PORTUGAL Law and Practice Contributed by: Francisco Cabral Matos, Rita Pereira de Abreu and Margarida Campelo, VdA
Property Transfer Tax Property Transfer Tax (IMT) is applicable to onerous acquisition of real estate located in Portuguese ter - ritory. The sale of shares in Portuguese companies may be deemed or assimilated to the transfer of the underlying real estate assets, in which case the trans - fer of shares triggers the application of IMT. For this tax to be triggered on the sale of shares, the following requirements must all be fulfilled: • the asset value of the relevant company results, directly or indirectly, more than 50% from real estate assets located in Portugal; • the real estate assets are not allocated to business exploitation (commercial, industrial or agricultural activities), other than property trading; and • as a result of the acquisition, the purchaser acquires more than 74% of the share capital of the relevant Portuguese company. Regarding the second condition above, it is still unclear from the current wording of the legal provi - sions in force what may qualify as allocation of real estate assets to business exploitation. 2.9 Other Notable Taxes Value-Added Tax Value-added tax (VAT) is charged on the provision of services, sale of goods, and importation into Portu - guese customs territory at a standard rate of 23%. Reduced rates are available for some essential goods and services (in Madeira and Azores, the tax rates are 22% and 16%). Law 62/2025 established a VAT group regime that allows corporate groups to consolidate the VAT bal - ances of individual entities. This aligns Portugal’s tax management with other EU member states and aims to improve cash-flow efficiency. However, unlike broader VAT grouping regimes elsewhere, intra-group transactions remain subject to VAT, with only balance consolidation permitted. Therefore, full VAT neutrality on intra-group transactions is not achieved. Customs Duties Customs duties are due on imports and apply to spe - cific products including oil and energy products, tech
However, this exemption does not apply on the dis - posal of “land-rich companies”, ie, if more than 50% of a company’s assets are real estate assets located in Portugal. The exclusion does not apply if the real estate assets are used for agricultural, industrial or commercial purposes, other than property trading (purchase and resale of real estate). The participation exemption for capital gains does not apply where the arrangement constitutes an artificial or non-genuine structure that was realised with the principal purpose, or one of the principal purposes, of obtaining a tax advantage that frustrates the object and purpose of eliminating double taxation, having regard to all the facts and circumstances. 2.8 Other Taxes on Transactions Stamp Duty Stamp Duty applies to several different transactions, such as loans, leases, securities, asset purchases, business transfers and SIC net asset value, when they occur in Portugal. In principle, it does not apply if the transaction is subject to VAT, and the applicable rates are specified in the Stamp Duty Code. Municipal Property Tax The holding of real estate located in Portugal is sub - ject to Municipal Property Tax (IMI) on the Taxable Pat - rimonial Value ( Valor Patrimonial Tributário – VPT) on an annual basis, at a rate between 0.3% and 0.45% for urban properties. The exact rate is determined by each municipality. The holding of real estate by enti - ties resident in a blacklisted jurisdiction or by an entity directly and/or indirectly held by an entity resident in such a jurisdiction is subject to IMI at an aggravated rate of 7.5%. Additional Municipal Property Tax Additional Municipal Property Tax (AIMI) is levied on urban properties for residential purposes and plots of land for construction located in Portugal. Urban properties registered for “trade, industry or services” or as “other types of property” ( outros ) are excluded. The taxable amount for AIMI purposes corresponds to the sum of the VPT of the urban properties and con - struction plots held by each taxpayer as at 1 January of each year. AIMI is levied at a flat rate of 0.4% on the aggregate VPT of all properties.
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