"It is a permanent battle for taxpayers, they are always at war with the authorities and I don't, sincerely, see this getting better," said one tax adviser.
A problem that has been plaguing taxpayers in the past few years is the steady growth in litigation coming as a result of what they saw as the over aggressive auditing and collection strategies of the tax authorities in Portugal.
This theme has continued into 2016 and does not look set to improve any time soon. "It is a permanent battle for taxpayers, they are always at war with the authorities and I don't sincerely see this getting better. They [the authorities] only have one concern and that is to collect money and everything else is a side issue, and anything can happen when you have that philosophy," the same adviser added.
Portugal, like many countries in Southern Europe, has had its fair share of fiscal worries since the financial crisis of 2008. Unemployment in the jurisdiction, despite falling from its peak of 17.5% in January 2013, remains stubbornly high at 10.8%, as of June 2016. The loss of tax revenue that this entails may go some way toward explaining why the tax authorities take such a hard stance against taxpayers.
On a brighter note, the effects of the country's corporate tax reform, which came into effect in January 2014, continue to be felt. However, with one of the headline measures, the reduction of the corporate income tax rate to 17%, being suspended with a view to possibly being cancelled the outlook is now uncertain from an investment point of view.
"This was one of the key features of the reform, but for now it has been suspended, and it may be cancelled, this is not very favourable to business," said Joao Marques Pinto, of Pedro Pinto, Bessa Monteira, Reis, Branco, Alexandre Jardim & Associados. "Nor for the economy as a whole, because after all you need businesses, investment and stability before you can have jobs."
This removal of an incentive to foreign investors could have an impact on the recovery in the jurisdiction and there has been a drop-off in the level of investment over the past six months. "We can wait and see, but I'm not very optimistic from an economic point of view. The Portuguese economy will only grow as a result of foreign investment and this is the removal of an incentive to investment," added Pinto.
Uncertainty in the tax market is fuelled by the political uncertainty in the country. As demonstrated by the reversal in the tax rate reform by the new government, new tax incentives to businesses can only be guaranteed as long as one government remains in power.
For now this means the key theme in Portugal is uncertainty. Until businesses can be confident in the government, the entire direction of the corporate tax reform will remain in doubt, and there will be little word on when and to what degree further provisions from the OECD's BEPS Project will be implemented.
Cuatrecasas, Gonçalves Pereira
Praça Marquês de Pombal, 2
1250-160 Lisbon, Portugal
Tel: +351 21 355 38 00
Fax: +351 21 353 23 62
Other offices: Alicante, Barcelona, Bilbao, Brussels, Casablanca, Girona, Lleida, London, Luanda (Angola, in exclusive association with local firm), Madrid, Malaga, Maputo (Mozambique, in exclusive association with local firm), Mexico City, New York, Palma de Mallorca, Porto, San Sebastián, São Paulo, Seville, Shanghai, Valencia, Vigo, Vitoria and Zaragoza
Contact: Diogo Ortigão Ramos, Head of the Portuguese tax practice
Ernst & Young S.A.
Avenida da República
Tel: +351 2 1791 2000
Tax Managing Partner
Tel: +351 2 1791 2000
Business Tax Services
Pedro Paiva *
Tel: +351 2 2607 9694
Global Compliance and Reporting
Tel: +244 9 2756 1851
Tel: +351 2 1791 2000
Tel: +351 2 1791 2045
International Tax Services
Tel: +351 2 2607 9698
Operating Model Effectiveness and Transfer Pricing Services
Tel: +351 2 1791 2045
Personal Tax Advisory Services
Tel: +351 2 2607 9694
Transaction Tax Services
Tel: +351 2 1794 9305
Av. da Republica, 25
Tel: +351 213 821 200
Fax: +351 213 821 290
Av. da Boavista,
3523- Ed. Aviz.
