PORTUGAL Law and Practice Contributed by: Marta Pontes, Hélder Frias and José António Reymão Nogueira, Uría Menéndez
General As a matter of law, resident lenders, guarantors and security providers are generally primarily liable for delivering the stamp tax due to tax authorities, even though the economic burden falls on the borrower. In the case of loans granted to Portuguese resi- dent entities by non-resident entities and interest and fees charged by non-resident financial insti- tutions to Portuguese resident entities (in both cases, where the operations are not intermedi- ated by Portuguese resident financial entities), stamp tax should be assessed and borne by the borrower. 8.2 Withholding Tax/Qualifying Lender Concepts Interest According to the Corporate Income Tax Code (the “CIT Code” ), interest due by a resident in Portugal to a non-resident entity is, as a gen- eral rule, subject to withholding tax at a final rate of 25% (or 35% if the income is obtained by non-resident entities located in a country, ter- ritory or region in the “blacklist” issued by the Portuguese Ministry of Finance (Tax Haven) or to bank accounts of which the beneficial owner is not disclosed). However, the withholding tax may be reduced under a double tax treaty (DTT) if, prior to the interest payment, the beneficiary of the interest provides the paying entity with a specific form duly certified by the tax authorities of their coun- try of residence. The reduced DTT withholding tax rates usually vary between 10% and 15%. Additionally, certain withholding tax exemptions may apply to the payment of interest, provided that certain conditions are met, the most impor- tant of which are:
stamp tax perspective unless they involve Por- tuguese security or guarantees. Guarantees/Security As a general rule, stamp tax is due on guaran- tees and security granted in Portugal, which is deemed to occur if the relevant agreements are executed in Portugal, or the guarantees are given in favour of Portuguese resident entities, as well as on guarantees presented in Portugal for any legal purpose. However, no stamp tax is due on guarantees/ security when ancillary to a contract specifically taxed under the Stamp Tax General Table and granted simultaneously to the secured obliga- tion, even if on a different document. Therefore, if a guarantee or security interest is granted to secure a loan in relation to which stamp tax is payable, and provided the documents whereby the relevant guarantee or security are granted are executed on the same day as the relevant loan documentation, no stamp tax is payable. Stamp tax on guarantees/security is levied on the maximum secured value at a rate of up to 0.6%, depending on the term of guarantees/security and should be borne by the entity responsible for presenting the relevant guarantee (usually, the borrower). Even if no stamp tax is initially due because a guarantee or security interest is considered to be granted outside Portuguese territory, a stamp tax may be subsequently due if the relevant guaran- tee or security interest is enforced in Portugal or the documentation for that guarantee or security is presented in Portugal for any legal purpose, such as registration.
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