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Urgent Tax Measures Proposed
The Portuguese government presented a proposal to Parliament for the introduction of several urgent tax measures. The measures are independent of the Budget Bill due to be presented in mid-October. It is expected the proposal will be published in the reminder of 2012. Taxand Portugal summarises the key tax measures outlined in the proposal.
Personal Income Tax
- Increase from 25% to 26.5% of the final and special withholding tax rate on investment income and capital gains derived by individuals (resident or non-resident).
- Increase from 30% to 35% of the final and special withholding tax rate on investment income obtained from or paid to a blacklisted jurisdiction (similar for Corporate Income Tax).
- Increase from 30% to 35% of the withholding tax rate on investment income made available in bank accounts of one or more owners but for the benefit of non-identified third parties (similar for Corporate Income Tax).
- A new stamp tax provision is created on property, usufruct or surface rights on residential urban immovable property with a taxable value of at least EUR 1,000,000.
Signs of wealth - presumed taxation of resident individuals
- The scope for indirect measurement of taxable profit is broadened so as to apply when the declared net income of a particular taxpayer is less than 30% (before 50%) of that which would result from the standard income determined under certain fixed criteria.
The above tax measures are just some of which outlined in the proposal. Mulitnationals doing business in Portugal should take note of the expected changes to taxation and be prepared to comply accordingly.