## [Portugal: The PIT framework of teleworking expenses was clarified](/en_GB/new/portugal-pit-framework-teleworking-expenses-was-clarified) # Portugal: The PIT framework of teleworking expenses was clarified Portugal - 01 / 25 / 2023 Portugal Tax Alert - - [](https://www.linkedin.com/sharing/share-offsite/?url=https://www.garrigues.com/en_GB/new/portugal-pit-framework-teleworking-expenses-was-clarified) - []() - []() Previous Next **Law no. 83/2021, of 6 December, amended the Labour Code with regard to the teleworking regime, now imposing employers to mandatorily bear the costs incurred by employees in this context, establishing in particular the following:** - The employer must fully compensate the employee for all "additional expenses" incurred with the teleworking regime, that is, the expenses incurred with the acquisition or use of equipment and computer or telematic systems necessary to carry out the work, including the addition of costs of energy and the network installed in the workplace at speed conditions compatible with the service communication needs, as well as the maintenance costs of equipment and systems; - "Additional expenses" refer to the acquisition of goods and/or services that the employee did not have before the conclusion of the agreement established between the employee and the employer regarding the telework, as well as the expenses calculated by comparing the employee's homologous expenses in the same month of the last year prior to the application of that agreement; - Compensation payment is due immediately after expenses are incurred by the employee; - Compensation is considered, for tax purposes, as a cost for the employer and does not constitute employment income. As a result of these law amendments, several doubts have been raised about the tax framework of this compensation. Hence, [Circular Letter No. 20249, of January 18, 2023](https://info.portaldasfinancas.gov.pt/pt/informacao_fiscal/legislacao/instrucoes_administrativas/Documents/Oficio_Circulado_20249_2023.pdf), now clarifies the respective tax implications depending on whether the employee holds or does not hold any evidence that he/she has borne such expenses. When the employee proves that he/she has supported such additional expenses, the aforementioned Circular Letter determines the following: - They should not be considered as employment income for Personal Income Tax (“IRS”) purposes; - These expenses are determined comparing the employee's homologous costs incurred in the same month of the last year prior to the application of that agreement, upon presentation of corresponding supporting documents referring to each of the mentioned months. Such invoice must indicate, unequivocally, that it concerns to the place of teleworking that was identified in the agreement signed with the employer, although it is not required that the employee appears in such invoice; - The document proving payment of “additional expenses” must be verified by salary processing or by an identical document, this being the tax relevant document for the employer; - These “additional expenses” must be reported in the Monthly Declaration of Remuneration (“DMR”) as non-subject to taxation employment income (code A23). If the worker does not prove that he/she has borne the abovementioned expenses or in the event of a fixed amount being agreed without connection to any document supporting that such expenses have been effectively incurred: - They should be considered employment income subject to IRS; - They should be reported as such in DMR form (code A). 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