Article by PLMJ Tax Practice AreaInternational double taxation is an obstacle to trade relationsand to the free movement of goods, services, people and capital.The need to eliminate this obstacle has become more acute in thecurrent context, dominated by new technologies and by the internet.By regulating the right of the countries involved to levy taxes, itis possible to avoid the relocation of income and capital to othercountries merely for tax purposes and boost (economic and other)ties between the countries in question.Over the years, Portugal has signed fifty-two double taxtreaties for the avoidance of double taxation on income tax,following the OECD Model Convention, with some reservations whichare aimed essentially at ensuring a broader concept of permanentestablishment and seek to raise the level of taxation in the sourcecountry with regard to dividends, interest and royalties. As arule, the method used in the concluded treaties is that of theordinary tax credit, although it should be noted that in some ofthe treaties, provision has been made for a matching credit ortax-sparing credit.By circular issued on 13 March 2009 (No. 20137), theInternational Relations Services Department of theDirectorate-General of Taxation again released the official list ofall the international double tax treaties entered into by Portugal.The reason behind this release is that traders need up-to-dateinformation about the existing agreements and the legal instrumentswhich preceded their publication, the date on which they came intoforce and easy access to the rates of tax for situations wherewithholding tax is partially waived.The treaties concluded by Portugal in accordance with this OECDmodel come into play only when those paying the income have thenecessary forms for this purpose (21-RFI to 24-RFI), duly completedand authenticated by the respective tax authorities. These formsreplaced the old forms (7-RFI to 18-RFI) in 2008. However,according to Circular No. 5/2008, of 7 March, issued in themeantime by the International Relations Services Department of theDirectorate-General of Taxation, the Portuguese and Spanishversions of forms (7-RFI to 18-RFI) will remain in force until thenew forms in these two languages have been approved, in view of thefact that internal legislation obliges the respective tax authorityto certify only documents drawn up in Spanish.The following table lists the treaties for the avoidance ofdouble taxation entered into by Portugal and published by the taxauthorities:COUNTRIES(alphabeticalorder)LEGAL INSTRUMENTEXCHANGE OF RATIFICATIONINSTRUMENTS/ ENTRY INTO FORCEREDUCTION RATEDIVIDENDSINTERESTROYALTIESArticleRateArticleRateArticleRateALGERIAParliamentary Resolution No.22/06 of 23 MarchNotice 579/2006 published on05-05-2006IN FORCE SINCE 01-05-2006 1010% m)15% b)1115%1210%AUSTRIADL 70/71of 8 MarchNotice published on 08-02-1972IN FORCE SINCE28-02-19721015%1110%125% b)10%c)BELGIUMDL 619/70,of 15 December Additional Convention (Parl. Res. No. 82/00of 14 December)Notice published on 17-02-1971IN FORCE SINCE19-02-1971Additional Convention IN FORCE SINCE 05-04-20011015%1115%1210%BRAZILd)Parliamentary Resolution No. 33/01 of 27 AprilNotice published on 14-12-2001IN FORCE SINCE05-10-2001effective from 01-01-20001010% m)15% b)1115%12.15%BULGARIAParliamentary Resolution No.14/96 of 11 AprilNotice 258/96published on 26-08-1996IN FORCE SINCE18-07-19961010% e)15% b)1110%1210%CANADAParliamentary Resolution No. 81/00 of 6 DecemberNotice published on 17-10-2001IN FORCE SINCE24-10-20011010% m)15% b)1110%1210%CAPE VERDEParliamentary Resolution No. 63/00 of 12 JulyNotice 4/2001 published on 18-01-2001IN FORCE SINCE15-12-20001010%1110%1210%CHILEParliamentary Resolution No. 28/06 of 6 AprilNotice 243/2008 published on 29-12-2008IN FORCE SINCE25-08-20081010% f)15% b)115% r)10% r)15% b)125% r)10% r)CHINAParliamentary Resolution No. 28/2000 of 30 MarchNotice 109/2000 published on 02-06-2000IN FORCE SINCE08-06-20001010%1110%1210%CUBAParliamentary Resolution No. 49/01 of 13 JulyNotice 187/06, published on 23-01-2006 (and Notice 279/05 of29-07-2005)IN FORCE SINCE 28-12-05105% f)10% b)1110%1215%CZECH REPUBLICParliamentary Resolution 26/97, of 9 MayNotice 288/97, published on 08-11-1997IN FORCE SINCE01-10-19971010% e)15% b)1110%1210%DENMARKParliamentary Resolution No. 6/02 of 23 FebruaryNotice 53/2002, published on 15-06-2002IN FORCE SINCE24-05-2002effective from01-01-031010%1110%1210%ESTONIAParliamentary Resolution No. 47/04 of 8 JulyNotice 175/04published on 27-11-2004IN FORCE SINCE 23-07-2004effective from01-01-051010%1110%1210%FINLANDDL 494/70, of 23 OctoberNoticepublished on 22-08-1980IN FORCE SINCE14-07-19711010% f)15% b)1115%1210%FRANCEDL 105/71of 26 MarchNotice published on13-11-1972IN FORCE SINCE18-11-19721115%1210% h)12% b)135%GERMANYLaw 12/82of 3 JuneNotice published on 14-10-1982IN FORCE SINCE08-10-19821015%1110% a)15% b)1210%GREECEParliamentary Resolution No. 25/02 of 4 AprilNotice 85/2002, published on 24-09-2002IN FORCE SINCE13-08-2002effective from01-01-031015%1115%1210%HOLLANDParliamentary Resolution No. 62/00 of 12 JulyNotice 177/2000published on 24-08-2000IN FORCE SINCE11-08-20001010%1110%1210%HUNGARYParliamentary Resolution No. 4/99 of 28 JanuaryNotice 126/2000published on 30-06-2000IN FORCE SINCE08-05-200010%10% e)15% b)1110%1210%INDIAParliamentary Resolution No. 20/2000 of 6 MarchNotice 123/2000published on 15-06-2000IN FORCE SINCE05-04-200010%10% m)15% b)1110%1210%INDONESIAParliamentary Resolution No. 64/2006, of 6 DecemberNotice 42/2008, published on 04-04-2008IN FORCE SINCE11-05-200710%10%1110%1210%ICELANDParliamentary Resolution No. 16/02, of 8 MarchNotice 48/2002, published on 08-06-2002IN FORCE SINCE11-04-2002effective from01-01-031010% m)15% b)1110%1210%IRELANDParliamentary Resolution No. 29/94, of 24 JuneReview Protocol - Parl. Res.No. 62/2006,of 06-12-2006Notice 218/94published on 24-08-1994IN FORCE SINCE11-07-1994Notice 45/2008, published on 17-04-2008 – ReviewProtocolIN FORCE SINCE18-12-20061015%1115%1210%ISRAELParliamentary Resolution No. 02/08 of 15 JanuaryNotice 94/2008, published on 13-06-2008and rectified by Notice 129/2008 published on 22-07-2008IN FORCE SINCE18-02-2008...
International Double Taxation In Portugal
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