PORTUGAL Law and Practice Contributed by: Benedita Aires and Orlando Vogler Guiné, VdA
7.5 Obtaining Legal Opinions The transaction legal opinion usually covers taxation matters, and also often addresses tax disclosure under the prospectus or offering memorandum. 8. Accounting Rules and Issues 8.1 Legal Issues With Securitisation Accounting Rules Provided that the securitisation is regulated, the accounting treatment will not affect the legal sta - tus of the assets nor the rights of the SPE. Under the Securitisation Law, any collections in the possession of the originator or the servicer that relate to receivables already assigned to the SPE will not form part of the insolvency estate of the originator or the servicer. In any case, in the event of the insolvency of the originator/ser - vicer, the SPE may need to provide evidence (to the insolvency administrator) of its entitlement to those collections and receivables. This process is swifter if the collections are properly segre - gated in the originator/servicer’s systems and
An important issue to consider is the WHT in respect of payments made under the secu - ritisation notes. Payments of principal are not subject to any WHT. Interest payments are pay - ments of income that could generally be sub - ject to WHT. Under both the Securitisation Tax Law regime and the special debt securities tax regime approved by Decree-Law No 193/2005, of 7 November 2005, there are income exemp - tions for payments made to foreign investors, provided that certain requirements are met. The most important income tax exemption applies to non-resident investors, where certain tax pro - cedures are met through the custody chain, and provided that the noteholder (the ultimate ben - eficiary of the income) is not resident in a black - listed (tax haven) jurisdiction with which Portu - gal has no double taxation treaty or information exchange in force. These requirements are nor - mally described in the relevant prospectus. 7.4 Other Taxes Pursuant to the Securitisation Tax Law, no stamp duty or VAT is due on servicers’ fees. In addition, no documentary taxes are due in Portugal. When hedging instruments are entered into, typ - ically in the form of swaps or cap agreements, and particularly where the hedging counterparty is a foreign bank (which is normally the case for rating purposes), it is prudent to detail certain tax form delivery obligations in the Schedule to the International Swaps and Derivatives Association (ISDA) Master Agreement, in order to avoid WHT issues. In any case, it is advisable for the nego - tiation of the derivative documentation to also involve tax lawyers.
accounts, which is usually the case. 8.2 Dealing With Legal Issues
Legal opinions do not cover accounting mat - ters, but may include certain qualifications or assumptions related thereto, presented to sus - tain opinions or risk assessments.
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