked as a reason for cancellation, rescission or other form of termination of contracts, nor as a reason for the obligation to vacate buildings in which they are installed.

7. Taxes, Social Contributions and Tax Litigation

7.1. Taxes

The Government presented at the extraordinary meeting of the Permanent Commission for Social Dialogue (CPCS) a set of measures aimed at minimising the impact of COVID-19 on the Portuguese economy.

In tax matters, the following measures stand out:

  1. Deferral of the first special advance payment (PEC) from March 31 to June 20;

  2. Extension of the deadline for submitting the Model 22 declaration from 31 May to 31 July;

  3. Extending the deadline for the first payment on account (PC) from July 31 to August 31;

  4. Strengthening information through electronic services that can be used by taxpayers as an alternative to be attending in person to the finance services.

Decree-Law no. 10-F/2020 of 26 March added the following measures, which will remain in force until the end of June, in order to comply with the Government's aim of improving the liquidity conditions of employers.

These measures apply to the following taxpayers: taxpayers who obtained a turnover of up to (euro) 10,000,000.00 in 2018, or whose activity falls within the sectors listed in Article 7 of Decree no. 2-A/2020 of 20 March, as currently worded, or who started their activity on or after January 1, 2019.

  1. Possibility of paying tax and corporate income tax withholdings to the State in three (3) or six (6) monthly instalments, with no interest, with the first one becoming due on the date on which the withholding obligation is fulfilled and the rest of instalments on the same day of the following months;

  2. Taxpayer's right to deduct VAT under the same conditions as mentioned in the preceding paragraph;

  3. The payments in instalments referred to in the preceding paragraphs must be applied for by electronic means, and will not require to be backed by a guarantee.

Taxpayers not covered by this scheme may still make use of it provided that they show, through a certification issued by a certified auditor or accountant, a reduction in the turnover communicated through the e-billing system of at least 20 % in average over the three months preceding the month in which this obligation exists, compared with the same period of the previous year.

As regards the tax benefits associated to taxes that constitute the municipalities' own revenue, Law no. 6/2020, of April 10, relaxed the regulatory rules governing the terms under which municipalities may recognize such benefits. In particular, the pre-existence of regulations approved by the municipal assembly, as a requisite for the recognition of those benefits, is waived, provided that the duration of the benefits does not extend beyond the current calendar year.

7.2. Social Contributions 

The aforementioned Decree-Law no. 10-F/2020 also enacted a set of measures aimed at deferring the payment of social contributions.

The scope of these measures includes employers in the private and social sectors who, as of February 2020, have (a) less than 50 employees, (b) more than 50 and less than 249 employees, having experienced a drop of at least 20% in turnover as reported through the e-billing system in March, April and May 2020, compared to the same period of the previous year or, for those who started their activity less than 12 months ago, to the average of the elapsed period of activity, (c) 250 or more workers as long as it is a private charity or similar institution, or if the activity of these employers falls within the sectors listed in Article 7 of the Directive. (d) 250 or more workers provided that the activity of these employers falls within the sectors listed in Article 7 of Decree no. 2-A/2020, of March 20, or in the aviation and tourism sectors, provided they suffered a drop of at least 20% in the turnover reported through the e-billing in the months of March, April and May 2020, compared to the same period of the preceding year or, for those who started the activity less than 12 months ago, to the average of the period of activity that has elapsed. Self-employed workers can also benefit from these measures.

The approved measures cover three major groups: (a) deferment of payment of social security contributions; (b) suspension of benefit plans and execution procedures; (c) extraordinary extension of social benefits.

(a) deferment of payment of contributions

In essence, employers are expected to pay social contributions due from March to September 2020 in instalments, with the first third of the amount being paid in the month in which it is due, and the remainder in 3 or 6 months, starting in July, with no interest applied.

No application needs to be filed to benefit from this extraordinary deferred payment scheme: entities using it will only need to indicate in July the number of instalments that will follow. Also in July, the entities whose access to this scheme depends on the drop in turnover must present the respective proof and certification from the certified accountant.

(b) Suspension of instalment plans and execution procedures

The suspension of instalment plans, both within and outside the scope of tax execution procedures, is maintained until June 30, regardless of the eventual termination of the exceptional regime on an earlier date.

(c) Extraordinary extension of social benefits

This measure provides for the extension until 30 June of unemployment benefits and all social security system benefits that guarantee minimum subsistence levels that expire or are renewed until that date.

7.3. Tax litigation

In the tax litigation area, measures similar to those sought by the Superior Council of the Magistracy are immediately adopted, and the Superior Council of Administrative and Tax Courts has also recommended that [Offcial Statement 2/2020]:

  1. Judges should perform the procedural acts from their personal residences, via SITAF, and should not schedule non-urgent proceedings until the end of April;

  2. Judges of the administrative and tax courts, until 31 March 2020, shall only carry out acts and procedural steps of a face-to-face nature in cases of an urgent nature in which rights, freedoms and guarantees are at stake, cancelling all others scheduled until that date, at which time a reassessment of the situation shall be made.

In the context of tax litigation, the provisions of the aforementioned Decree-Law no. 10-A/2020 also apply, namely with regard to the justifiable reasons criteria, justification of absences and postponement of procedural and procedural steps, as well as the suspension of the time limit for the performance of a proceeding or procedural act in the event of closure of premises.

Also in this matter, the time limits for the performance of the procedural steps required to be taken in proceedings before tax courts, arbitration courts and tax enforcement agencies are suspended, pursuant to the terms of Law no. 1-A/2020 of March 10, as amended by Law no. 4-A/2020 of April 6. Such terms shall remain suspended until the exceptional regime to which reference was made ends.

The rules approved in this law concerning the suspension of limitation and forfeiture periods, which extend to all types of proceedings and procedures, as well as the rules concerning urgent procedures, also apply in the area of tax litigation.

Under the terms of this Law, the administrative and tax deadlines were already suspended in the original drafting, and the wording now in force maintains such suspension, considering that the deadlines for procedural steps by private individuals relating to tax procedures are suspended. The breadth of scenarios covered by the regulation will be maintained, including judicial challenges, appeals for reversal, hierarchical recourses, or other procedures of the same nature, as well as, of course, requests for establishment of an arbitration tribunal, along with the subsequent proceedings and procedural steps.

According to Decree-Law Nº 10-F/2020 as described above, tax execution processes linked to debts associated to Social Security contributions are suspended until 30th June, in the event that the judicial vacations scheme provided for in clause 7 of Decree-Law º-A/2020, also mentioned above, expires before that date.

As regards the services of the Tax and Customs Authority, they are reachable through the Finance Portal ( or, in case of difficulty in using those electronic services, through the Call Centre of the Tax Authority, reachable via phone number +351 217 206 707.

For face-to-face service, the taxpayer must make a prior appointment and attend the services only on the day and time scheduled.

As another measure to prevent propagation of COVID-19, the Administrative Arbitration Centre has determined the closure of its facilities in compliance with the measures decreed under the State of Emergency, ensuring their full online operation. Thus, during this period, the call centre, the Procedural Management System, the Case Law Consultation, the Electronic Mail and the Platform for requests for the establishment of arbitration courts will continue to operate at full capacity.

8. Inventory of main regulations and decisions (reference)

Also available in the Official Gazette of the Republic.




Rui Valente


Lino Torgal


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