International Double Taxation In Portugal

Profession:PLMJ
 
FREE EXCERPT

Article by PLMJ Tax Practice Area

International double taxation is an obstacle to trade relations

and to the free movement of goods, services, people and capital.

The need to eliminate this obstacle has become more acute in the

current context, dominated by new technologies and by the internet.

By regulating the right of the countries involved to levy taxes, it

is possible to avoid the relocation of income and capital to other

countries merely for tax purposes and boost (economic and other)

ties between the countries in question.

Over the years, Portugal has signed fifty-two double tax

treaties for the avoidance of double taxation on income tax,

following the OECD Model Convention, with some reservations which

are aimed essentially at ensuring a broader concept of permanent

establishment and seek to raise the level of taxation in the source

country with regard to dividends, interest and royalties. As a

rule, the method used in the concluded treaties is that of the

ordinary tax credit, although it should be noted that in some of

the treaties, provision has been made for a matching credit or

tax-sparing credit.

By circular issued on 13 March 2009 (No. 20137), the

International Relations Services Department of the

Directorate-General of Taxation again released the official list of

all the international double tax treaties entered into by Portugal.

The reason behind this release is that traders need up-to-date

information about the existing agreements and the legal instruments

which preceded their publication, the date on which they came into

force and easy access to the rates of tax for situations where

withholding tax is partially waived.

The treaties concluded by Portugal in accordance with this OECD

model come into play only when those paying the income have the

necessary forms for this purpose (21-RFI to 24-RFI), duly completed

and authenticated by the respective tax authorities. These forms

replaced the old forms (7-RFI to 18-RFI) in 2008. However,

according to Circular No. 5/2008, of 7 March, issued in the

meantime by the International Relations Services Department of the

Directorate-General of Taxation, the Portuguese and Spanish

versions of forms (7-RFI to 18-RFI) will remain in force until the

new forms in these two languages have been approved, in view of the

fact that internal legislation obliges the respective tax authority

to certify only documents drawn up in Spanish.

The following table lists the treaties for the avoidance of

double taxation entered into by Portugal and published by the tax

authorities:

COUNTRIES

(alphabetical

order)

LEGAL INSTRUMENT

EXCHANGE OF RATIFICATION

INSTRUMENTS/ ENTRY INTO FORCE

REDUCTION RATE

DIVIDENDS

INTEREST

ROYALTIES

Article

Rate

Article

Rate

Article

Rate

ALGERIA

Parliamentary Resolution No.22/06 of 23 March

Notice 579/2006 published on

05-05-2006

IN FORCE SINCE

01-05-2006

10

10% m)

15% b)

11

15%

12

10%

AUSTRIA

DL 70/71

of 8 March

Notice published on 08-02-1972

IN FORCE SINCE

28-02-1972

10

15%

11

10%

12

5% b)

10%c)

BELGIUM

DL 619/70,

of 15 December Additional Convention (Parl. Res. No. 82/00

of 14 December)

Notice published on 17-02-1971

IN FORCE SINCE

19-02-1971

Additional Convention IN FORCE SINCE 05-04-2001

10

15%

11

15%

12

10%

BRAZIL

d)

Parliamentary Resolution No. 33/01 of 27 April

Notice published on 14-12-2001

IN FORCE SINCE

05-10-2001

effective from 01-01-2000

10

10% m)

15% b)

11

15%

  1. 15%

    BULGARIA

    Parliamentary Resolution No.14/96 of 11 April

    Notice 258/96

    published on 26-08-1996

    IN FORCE SINCE

    18-07-1996

    10

    10% e)

    15% b)

    11

    10%

    12

    10%

    CANADA

    Parliamentary Resolution No. 81/00 of 6 December

    Notice published on 17-10-2001

    IN FORCE SINCE

    24-10-2001

    10

    10% m)

    15% b)

