PORTUGAL Law and Practice Contributed by: Benedita Aires and Orlando Vogler Guiné, VdA
assets allocated to the specific transaction and the parties have no claim against the remaining assets of the SPE. Furthermore, it is common for these provisions to also establish a cap for the SPE’s liability, which often corresponds to the lesser of: • the aggregate of all amounts due and payable to a transaction creditor; or • the aggregate amounts recovered by the SPE in respect of the assets allocated to the spe - cific transaction. Non-petition provisions generally set out an agreement between the parties to the trans - action, stating that no proceedings shall be brought against the SPE in respect of its obliga - tions under the transaction and that no steps shall be taken for the purpose of obtaining pay - ment of any amount due from the SPE to such other party to the transactions. 7. Tax Laws and Issues 7.1 Transfer Taxes Generally, the transfer of receivables generates potential exposure to: • corporate income tax (CIT) or withholding tax (WHT); • stamp duty; and • value-added tax (VAT). However, provided that the transfer complies with the requirements set out in the Securiti - sation Law, under which transfers must occur exclusively from the originator to the SPEs, its tax treatment should be neutral from a CIT/WHT, stamp duty and VAT perspective, pursuant to the Securitisation Tax Law, approved by Decree- Law No 219/2001, of 4 August 2001, as follows.
• No WHT applies to: (a) payments made by the SPEs (purchasers) to the originator (seller) in respect of the purchase of the receivables; (b) payments made by the obligors under the receivables; and (c) the payment of collections by the servicer (who is usually also the originator) to the SPEs. • No stamp duty applies to the transfer of receivables being securitised. • The transfer of receivables is VAT-exempt under the Portuguese VAT Code. Therefore, practitioners usually ensure that the transfer qualifies as a securitisation under the Securitisation Law. 7.2 Taxes on Profit Interest income paid by the debtors should not be subject to WHT under the Securitisation Tax Law, assuming that the relevant SPEs are locat - ed in Portugal, pursuant to the requirements of the Securitisation Law. SPEs are designed as pass-through vehicles, passing on the proceeds they receive under the receivables portfolio (and other transaction assets) to investors/transaction creditors. Thus, the taxable income arising for the issuer under a particular transaction will tend to be limited to the transaction fee it retains. In any case, this pass-through nature of the vehicle must be properly reflected in its respective accounts. 7.3 Withholding Taxes When dealing with locally regulated SPEs, the nature or characteristics of the receivables and the location of the originator (seller) do not have any influence on the tax regime.
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