GRACE: Legislative Contributions to the Social Economy
As part of its Public Policy and Compliance cluster, GRACE - Responsible Companies recently developed four Position Papers dedicated to structuring issues for the legal-institutional framework of Social Economy organizations. These documents are the result of in-depth technical work carried out by various law firms and companies' legal departments, reflecting a cross-cutting analysis of existing constraints and proposing concrete legislative solutions. GRACE had the opportunity to present these proposals to the Secretary of State for State Reform, reinforcing its commitment to contributing to public policies that are more efficient, fair and in line with current reality.
The Paper on the Legal Framework for Raising Revenue identifies the difficulties arising from the application of Decree-Law 87/99, pointing out that the regime is outdated in the face of digital reality and the current needs of the social sector. Among the main problems pointed out are the requirement for prior authorization for fundraising campaigns, excessively rigid deadlines, the short validity of authorizations, disproportionate demands for accountability and the imposition of high and inappropriate fines. The paper proposes eliminating, or at least severely restricting, the authorization regime, administrative simplification through digital platforms, the adoption of an annual accountability model and a review of the sanctions regime, in line with best European practices.
Paper proposing an amendment to the Procedural Costs Regulation (CPR) focuses on Article 4(1)(f) of the Procedural Costs Regulation, arguing that the current regime creates uncertainty, unequal treatment and procedural delays for legal persons of public utility. Currently, these entities do not automatically benefit from exemption from costs, forcing the courts to check on a case-by-case basis whether the action falls within their "special attributions", which leads to disparate decisions and lengthy procedures. GRACE proposes that all legal persons of public utility - regardless of how they obtained the status - should now expressly benefit from the exemption, guaranteeing greater legal certainty, speed and consistency in the application of the law.
Paper proposing harmonization between the IRC Code and the Tax Benefits Statute analyzes the differences between the tax regime applicable to legal persons with public utility status in the Corporate Income Tax Code and the Tax Benefits Statute. The lack of harmonization creates obstacles to obtaining tax exemptions and granting donations by patrons, creating insecurity and reducing the financing capacity of these entities. The paper proposes aligning the criteria applicable to the IRC exemption and the patronage regime, clarifying that the income and donations covered are those directly intended for the pursuit of the statutory purposes of public benefit entities. This change aims to simplify procedures, increase patron confidence and strengthen the financial sustainability of organizations.
The paper proposes a Registration and Permanent Certificate for Associations presents a proposal to reformulate the registration system and permanent certificate for associations in Portugal. Currently, there are two separate and parallel systems: the commercial register (limited to associations with public utility status already registered before July 2021) and the Central File of Legal Persons (FCPC) (applicable to all associations, but with limited information). GRACE argues that this duplication creates confusion, disperses information, creates inefficiencies and does not meet the need for transparency and streamlined procedures. It is therefore proposed that all associations be subject to the Commercial Registry Code, regardless of whether they have public utility status, allowing for centralized registration and the issuing of permanent online certificates with essential information such as NIPC, company name, registered office, governing bodies, form of obligation and corporate purpose. This solution would facilitate bureaucratic processes such as opening bank accounts, applying for public tenders and other formal acts, promoting greater efficiency and transparency in the Portuguese third sector.
Maria João Santos
Collaboration & Influence - GRACE Responsible Companies
