The dividend tax in Portugal
applies both to residents and non-residents and it has a flat rate of 28%. However, a special participation exemption is applicable under certain criteria. Dividends paid to a Portuguese resident by a Portuguese company or an EU company are subject to a different taxation regime.
A withholding tax on dividends is also applicable in Portugal; however, a special rate may apply if a double tax treaty exists between Portugal and the other jurisdiction.
Our lawyers in Portugal
can answer your questions concerning dividend taxation and other general questions about taxes for companies.
The tax on dividends in Portugal
Portugal has a participation exemption regime for the taxation of dividends. Under this regime, the dividends received by a resident company from a local/foreign shareholding are exempt from tax, if that shareholder is has held at least 10% of the capital or voting rights of that company (directly or indirectly) for at least one year. This exemption for dividends does not apply if the payment is deductible for the entity making the payment.
The Portuguese withholding tax on dividends paid to a non-resident company is 25% (or 35% if the payment is made to a company that is a resident of a country considered tax haven). An exemption applies if the recipient of the payment qualifies for the domestic participation exemption regime. The withholding tax rate is also reduced to 0% when the recipient is located in one of the countries with which Portugal signed a double tax treaty.
Portuguese residents that receive investment income, such as dividends paid by a Portuguese company
or a foreign company are taxed at 28%.
Portugal has almost 70 tax treaties in force. One of our lawyers in Portugal
can give you complete details on the provisions of the double tax treaties
Other taxes for companies in Portugal
Resident companies in Portugal are taxed on their worldwide profits
whole non-residents are taxed only on the profits derived from the country. Branches in Portugal belonging to international companies are only taxed on their profits derived from Portugal.
The tax year is generally the same as the tax year and an electronic self-assessment system is in place. You can contact our law firm in Portugal
for complete details on the tax laws and the tax requirements for companies.