Corporate Tax

Tax Modifications That Might Have an effect on Portugal Non-Resident Corporations – Firm / Industrial Regulation


Tax changes that may affect non-resident companies in Portugal

August 11, 2021

Trustee group

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Following the adoption of the Portuguese Budget Act for 2021, a number of changes related to real estate in the jurisdiction have come into effect.

Similar to the problems we faced in 2017, where “effective control and management” was challenged by the Portuguese government, we have been made aware by a number of law firms in Portugal that the new budget is introducing further changes that may affect your current situation.

The following changes will affect corporate structures that already own property in Portugal or are considering buying:

  • The general real estate transfer tax (“PTT” or
    “IMT”) on the acquisition of real estate by companies resident in blacklisted legal systems has been expanded. As of January 1, 2021, the highest PTT rate (10%) will also apply to acquisitions of Portuguese property by companies that are directly or indirectly controlled by companies or corporations based in a Portuguese blacklisted jurisdiction.
  • The same approach applies to municipal property tax (“MPT” or
    “IMI” – Annual interest), for which properties that are directly or indirectly controlled by companies or legal entities based in a jurisdiction listed on the Portuguese blacklist are subject to an annual tax rate of 7.5%.

Consequently, these changes may also apply to existing structures that nominees use to hold the shares of the companies, depending on where they are located.

Who are the subjects / entities that may be affected by the changes?

  • All legal entities – be they nominees, shareholders, trustees, etc. – who have their tax domicile in a jurisdiction listed on the black list.
  • Companies that are based in a blacklisted jurisdiction or are indirectly part of a corporate structure.

Therefore, we are of the opinion that every customer who has a US LLC with nominees, shareholders, trustees in a black-listed jurisdiction such as Gibraltar should reassess their current structures and take the new rules into account. We strongly recommend that you contact your representative in Portugal for advice.

Alternatively, just as we previously supported the appointment of US Operating Managers in 2017, we can offer nominee services in the US, where the company is registered and based.

If this option is of interest to you, please contact your company administrator to inform you of the costs and requirements as we need to make various changes to the company.

The content of this article is intended to provide general guidance on the subject. Expert advice should be sought regarding your specific circumstances.

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