www.pwc.com/pt/ta Portugal a Holding Company Location PwC s International Ta Services professionals can help you construct effective cross-border strategies and manage your global structural ta rate.
Holding Companies Location Cyprus Denmark Ireland Luemburg Malta Netherlands Portugal (Madeira International Business Center) Spain UK Switzerland Ta Rate 10% 25% 12.5%/25% 28.59% 35%/2.5% * 25.5% 4% / 5% ** 30% 28% 7.83% (effective plus cantonal taes WTH on Dividends No (to nonresidents) No Yes (nil to EU & Treaty) Yes No Yes No Yes (0% / 18/ No Yes WHT on interest No No Yes No No No No Yes Yes Yes Capital Gains Eemption Yes Yes Yes (EU or Treaty) Yes Yes Yes Yes Yes Yes Yes Dividend Eemption Yes Yes Yes Yes Yes Yes Yes *** Yes Yes Yes CFC Rules No Yes No No No Yes (limited) No Yes (non EU only) Yes No * Minimum effective rate under refund method combined with flat rate on foreign ta credit ** Pure holdings (SGPS): applicable to non - EU sourced income. 20% on other income. Mied holdings: applicable to non - Portuguese sourced income, on given thresholds, depending on the number of jobs created. 20% on the ecess. *** Pure holdings (SGPS), EU, Portuguese Speaking African Countries, European Economic Area, other. Deduction for interest Capital Duty Yes (0.6% authorised) VAT (Standard) Employment Taes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No No No No No No Yes No No 15% 25% 21.5% 15% 18% 19% 16% 16% 17.5% 7.6% 0%-30% 0%-15% 20%-41% 0%-38% 0%-35% 33.5%/42% Up to 46.5% 20% special rate 24% / 43% 20% / 40% 50% Up to 11.5% + Cantonal taes PwC 2
Overview of the Portuguese ta regime Corporate income ta rate 12.5% on the first EUR 12,500. 25% on the ecess. A local surcharge up to 1.5% may apply. An additional surta of 2.5% applies to taable profits eceeding EUR 2 million. Eemptions on dividends Dividends distributed by Portuguese/EU/EEA subsidiaries to Portuguese Holding (SGPS), under qualifying participation regime (since the income was effectively taed and an investment of 10% is held for 1 year or more). Dividends distributed to SGPS, or under qualifying participation regime, by Portuguese Speaking African Countries or Timor-Leste subsidiaries, where minimum investment of 25% is held for 2 years. Eemptions on capital gains Capital gains realised by non-resident entities resident in countries with which Portugal concluded a Double Taation Treaty or a Ta Information Echange Agreement. Capital gains realised by Portuguese holding (SGPS) on the sale of shares- Held for at least 1 year, from incorporation or acquisition from third party- Held for at least 3 years if acquisition from associated enterprises (and other circumstances). Capital losses or financial epenses (interest, echange epenses) borne on the acquisition of shares disallowed as ta deductible epense by SGPS in certain conditions. PwC 3
Overview of the Portuguese ta regime Withholding Taes Dividends: domestic law (resident and non-resident): 21,5%; EU Parent/Subsidiary Directive / EEA: 0%; Double Taation Treaties: typically, 10% or 15%; distributed to Swiss companies (25% participation, held for 2 years): 0%. Interest: Domestic law (resident and non-resident): 21,5 %; Interest and Royalty Directive: 5% (nil after 30 June 2013); Double Taation Treaties: typically,10% or 15%. CFC provisions apply controversy if applicable to EU/EEA No net worth ta PwC 4
International Agreements concluded by Portugal Pure Holdings CIT rate of 4% (5% in 2012-2020), on non-eu sourced income Mied Holdings CIT rate of 4% (5% in 2012-2020), on non-portuguese sourced income, limited to thresholds of income, depending on the number of jobs created, as follows: Number of jobs created 1-2 2 millions 3-5 2.6 millions 6-30 16 millions 31-50 26 millions 51-100 40 millions Over 100 Thresholds of income (Euro) 150 millions CIT rate of 20% on the ecess (see slide Portuguese ta regime eemptions do apply) No withholding ta on dividends derived from foreign-sourced income, loan interest, royalties and services payments A 50% CIT deduction can be granted in certain conditions Low VAT rate (4%, 9%, 16%) Eemption from Stamp Duty, Municipal Property Ta and Property Transfer Ta assigned to company s purpose Low cost substance requirements Access to EU Directives and Regulations and to the most Double Taation Treaties Start of activity within 6 months upon issuance of license and (i) creation of 6 jobs or (ii) creation of 1 to 5 jobs and CAPEX EUR 75,000 in the first 2 years of activity PwC 5
International Agreements concluded by Portugal Albania Andorra Angola Argelia Argentina * Australia Austria Bahrein Barbados Belgium Bolivia * Bosnia and Herzegovina Brazil * Bulgaria Canada Cape Verde Chile * China Colombia Costa Rica * Croatia Cuba Cyprus Czech Republic Denmark Egypt El Salvador * Estonia Finland Filipinas France Gabon Germany Greece Guinea-Bissau Hong Kong PwC 6
International Agreements concluded by Portugal Hungary India Indonesia Ireland Israel Italy Japan Kuwait Latvia Libya Liechtenstein Luembourg Macao Malawi Malta Mauritius Meico Moldova Morocco Mozambique Netherlands Norway Oman Pakistan Panama Paraguay * Peru * Poland Qatar Republic of Congo Romania Russia San Marino Sao Tome and Principe Saudi Arabia Senegal PwC 7
International Agreements concluded by Portugal Singapore Slovakia Slovenia South Africa South Korea Spain Sweden Switzerland Timor Tunisia Turkey Ukraine United Kingdom United States of America Uruguay * Uzbekistan Venezuela * Vietname Zimbabwe DTT - Double Taation Treaty (some may not yet be in force) CSS - Convention on Social Security (some may not yet be in force) AMPPI - Agreement on Mutual Promotion and Protection of Investments * Ibero-American Social Security Agreement PwC 8
www.pwc.com/ta Jaime Carvalho Esteves, Ta Lead Partner jaime.esteves@pt.pwc.com +351 213 599 601 Lisbon Palácio Sottomayor Rua Sousa Martins, 1-4º 1069-316 Lisboa Tel: +351 213 599 680 Fa: +351 213 599 995 Oporto o Porto Bessa Leite Comple Rua António Bessa Leite, 1430-5º 4150-074 Porto Tel: +351 225 433 000 Fa: +351 225 433 499 Last update: July 2011 This communication is of an informative nature and intended for general purposes only. It does not address any particular person or entity nor does it relate to any specific situation or circumstance. PricewaterhouseCoopers Sociedade de Revisores Oficiais de Contas will not accept any responsibility arising from reliance on information hereby transmitted, which is not intended to be a substitute for specific professional business advice. 2011 PricewaterhouseCoopers Sociedade de Revisores Oficiais de Contas, Lda.. All rights reserved. In this document, PwC refers to PricewaterhouseCoopers Sociedade de Revisores Oficiais de Contas, Lda., which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.