4100- 139 Oporto
Tel: +351 226 158 860
Fax: +351 226 158 888
Executive Chairman and Global Managing Partner: Fernando Vives
Managing Partner in Portugal: João Miranda de Sousa
Head of Tax: Fernando Castro Silva
Head of Tax Litigation: Pedro Braz
Number of professionals in Portugal: 85
Garrigues is, exclusively, Taxand Portugal, the first global organisation providing access to over 2,000 leading tax advisors and more than 400 partners across nearly 50 countries.
Languages: English, French, Portuguese and Spanish.
Our clients' success matters. KPMG professionals work collaboratively with their clients to develop solutions and approaches that meet their unique business needs.
The tax landscape is constantly evolving; transparency and 'fairness' are daily discussion points in the media, with governments, tax authorities and society. Our professionals are forward thinkers with a strong understanding of our new tax landscape and regulation, as well as the business drivers and conditions across the jurisdictions in which our clients operate.
KPMG professionals are passionate and dedicated to technical excellence. They take a comprehensive approach to tax planning, so that clients receive a complete perspective on their tax issues and concerns.
Because KPMG professionals take the time to understand our clients' business issues – not just the challenges related to tax – they also know when and how to draw on the experience and knowledge of other service lines to help address business issues.
Luís Magalhães, Head of Tax
PLMJ's tax practice is one of the largest in the market and it has dedicated teams for tax planning and cross border transactions, tax litigation, taxation of private clients and international tax. The practice's reputation for cross-sector expertise covers all areas of tax law, in particular M&A, private equity, tax-neutral reorganizations, corporate financing, wealth taxation, criminal tax law and complex tax litigation.
PLMJ's tax practice is the most international in the market with members in Angola, Mozambique and Switzerland. This is the result of the business development and human resources strategies adopted to take advantage of PLMJ International Legal Network. This network handles cross-border work linked with inward and outward investment in the Portuguese speaking-countries in Africa, as well as local tax litigation and wealth planning.
Nuno da Cunha Barnabé, Partner head of PLMJ's Tax Team
João Magalhães Ramalho, Partner
Serena Cabrita Neto, Partner
Miguel C. Reis, Partner Oporto office
Angola, Brazil, Cape Verde, China, East Timor, Macao, Mozambique, Portugal, Switzerland, United Kingdom
Uría Menéndez – Proença de Carvalho Edifício Rodrigo Uría
Rua Duque de Palmela, 23
Tel: +351 21 030 86 00
Fax: +351 21 030 86 01
Contact: Filipe Romão, Marta Pontes
Rua do Campo Alegre, 830 - 3º /sala 12
Tel: +351 22 030 86 00
Fax: +351 22 030 86 01
Contact: Miguel Durham Agrellos
Madrid, Barcelona, Bilbao, Valencia, London, Brussels, Frankfurt, New York, Buenos Aires, Mexico City, Lima, Santiago de Chile, Bogotá, São Paulo, Beijing.
Rafael Fuster Tozer, Jesús López Tello, Rafael García Llaneza, Guillermo Canalejo Lasarte, Víctor Viana Barral, Miguel T. Cremades Schulz, Gloria Marín Benítez
Avenida Diagonal, 514
Tel: +34 93 416 51 00
Fax:+34 93 416 51 11
Luis Viñuales, Carlos Durán and Miguel Morales
Bilbao, Valencia, London, Brussels, Lisbon, Porto, Frankfurt, New York, Buenos Aires, Mexico City, Lima, Santiago de Chile, Bogotá, São Paulo, Beijing.
|Corporate Income Tax||21%||A|
|Corporate income tax - state surcharge||3%||5%||7%||C|
|Capital Gains Tax||0%||21%||25%||D|
|Branch Tax||21%||A B C|
|Net Operating Losses (years)|
|Royalties from, for example, patents, know-how||0%||35%||G|
|Branch Remittance Tax||0%|
A Corporate income tax (CIT) applies to resident companies and non-resident companies with permanent establishments in Portugal. Small and medium-sized companies can benefit from a 17% reduced rate for the first €15,000 ($20,000) of taxable profit.
B A municipal surcharge of up to 1.5% is generally imposed on the taxable profit determined for CIT purposes. Certain municipalities do not levy the surcharge.
