PORTUGAL Law and Practice Contributed by: Miguel Durham Agrellos, Paulo da Rocha Pichel, Ricardo Pereira Amaro and Francisco Duque Lima, Durham Agrellos
Durham Agrellos Avenida da Boavista 3265, 3.1 4100-137 Porto Portugal Tel: +351 226 167 260 Fax: +351 226 167 269 Email: geral@da.pt Web: www.da.pt
1. Tax 1.1 Tax Regimes Personal Income Tax (PIT) Portuguese tax-resident individuals are taxed on their worldwide income. Employment and pension income is subject to pro - gressive tax rates up to 48% (an additional surcharge of 2.5% to 5% may apply). Capital investment income and net worth increases (including capital gains) are usually subject to a 28% tax rate. There is a special tax rate on the disposal of shares for small enterprises – capital gains obtained from the disposal (including the redemption) of shares of small companies are subject to an effective tax rate of 14%. A new special tax regime aimed to attract high and ultra high net worth individuals (HNWIs) entered into force on 1 January 2024. Such regime is applicable to individuals who perform certain qualified professional activities (eg, highly qualified professions including top managers and directors of entities operating in Portugal) and sets out a wide range of PIT exemptions and low tax rates. The benefits of the Portuguese non-dom regime are set out below. Portuguese-source income Employment and professional income derived from eligible activities are subject to a reduced 20% PIT flat rate.
Foreign-source income Employment income, professional income, financial (eg, dividends, interest, capital gains, income from funds), royalties and other income (except pensions) are tax exempt.
Wealth and Real Estate Tax Portugal has no wealth tax.
The transfer for consideration of real estate property located in Portugal is subject to real estate property transfer tax (up to 7.5%) and stamp tax (0.8%). The holding of real estate property is subject to real estate municipal property tax, between 0.3% and 0.45% (0.8% in case of rural properties), levied annu - ally on the tax value of the property. An additional tax of up to 1.5% on the global real estate property value (with a tax value higher than EUR600,000) is levied in the case of individuals. For companies, the applicable tax rate is 0.4% (without the exclusion of this EUR600,000). Corporate Income Tax (CIT) The general CIT rate applicable is set at 20% (munici - pal and state surcharges may apply). The following regimes should be mentioned regarding family-owned companies (from a domestic and transnational per - spective): • inbound and outbound participation exemption regimes are applicable to dividends and capital gains, under certain conditions;
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