    11

    10%

    12

    10%

    CAPE VERDE

    Parliamentary Resolution No. 63/00 of 12 July

    Notice 4/2001 published on 18-01-2001

    IN FORCE SINCE

    15-12-2000

    10

    10%

    11

    10%

    12

    10%

    CHILE

    Parliamentary Resolution No. 28/06 of 6 April

    Notice 243/2008 published on 29-12-2008

    IN FORCE SINCE

    25-08-2008

    10

    10% f)

    15% b)

    11

    5% r)

    10% r)

    15% b)

    12

    5% r)

    10% r)

    CHINA

    Parliamentary Resolution No. 28/2000 of 30 March

    Notice 109/2000 published on 02-06-2000

    IN FORCE SINCE

    08-06-2000

    10

    10%

    11

    10%

    12

    10%

    CUBA

    Parliamentary Resolution No. 49/01 of 13 July

    Notice 187/06, published on 23-01-2006 (and Notice 279/05 of

    29-07-2005)

    IN FORCE SINCE 28-12-05

    10

    5% f)

    10% b)

    11

    10%

    12

    15%

    CZECH REPUBLIC

    Parliamentary Resolution 26/97, of 9 May

    Notice 288/97, published on 08-11-1997

    IN FORCE SINCE

    01-10-1997

    10

    10% e)

    15% b)

    11

    10%

    12

    10%

    DENMARK

    Parliamentary Resolution No. 6/02 of 23 February

    Notice 53/2002, published on 15-06-2002

    IN FORCE SINCE

    24-05-2002

    effective from

    01-01-03

    10

    10%

    11

    10%

    12

    10%

    ESTONIA

    Parliamentary Resolution No. 47/04 of 8 July

    Notice 175/04

    published on 27-11-2004

    IN FORCE SINCE 23-07-2004

    effective from

    01-01-05

    10

    10%

    11

    10%

    12

    10%

    FINLAND

    DL 494/70, of 23 October

    Notice

    published on 22-08-1980

    IN FORCE SINCE

    14-07-1971

    10

    10% f)

    15% b)

    11

    15%

    12

    10%

    FRANCE

    DL 105/71

    of 26 March

    Notice published on

    13-11-1972

    IN FORCE SINCE

    18-11-1972

    11

    15%

    12

    10% h)

    12% b)

    13

    5%

    GERMANY

    Law 12/82

    of 3 June

    Notice published on 14-10-1982

    IN FORCE SINCE

    08-10-1982

    10

    15%

    11

    10% a)

    15% b)

    12

    10%

    GREECE

    Parliamentary Resolution No. 25/02 of 4 April

    Notice 85/2002, published on 24-09-2002

    IN FORCE SINCE

    13-08-2002

    effective from

    01-01-03

    10

    15%

    11

    15%

    12

    10%

    HOLLAND

    Parliamentary Resolution No. 62/00 of 12 July

    Notice 177/2000

    published on 24-08-2000

    IN FORCE SINCE

    11-08-2000

    10

    10%

    11

    10%

    12

    10%

    HUNGARY

    Parliamentary Resolution No. 4/99 of 28 January

    Notice 126/2000

    published on 30-06-2000

    IN FORCE SINCE

    08-05-2000

    10%

    10% e)

    15% b)

    11

    10%

    12

    10%

    INDIA

    Parliamentary Resolution No. 20/2000 of 6 March

    Notice 123/2000

    published on 15-06-2000

    IN FORCE SINCE

    05-04-2000

    10%

    10% m)

    15% b)

    11

    10%

    12

    10%

    INDONESIA

    Parliamentary Resolution No. 64/2006, of 6 December

    Notice 42/2008, published on 04-04-2008

    IN FORCE SINCE

    11-05-2007

    10%

    10%

    11

    10%

    12

    10%

    ICELAND

    Parliamentary Resolution No. 16/02, of 8 March

    Notice 48/2002, published on 08-06-2002

    IN FORCE SINCE

    11-04-2002

    effective from

    01-01-03

    10

    10% m)

    15% b)

    11

    10%

    12

    10%

    IRELAND

    Parliamentary Resolution No. 29/94, of 24 June

    Review Protocol - Parl...

To continue reading

REQUEST YOUR TRIAL