C A state surcharge of 3% is imposed on the taxable profit determined for CIT purposes between €1.5 million and €7.5 million. If the taxable profit for CIT purposes is more than €7.5 million, the state surcharge is levied at a rate of 5% on the excess up to €35 million. If the taxable profit for CIT purposes is more than €35 million, the state surcharge is levied at a rate of 7% on the excess.
D Gains on the disposal of shares may be exempt from tax, provided certain requirements are met. Non-resident companies that do not have a head office, effective management control or a permanent establishment in Portugal are taxed at a 25% rate on taxable capital gains derived from disposals of real estate, shares and other securities. For this purpose, a tax return must be filed. A tax treaty and/or a domestic exemption may override this taxation.
E The dividends rate is 0% to 35%. Dividends paid to non-resident companies are taxed at 25%. The rate of 35% applies if dividends are paid to a resident of a listed tax haven, or in cases where the beneficial owner of the income is not properly disclosed. The rate may be reduced under a tax treaty or exempt under the participation exemption regime (if the beneficiary is resident in EU/EEA, a tax treaty country and if certain other conditions are met).
F The rate is 0% to 35%. The rate for interest paid by companies is 25%. The rate of 35% applies if interest is paid to a listed tax haven or in cases where the beneficial owner of the income is not properly disclosed. The rate may be reduced under a tax treaty or exempt under the EU Interest & Royalties Directive.
G This rate is 0% to 35%. Royalties paid to a non-resident are taxed at 25%. The rate of 35% applies if royalties are paid to a listed tax haven or in cases where the beneficial owner of the income is not properly disclosed. The rate may be reduced under a tax treaty or exempt under the EU Interest & Royalties Directive.
H For tax losses computed before 2010, the prior six-year carry-forward period applies. For tax losses computed in 2010, a four-year carry – forward period applies. For tax losses computed in 2012 or 2013, a five-year carry-forward period applies. For tax losses used from January 1 2014, the amount deductible each year is capped by 70% of the taxable profit for the year.
ABBC – Azevedo Neves, Benjamin Mendes, Carvalho & Associados is led by António Moura. It assists clients to achieve best tax practice among its clients, advising them on the tax implications of a variety of issues including, M&A, restructuring for tax-efficient transactions, transfer pricing, tax disputes and several other key areas of tax advisory.
Abreu & Marques e Associados' tax practice is led by founding partner Jorge de Abreu. His practice areas include commercial and company law, M&A, banking law, real estate, energy, intellectual property and arbitration.
The team assists clients on domestic and international law and has expertise in tax litigation, international tax planning and other direct and indirect tax matters. The firm offers a full range of tax advice and specialises in tax litigation.
Abreu Advogados is led by founding partner Miguel Teixeira de Abreu and Miguel Castro Pereira, the firm's tax and transfer pricing professionals advise clients from a range of industries in the preparation and review of transfer pricing files, give advice on the tax implications of M&A transactions, assist with tax risk assessment as well giving advice on efficient tax structuring amongst other practice areas.
The firm has offices in Lisbon, Oporto and Madeira as well as several offices based in Portuguese speaking jurisdictions overseas, from which it advises a range of clients including domestic and international privately and publicly held companies and multinational groups on a broad range of tax and transfer pricing issues.
The tax practice at Baker Tilly Portugal is led by Tiago Almeida Veloso, who leads a team which advises clients on tax issues related to private equity, media & telecommunications, personal taxation, financial services and pharmaceuticals, amongst other industries.
The firm offers a full tax and transfer pricing service, covering areas such as tax disputes and litigation, corporate and international taxation, as well as having the ability to advise on the most efficient tax structures for businesses to put in place whilst protecting against accusations of abuse.
Caiado Guerreiro & Associados specialises in advising clients in sectors such as utilities, banks, financial institutions, professional firms, insurance companies and public bodies, on a range of tax issues. Including the tax implications of investment structuring, corporate income tax, VAT, excise duties, transfer pricing and issues of double taxation and implementation of benefits arising from double taxation treaties.
