PORTUGAL Law and Practice Contributed by: Manuel Requicha Ferreira and Diana Avillez Caldeira, Cuatrecasas
Stamp duty is borne by the entity required to present the guarantee (ie, the debtor). Accordingly, security granted in the context of a loan agreement tends not to be subject to stamp duty, as the use of credit under the loan agreement will itself be subject to taxation – provided that the conditions mentioned in the first and second bullet point in the foregoing list are met – such as in the case where a Portuguese company borrows funds from a non-resident bank. In the case of issu- ance of bonds, the security granted for the benefit of the relevant bondholders may trigger Portuguese stamp duty. When due, the basis for stamp duty taxation is the value of the underlying security (ie, the maximum secured amount). The effective tax rate depends on the applicable term, as follows: • security with a term of less than one year – 0.04% per month or a fraction thereof; • security with a term equal to one year and up to five years – 0.5%; and • security with a term equal to or over five years or without any specific term – 0.6%. In the case of transactions carried out by or with the intermediation of credit institutions, financing compa- nies or other entities legally equating thereto, or any other financial institutions, interest is also subject to stamp duty over the respective amount at a rate of 4%, as well as commissions and other bank fees over the respective amount at a rate of 3% (commissions for guarantees) or 4% (other commissions and fees for financial services). As outlined in the foregoing, no stamp duty is levied over operations subject to and not exempt from VAT – eg, bank commissions subject to and not exempt from VAT. Notwithstanding the foregoing, an exemption applies to interest and commissions charged, security grant- ed and the use of credit granted by credit institutions, financial companies and financial institutions to ven- ture capital companies. An exemption also applies to companies or entities the form and object of which correspond to those of credit institutions, financial companies and financial institutions – as provided in
EU Law, and regardless of whether they are domi- ciled in EU member states or in other states – with the exception of jurisdictions with a more favourable tax regime as defined by Ordinance No 150/2004 of the Ministry of Finance (as amended). 4.3 Foreign Lenders or Non-Money Centre Bank Lenders Portuguese tax implications applicable to foreign lenders or non-money bank lenders should follow, in general terms, the regime described in 4.1 Withhold- ing Tax and 4.2 Other Taxes, Duties, Charges or Tax Considerations . In any case, the qualification (or not) of lenders as financial institutions should be taken into considera- tion, as the applicable tax regime may differ depend- ing on such qualification. For instance, as detailed in 4.2 Other Taxes, Duties, Charges or Tax Considera- tions , commissions/other remuneration for financial services should only be subject to stamp duty if the relevant services are granted by – or with the interme- diation of – credit institutions, financing companies or other entities legally equating to them, or any other financial institutions. The typical Portuguese collateral package includes: • mortgages over real estate properties in Portugal; • pledges over the shares/quotas of material guaran- tors or financed companies; • pledges over fixed movable assets (namely stock, equipment or inventory); • pledges over bank accounts; • pledges/assignments of intercompany receivables; • pledges/assignments of receivables; and • pledges/assignments over insurance policies and, in some cases, intellectual property rights (ie, pat- ents, trade marks). Security over real estate assets is less frequent, except in project finance or real estate transactions or where real estate is the key asset of the guarantor/financed company. In certain financing transactions (eg, ves- 5. Guarantees and Security 5.1 Assets and Forms of Security
495 CHAMBERS.COM
Powered by FlippingBook