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Examples of Portuguese beneficial tax regimes

This information is based on the tax legislation in force at 29 November 2017. However, the information is general in nature and therefore we recommend that you seek professional advice before making any decision in this area.

Beneficial tax treatment for pensions and other life insurance products (including unit linked) may further significantly reduce the effective tax burden on capital invested.

Examples of Portuguese beneficial tax regimes, include:

 

1.

Since 2009 there has been a 20% flat rate for certain Portuguesesource income (employment and self-employment income), and an exemption for almost all foreign source income, available to non habitual residents.

2.

A tax exemption for gifts or inheritances to spouse, descendants or ascendants. Inheritance or gifts to other individuals will be either not taxable, due to the generous territoriality rules, or subject to a flat 10% stamp tax rate.

3.

No wealth tax and free remittance of funds either to Portugal or abroad. Nil taxation on dividends with proper planning or otherwise a 28% flat tax rate will apply. Tax credit for international double taxation may be available.

4.

Beneficial tax treatment for pensions and other life insurance products (including unit linked) may further significantly reduce the effective tax burden on capital invested.

5.

Companies licensed to operate in the Madeira International Business Centre (MIBC), including branches of non-resident entities, with a licensed issued until 31 December 2020, benefit from a 5% CIT rate until 31 December 2027.

6.

The reduced CIT rate applies on income derived from transactions with non-residents (or with other MIBC entities), limited to thresholds of taxable income and depending on the creation of jobs. The MIBC special tax regime also provides for generous benefits regarding withholding taxes on dividends, interest, royalties and services.

7.

Portuguese companies may take advantage of EU non discrimination rules and EU Directives on mergers, dividends, interest and royalties, as well of Portuguese double tax treaties.

8.

Portugal has signed more than 60 double tax treaties, including with Malta, Macao and Hong Kong, as well as more than 50 investment protection agreements. It has more than 15 tax information exchange agreements signed (most of which are already in force) e.g., Bermudas, Cayman and Guernsey, and several social security agreements, offering interesting opportunities in a tax friendly environment.

Contacte-nos

Rosa Areias

Rosa Areias

Tax Lead Partner, Membro da Comissão Executiva, PwC Portugal

Tel: +351 225 433 101

Leendert Verschoor

Leendert Verschoor

Transfer Pricing Partner, PwC Portugal

Tel: +351 917 887 221

Bruno Andrade Alves

Bruno Andrade Alves

Individuals Taxation Partner, PwC Portugal

Tel: +351 213 599 671

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