CAE codes will change to reflect new economic activities

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New CAE codes will be introduced in January . The structural, scientific and technological developments of recent decades have given rise to new economic activities and changed the economic and social reality. The information technology sector, in particular, has been one of the sectors that has contributed most to this change.

Carried out to reflect this new reality, the revision of the European classification of economic activities (NACE Rev. 2.1.) will start to be applied on 1 January 2025. As a consequence, a new version of the Portuguese Classification of Economic Activities (CAE Rev. 4) will also emerge , replacing the current version (CAE Rev. 3).

By November 30, 2024 , companies must convert their activity hong kong whatsapp number database in CAE Rev.3 to the new CAE Rev.4 codes that best describe their activity. We explain how to do this below.

What is CAE and what is it for?
Whenever a company is created or a professional activity begins as a self-employed worker, one of the obligations is to indicate to the Tax Authority (AT) the appropriate CAE for the activities that will be carried out.

These codes are defined in the Portuguese Classification of Economic Activities by Branches of Activity. In addition to providing correct classification for statistical purposes, which enables comparison at national, EU and global level, the CAE is essential for the AT to correctly classify entities for certain taxes. It allows the AT to understand how to tax entities and determine which activities they can carry out.

It is simultaneously used to classify expenses in e-Fatura, promotes the licensing of economic activities and enables the granting of incentives that the State understands to give to economic activities.

However, the classification of economic activities is not limited to the national level, with the following classifications existing:

National classification - CAE - Classification of Portuguese Economic Activities by Branches of Activity;
International Classification - CITA - International Type Classification, by Industry, of all Branches of Economic Activity
European classification - NACE - General Classification of Economic Activities of the European Communities.
The European classification in force since 2008 was NACE Rev. 2, in force by means of Regulation (EC) No. 1893/2006 of 20 December 2006. In Portugal, Decree-Law No. 381/2007 of 14 November was published, giving rise to CAE-Rev.3.

More recently, Regulation 2023/137 of 10 October 2022 came into force, replacing NACE Rev. 2 with NACE Rev. 2.1. It has been in force since February 2023, but its applicability date has been deferred to 1 January 2025 , with a series of specific derogations depending on the area. In Portugal, it gave rise to CAE Rev 4.

CAE Rev.4: why this revision?
On the one hand, this change has taken place so that companies, financial institutions, public administrations and other economic market operators have access to reliable and comparable statistical data in order to be able to assess their competitiveness. These statistics also help the European Union to prevent dysfunctional competition.

On the other hand, since 2008, the economic and social reality has changed considerably. In fact, the structural, scientific and technological developments that we have witnessed have given rise to new economic activities. Phenomena such as globalization and digitalization have changed the way in which many goods and services are provided, and there is no doubt that new activities have emerged that have assumed a relevant role in the global economy, while others have lost that importance.

One of the sectors that contributed most to the need for this change was the information technology sector, where transformations are occurring in large numbers and at an accelerated pace. Note the phenomenon of the mass use of the internet, the emergence and democratization of access to social networks, the explosion of e-commerce and other changes that several startups and technology companies have helped to drive over the last 20 years.

There has also been a greater awareness and sensitivity to the impact of the economy on the environment, with several activities emerging that aim to preserve and conserve it.

Therefore, it was necessary to update NACE to reflect the new reality and, as a consequence, the CAEs also had to be revised. In Portugal, Deliberation No. 1346/2024 of October 16 was published, approving the new Portuguese Classification of Economic Activities, Revision 4 (CAE-Rev. 4), which will come into force on January 1, 2025.

What should companies do to ensure conversion to CAE Rev.4?
Until CAE Rev.4 comes into force, companies must carry out the conversion, choosing the code or codes that best apply to their activity. They can choose up to 20 codes (one main and 19 secondary).

If in doubt, you can consult the conversion tables on the INE portal.

Confirmation or change of economic activity is made through an online survey sent to companies by AT and which must be answered by the end of November 2024.

To respond you must follow these steps:

Access IRCAE.INE.PT with your NIF and password to access the Finance Portal;
Consult current CAE codes (CAE Rev.3);
Choose the CAE Rev.4 codes that best suit the activity you perform.
After submitting your answer, you can obtain a summary/proof in PDF format.

If you have not received the email from AT, you can check your CAE code or codes at IRCAE.INE.PT , adjust the framework to the new CAE(s) and obtain the respective proof in PDF.

From 2025 onwards, the CAE Rev.4 codes indicated in the IRCAE survey will be automatically updated in the official records (Tax Authority, National Institute of Statistics and Institute of Registries and Notaries) and reflected in all interactions with these entities.

Support of information systems in the review of the CAE
The CAE is used in a series of Declarations and legal obligations applicable to companies, including the IES (Simplified Business Information) or the Single Report.

Therefore, it is essential that companies are aware of this issue and use information systems that comply with or allow them to comply with new European and national legislation and help them comply with these obligations so that their day-to-day activities are simplified.

Cegid Primavera solutions are constantly updated to ensure that your business is always in compliance with current regulations.