PORTUGAL Law and Practice Contributed by: Miguel Durham Agrellos, Paulo da Rocha Pichel and Ricardo Pereira Amaro, Durham Agrellos
1.7 Transparency and Increased Global Reporting Companies incorporated in Portugal, their articles of association and their shareholders and beneficial owners must be registered before the Commercial Registry and the Central Register of Beneficial Own - ers. At least part of the information contained in the register may be accessed by third parties. However, Family Business Charters and other shareholders’ agreements are, in principle, not publicly disclosed. Since 2017, several legislative measures have been taken to transpose Directive (EU) 2015/849, regarding the central register of beneficial owners. Such regime applies to any Portuguese or foreign entity with a Por - tuguese tax number. Reporting entities must comply with the imposed reporting obligations to the central registry, filing an initial declaration (which must be updated whenever there is a variation in any of the declared data) and an annual declaration of confirmation of the information previously communicated. For almost two decades, Portugal has enacted a gen - eral anti-avoidance rule and specific anti-avoidance tax rules (eg, CFC rules, transfer pricing or restructur - ing rules). In 2019, relevant legislative measures were taken to transpose the EU BEPS Directive. Portuguese legislation aligned the concept of “abuse” with the EU concept of “valid commercial reasons” as established in the BEPS Directive (resulting from CJEU case law). CFC rules have also been adapted and are applied when controlled foreign companies established out - side the EU or the EEA are subject to an effective tax lower than 50% of the tax amount that would be due under Portuguese law, or if such companies are established in a tax haven. Since 2017, Portugal has been integrated into the CRS/FATCA worldwide reporting system. In addition, the Portuguese legislature has extended the report -
tax, with the exception of non-resident entities domi - ciled in blacklisted jurisdictions. In such cases, an
aggravated tax rate of 7.5% applies. Real Estate Property Transfer Tax
As a general rule, there are no differences between residents and non-residents for the purposes of the real estate property transfer tax. However, two relevant exceptions apply: • non-resident entities domiciled in blacklisted juris - dictions are subject to an aggravated tax rate of 10%; and • non-residents who purchase real estate proper - ties intended exclusively for residential purposes are subject to a tax rate of 7.5%, unless one of the following situations applies: (i) the individual has qualified as a tax resident in Portugal; (ii) the individual becomes a tax resident in Portugal within two years from the date of acquisition; or (iii) the acquired property is intended to be let for residen - tial purposes at a monthly rent not exceeding the limit set forth by law, provided that certain addi - tional requirements are met. Personal Income Tax Capital gains obtained on the sale of real estate by non-residents are subject to PIT on 50% of the capital gains realised. Such capital gains are subject to the general progressive tax rates which can go up to 48%, plus a solidarity rate of up to 5% (meaning an effective tax rate of up to 26.5%). Finally, it should be noted that real estate structuring may involve direct ownership, real estate investment funds or companies. Trusts are not suitable to directly hold real estate assets located in Portugal. 1.6 Stability of Tax Laws In the last decade, Portuguese tax law has been rela - tively stable. The gift and inheritance taxation frame - work, as well as special tax regimes, such as the Por - tuguese non-dom regime, have put Portugal on the map as a desirable jurisdiction for high and ultra high net worth individuals.
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