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Taxation of Foreign Companies in Portugal

Taxation of Foreign Companies in Portugal

Updated on Tuesday 23rd May 2017

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Taxation-of-Foreign-Companies-in-Portugal.jpgThe taxation of foreign companies in Portugal is made according to the income derived from the country, attributable to a permanent establishment of that company located in the country. 
 
The corporate income tax rate for foreign companies in Portugal is a flat one and non-resident corporations may benefit from several tax reductions or exemptions if a treaty for the avoidance of double taxation is in place between their country of origin and Portugal.
 
One of our attorneys in Portugal can answer your questions about the laws for the taxation of foreign legal entities in the country.
 

Taxation in Portugal

 
The main tax for companies in Portugal is the corporate income tax, whether these companies are resident or non-resident ones. This tax is levied on the company’s profits and small businesses can benefit from a simplified tax regime.
 
The standard corporate income tax rate in Portugal is 21% and a reduced rate applies on the first 15,000 EUR of taxable profits, only for small and medium-sized companies. 
 
Other taxes for corporations in Portugal include a state surcharge on profits, at fixed rates, the real property tax, the social security tax, the stamp duty or the transfer tax. Additional taxes may apply to companies operating in fields related to oil exploitation. 
 
The experts at our law firm in Portugal can give you detailed information about the taxed on corporations and how the double tax treaties apply to non-resident companies. 
 

Tax rules for foreign business entities in Portugal

 
Foreign investors in Portugal may choose to operate through a subsidiary or a branch. The first is essentially a Portuguese company, a tax resident that is incorporated in the country and operates in the same business field as the parent company. The foreign legal entity is not liable for the subsidiary’s debts and obligations. 
 
The Portuguese branch will need to observe the same taxation principles and will generally be taxed the same way as a resident company. Repatriated profits derived from the branch are not taxed. 
 
Our lawyers in Portugal can give you detailed information on the General Tax Law and other tax laws and regulations. Contact us for detailed information and advice.
 

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