PORTUGAL Law and Practice Contributed by: Manuel Protásio and Catarina Coimbra, VdA
4.3 Transfer Tax and Capital Gains on the Sale of Mining Projects The tax system in Portugal imposes transfer and capital gains taxes on the transfer or sale of a mining project. However, there is no specific tax exclusively for the transfer of mining projects. When a mining pro - ject is sold, any capital gains realised are subject to taxation. For companies, these gains are included in taxable income and taxed at the standard corporate tax rate, while, for individuals, capital gains tax rates may vary. Although there is no specific tax on the transfer of mining rights, any associated real estate or signifi - cant assets involved in the transfer could be subject to Property Transfer Tax (IMT). This obligation can extend to international transac - tions involving foreign corporate structures, depend - ing on double taxation treaties and the economic sub - stance of the transactions. 5. Mining Investment and Finance 5.1 Attracting Investment for Mining In Portugal, attracting investment for mining primarily hinges on several general features rather than sec - tor-specific initiatives. The main features include a favourable regulatory framework, general government support for business and a strategic location with well-developed infrastructure, and a skilled workforce. 5.2 Foreign Investment Restrictions and Approvals in the Exploration and Mining Sectors Foreign direct investment is not restricted under general Portuguese law. In respect of repatriation of profits and investment, there are no currency controls under Portuguese law, and money can be freely trans - ferred into or out of the country. Also, there are no restrictions on the remittance of profits or investments abroad. 5.3 International Treaties Related to Exploration and Mining Portugal is not directly a part of any specific multilat - eral or bilateral treaties exclusively dedicated to the
and based on the initially allocated area, with potential premiums for securing an exploitation concession. For mineral deposit exploitation, the payment of annual royalties will be set contractually, usually at a minimum of 3% of the ore’s value at the mine’s gate. Calculations can be based on international market quotations, reference prices set by the DGEG, or total sales values, with deductions allowed for up to 5% for costs related to treatment, processing, storage and transportation. This percentage may be reduced to 2% under specific conditions involving domestic industrial processing of the ore. However, any significant change in these con - ditions reverts the financial contribution to the original 3% criterion. Where several mineral deposits are being exploited simultaneously in the same concession, the value of the royalties will be the sum of the values individually determined for each mineral deposit. No royalties will be due if the concessionaire’s taxable income for the previous year is 150% lower than the amount of the due royalties. A portion of royalties – typically between one third to half – must be paid to the municipalities where the resource is located, with the remainder being State revenue to be allocated to the Geological Resources Fund ( Fundo dos Recursos Geológicos ). In cases involving multiple municipalities, payments must be proportionally allocated. Finally, licensing fees, royalties, premia and other con - siderations are usually negotiated and established in concession agreements on a case-by-case basis. 4.2 Tax Incentives for Mining Investors and Projects In Portugal, mining activities are subject to the general tax provisions, meaning that there are no specific tax incentives for mining investors or projects. Further - more, stabilisation agreements, either in tax or any other matters, are not commonly offered.
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