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Portugal Looking at Corporate Income Tax Reforms 

Global Tax Adviser


September 17, 2013


Brian Mustard
Montreal, International Corporate Tax


Portugal is considering reforms to its Corporate Income Tax that will significantly increase the competitiveness of Portugal for foreign investors. These changes, which are currently under public consultation, are part of Portugal's attempts to reduce bureaucracy and attract companies considering becoming resident in Portugal.

Among other changes, the proposals:


  • Gradually reduce the Corporate Income Tax rate to between 19% and 17% by 2018, starting in 2014
  • Create an optional simplified taxation regime for small businesses
  • Increase the time that tax losses can be carried forward to 15 years (from five years) for losses assessed after January 1, 2014
  • Reduce the threshold for the deduction of net interest and other financing expenses to €1 million (from €3 million)
  • Recommend a global participation exemption regime for dividends obtained by certain Portuguese entities
  • Introduce an optional participation exemption regime that applies to profits and losses of permanent establishments located abroad
  • Reduces the holding requirement to be a part of a tax group to 75% (from 90%)
  • Combine the investment incentive tax regime and the contractual investment incentive into a single simplified tax regime for certain investments
  • Introduce a special tax regime for income derived from patents and other intangible assets registered after January 1, 2014
  • Allow amortization of the acquisition cost of intangible assets with no defined useful life period for 20 years for intangible assets acquired after January 1, 2014.


For more information, contact your KPMG adviser.






Information is current to September 17, 2013. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

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