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The 2024 State Budget Law, which entered into force on 1 January 2024, has introduced the following amendments to the taxation of stock option generated gains:
- To extend the regime to gains derived from plans created by entities recognized as startups and that have created the stock options plan in the year of their incorporation/first year of business (provided the other requirements are met).
- To remove the restrictions on the access to the regime for members of corporate bodies.
- Income calculated at the time the taxpayer ceases to be a Portuguese resident ("Exit Tax") shall be partially exempt from Personal Income Tax (IRS) up to a value of 20 times the Social Support Index (IAS - Indexante dos Apoios Sociais). Income is aggregated for the purposes of determining the rate to be applied to other income. Taxpayers may only benefit from this exemption once.
- To clarify that this regime applies to stock or similar plans created by other entities with which the employer has a controlling, group or simple participation relationship.
Furthermore, the State Budget establishes that employees holding stock that was exempt from personal income tax under the former regime on the date of entry into force of the 2024 State Budget shall be entitled to benefit from the exemption from personal income tax, provided they hold the stock for at least 2 years from the date they exercised their option or subscribed to it.
Finally, the law establishes that gains:
- resulting from the sale for consideration of stock or similar rights;
- resulting from plans that have benefited from the IRS exemption under the former regime; and
- acquired before the entry into force of the 2024 State Budget;
are taxed under G category, calculated as the positive difference between the realization value and the market value on the date the option or right was acquired.