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Budget Bill for 2011 - Tax Proposals Impact Taxpayers

Portugal

Under pressure from international credit markets, the Portuguese Government presented the 2011 Budget Bill, which includes important tax measures broadening the tax base for companies and individuals. Whilst in the Budget Bill the Government has confirmed a number of headline grabbing changes to be made to tax rates and deductions, there are also a number of areas that may have surprised taxpayers. Taxand Portugal provides an insight on the highlights of the Budget Bill for 2011, which if approved will generally apply from 1 January 2011.

Taxand's Take


The proposed measures to tax legislations will have an effect on both resident and non-resident entities within Portugal. For example non-resident entities that hold less than 10% share of a resident Portuguese company will no longer be exempt from an outbound dividend withholding tax (WHT) and WHT will rise to 21.5% from 20%. However, this may be reduced under a tax treaty to 10% or 15%. If these proposals are agreed, businesses will have to look at their current financial structure to make sure they follow the new tax proposals by January 2011. This will also have an impact on future inward investment into Portugal as the proposed tax measure may put off future investors.

Read the full insight on the tax proposals for 2011 from Taxand Portugal here

Your Taxand contact for further queries is:
Tiago Cassiano Neves
T. +351 21 382 12 00
E. tiago.cassiano.neves@garrigues.com

Taxand's Take Author