The tax department at Campos Ferreira, Sá Carneiro & Associados offers a range of tax services including tax analysis, tax planning for transactions, cross-border M&A, joint ventures and complex private-equity transactions.
António Rocha Mendes is the key contact for the tax practice and works closely with associate Bárbara Schürmann.
CMS Rui Pena & Arnaut is the Portuguese affiliate of the international law firm, CMS. The tax team offers a range of tax services and assists clients in a variety of areas including corporate and international tax, restructuring, real estate, intellectual property, VAT, individual taxation, investment funds and private equity. The practice also offers litigation and arbitration services.
A key contact at Cuatrecasas, Gonçalves Pereira is Diogo Ortigão Ramoswho leads a team including those with previous experience of working in Big 4 firms, to advise clients on a range of tax and transfer pricing issues. The practice covers corporate and international taxation, tax efficient business structuring, advice on the tax implications of transactions such as M&A and LBO's as well as litigation support and indirect tax advice, amongst other areas.
The firm advises clients of all sizes and particularly focuses its practice on banks, automobiles & automotive, financial services, food & drink distribution and insurance, amongst others.
A key contact at Deloitte in Portugal is Carlos Loureiro the firm's head of tax. He leads a large team of tax professionals, 37 of whom cover indirect tax, 112 of whom cover corporate tax and 307 who cover tax compliance and accounting.
The firm in Portugal primarily advises large Portuguese and international private and publicly held companies as well as multinational groups on a broad range of tax issues. Its key clients are in the energy and utilities, financial services, manufacturing, technology, media and telecommunications (TMT), as well as fast moving consumer goods (FMCG) industries amongst others.
From offices based in Lisbon, Oporto as well as Luanda, Angola – the team has a number of well recognised market leaders in areas such as VAT, transfer pricing, personal taxation as well as international taxation. The team is committed to providing innovative and reliable tax solutions and through collaboration with other departments ensure that the tax structures it recommend can be fully implemented to the benefit of its client, as well as defended to the tax authorities.
Espanha e Associados in Portugal offers a range of essential tax services including M&A, restructuring for tax-efficient transactions, transfer pricing, tax disputes and several other areas of tax advisory, to a range of clients, including large and small domestic and international privately and publicly held companies and multinational groups, from a wide range of industries.
EY in Portugal is led by Carlos Lobo, who leads a team which provides its clients with a full range of tax services. From its offices in Lisbon and Porto professionals at the firm help its clients who include domestic and international privately and publicly held firms as well as international groups in the establishment and defense of efficient tax structures, conduct tax risk assessments, advise on the tax implications of M&A transactions as well as global tax compliance accounting and reporting.
FCB Sociedade de Advogados is headed by Diogo Bernardo Monteiro, who leads a team which assists clients in a broad range of domestic and international tax issues. The firm provides assistance to clients on domestic and international matters from several locations in Portugal including Lisbon, Oporto and Faro, Luanda in Angola, Maputo in Mozambique as well as Madrid.
Galhardo Vilão Torres is a firm based in Lisbon offering clients services in tax and legal advisory, accountancy and litigation, employing lawyers who are particularly skilled in in matters relating to finance, commercial transactions, buy-outs and venture capital transactions, M&A and corporate law.
Garrigues, Taxand Portugal's tax practice includes two partners and 21 other fee earners. Two who cover indirect tax, five who cover corporate tax, ten who work in tax disputes and three who cover tax compliance and accounting.
The team primarily represents clients in the financial services, energy and utilities, FMCG, healthcare and pharmaceuticals, TMT as well as hospitality and tourism amongst other industries, with a wide range of business types.
This year saw the firm involved in a high value litigation arguing that the banking levy introduced in the wake of the financial crisis under the auspice of the EU and IMF directed recovery plan arguing that the levy was illegal and unconstitutional under Portuguese law. With the issue being important because it will ultimately have a bearing on whether other sectoral levies will be found to be in breach of the law.
