Global

Details

  • Service: Tax, International Corporate Tax, International Executive Services, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 2/11/2013

Portugal - Corporate, individual, indirect tax provisions in 2013 budget 

February 11: Portugal’s recently published budget for 2013 includes the following tax provisions:

Corporate income tax

  • Limitations on the deductibility of interest and other financing expenses
  • An increase in the rate of withholding tax to 25% (up from 15%) on income of non-resident entities in Portugal
  • A reduction in application of the “surcharge” rate of 5% on taxable profits in excess of €7.5 million (currently imposed on profits greater than €10 million)

Individual income tax

  • A change to the tax income bracket structure (reduced from eight to five) with corresponding changes to the income tax rates
  • A new 3.5% “surcharge” on income earned by Portuguese tax residents exceeding an annual minimum wage amount
  • An increase in the withholding tax rate on investment income to 28% (up from 25%)

VAT and indirect taxes

  • Changes to the rules for the recovery of VAT on bad debts
  • Transfers of properties to unit holders as a payment-in-kind will be subject to municipal property tax
  • Legislative authorization for the government to create a financial transaction tax and to change the tax regime applicable to the transfer of tax residency by companies

Read a February 2013 report [PDF 179 KB} prepared by the KPMG member firm in Portugal: State Budget Law for 2013




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