Grant Thornton & Associados is the Portuguese franchise of Grant Thornton who specialising in providing a full range of tax services including expatriate tax planning, employment taxation, corporate tax and transfer pricing to a range of domestic and international clients across a range of industries.
The head of KPMG in Portugal is Luís Magalhães, who leads a team of over 200 tax professionals. The team works on a multidisciplinary basis, with professionals in tax, legal and financial advisory.
The firm offers tax services, including corporate tax, advice on the tax implications of M&A and LBO transactions, as well as indirect taxes, transfer pricing to a number of domestic and international privately and publicly held companies as well as multinational groups.
The firm's clients are drawn primarily from the telecommunications, media and postal services, energy and natural resources, banking, real estate and pharmaceuticals and through KPMG's worldwide presence the firm can offer a truly international service which takes full account of the client's needs.
Linklaters head of tax in Portugal is Rui Camacho Palma, who oversees a team of four other fee earners all of whom cover indirect tax including VAT, corporate tax, tax disputes as well as compliance and accounting.
The firm primarily advises companies of a variety of organisational structures in a range of industries, such as financial services, FMCG, healthcare and pharmaceuticals, information technology and education, amongst others.
This year saw the team advise insurance group AXA in relation to the proposed sale of its Portuguese business to Ageas Insurance International and advise on a number of complex tax issues relating to the proposed transaction, as well as co-operating with other departments within the firm to advise on competition issues and anything else that would arise during the deployment of the transaction.
MGRA is an independent Portuguese law firm which specialises in advisory services related to taxation. Including assistance in tax planning, during litigation, corporate tax, debt restructuring and transfer pricing.
Miranda Correia Amendoeira & Associados is a Portuguese firm offering a broad range of clients from a variety of backgrounds a range of services. Including, tax planning and compliance, litigation, tax-efficient structuring of transactions, M&A, project financing, transfer pricing, and other direct and indirect tax matters.
Morais Leitão, Galvão Teles Soares da Silva & Associados is a well-respected Portuguese law firm which is co-headed by Francisco de Sousa da Câmara who leads the teams based in Lisbon and Madeira, and António Lobo Xavier who leads the team based in Porto.
The firm prides itself on its multifaceted approach to tax consulting, and its ability to assist clients with a broad range of matters including tax disputes, indirect taxation, corporate tax, M&A and the tax implications of restructuring.
The firm specialises in advising clients of all business structure types but notably large companies and groups in the banking and financial services, energy, TMT, mining as well as pharmaceuticals.
PBBR – Pedro Pinto, Bessa Monteiro, Reis, Branco, Alexandre Jardim & Associados's key contact is Joao Marques Pinto, who has over 20 years of experience working with clients in the area of corporate and international tax law having extensive experience extensive experience in advising clients with queries relating to real estate, foreign investment, financial services, corporate tax, restructuring and M&A.
The firm advises a broad range of clients from a number of industries on a broad range of tax issues, and is spoken of highly by peers in Portugal.
The head of tax at Portuguese law firm PLMJ is Nuno da Cunha Barnabé, who leads a team which includes four partners and 13 other fee earners, four of whom are capable of covering indirect tax, nine of whom can cover corporate tax, four who advise on tax disputes and one who deals with tax compliance and accounting. This makes the firm one of the larger tax practices in Portugal.
The firm has developed a reputation for its cross-sector expertise covering all areas of tax law, in particular M&A, private equity, tax efficient reorganisations, corporate financing, wealth taxation, criminal tax law and complex tax litigation.
PwC in Portugal has a team of over 200 tax professionals who are dedicated to providing clients with a range of high quality tax advisory services, covering all company structure types and industries.
The tax services include, tax structuring, corporate and international taxation, transfer pricing, indirect tax as well as offering individual advice to taxpayers, amongst other areas.
Ricardo da Palma Borges & Associados in Portugal is led by founding partner Ricardo da Palma Borges, and provides Portuguese and international taxation services to a range of clients from a range of industries. His team provides assistance in corporate and personal tax, with particular abilities in tax compliance, controversy, auditing, legislation, tax planning and other areas of tax advisor
Rogério Fernandes Ferreira & Associados is a Portuguese law firm dealing in corporate tax, tax disputes, compliance and accounting. The firm comprises two partners and also employs 21 other fee earners. A key contact at the firm is managing partner Rogério Fernandes Ferreira. In the past year RFF & Associados has recruited two senior associates, two associates and two trainee lawyers.
This year the firm has advised a well-recognised financial services company involving transactions which either originate in Portugal or has a Portuguese counter party, as well as those where securities issued are by Portuguese entities. Leading to its implementation by this company for its equity financing activities which involved these kinds of transactions.
It has also worked with a globally recognised food and drinks brand in a dispute with the Portuguese tax authorities regarding the circulating goods where the taxpayer and the tax authority had a different interpretation of what the rules implied was required of the taxpayer.
The firm advised a domestic energy supplier in an administrative claim against the Portuguese Tax Authority on whether the extraordinary additional surcharge represented an additional income tax in breach of Portugal's Constitution. Whilst this dispute is still ongoing if it is ruled in favour of the energy company it could see any costs that have been accrued from the extraordinary surcharge returned to the taxpayer.
Rui Barreira, Magalhães Correia, Teresa Carregueiro e Gorjão Henriques advise a broad range of clients from a range of industries in a variety of circumstances. Notably, in several key areas of tax including consultancy, tax planning, personal income tax, litigation, structuring, and Portuguese and foreign tax law.
Miguel Torres is the key partner for the tax practice at Telles de Abreu. The firm offers an array of services, including taxation. The team assists clients with a range of tax matters including tax minimisation, M&A, transaction structuring, tax litigation, individual and corporate taxation.
Uría Menéndez – Proença de Carvalho's head of tax in Portugal is Filipe Romão, who leads a team of one other partner and 13 other tax professionals. Six professionals work in indirect tax, eight in corporate tax, six cover tax disputes and litigation and four work in tax compliance and accounting.
The firm primarily advises clients in the financial services, TMT, hospitality and tourism, energy and utilities, transport and aerospace as well as healthcare and pharmaceuticals amongst other areas.
Vieira de Almeida & Associados' tax team includes four partners and 15 other professionals, the firm advises clients in financial services, healthcare and pharmaceuticals, TMT, energy and utilities, FMCG as well as information technology industries amongst others. Its clients include individuals, domestic and international private and publicly held companies and multinationals.
The firm prides itself on being the only Portuguese tax practice with a presence in all Portuguese speaking jurisdictions, as well as several Francophone jurisdictions, including several in Africa.
This year saw the firm successfully defend one of its clients in one of the largest tax disputes ever seen in Portugal, as well as advising a number of well recognised multinationals in a variety of complex tax litigation cases.
|Tier 1 - Portugal|
|Garrigues, Taxand Portugal|
|Morais Leitão, Galvão Teles Soares de Silva & Associados|
|Rogério Fernandes Ferreira & Associados|
|Uría Menéndez - Proença de Carvalho|
|Vieira de Almeida & Associados|
|Tier 2 - Portugal|
|Cuatrecasas, Goncalves Pereira|
|Tier 3 - Portugal|
|ABBC – Azevedo Neves, Benjamin Mendes, Carvalho & Associados|
|Baker Tilly Portugal|
|Espanha e Associados|
|Ricardo da Palma Borges & Associados (RPBA)|
|Rui Barreira, Magalhães Correia, Teresa Carregueiro, e Gorjão Henriques|
|Tier 4 - Portugal|
|Caiado Guerreiro & Associados|
|F Castelo & Associados|
|FCB Sociedade de Advogados|
|Galhardo Vilão Torres|
|Grant Thornton & Associados|
|Miranda & Associados|
|PBBR – Pedro Pinto, Bessa Monteira, Reis, Branco, Alexandre Jardim & Associados|
|Tier 5 - Portugal|
|Abreu & Marques e Associados|
|Campos Ferreira, Sá Carneiro & Associados|
|CMS Rui Pena & Arnaut|
|Telles de Abreu|