Portugal has risen eight places in terms of ease of paying taxes in the World Bank's Doing Business report. Globally, Portugal ranks 38 out of 190 economies.
The country's economy performed particularly well in the second half of 2016 and Europa expects GDP growth to increase to 1.8% in 2017, before levelling out in 2018.
"The state budget constraints we have in Portugal have helped the Portuguese economy," said Diogo Ortigão Ramos of Cuatrecasas, Gonçalves Pereira.
The continual reforms have seen the implementation of efficient accounting software in 2017, easing the payment of taxes through a simplified online filing system.
The 2017 State Budget Law was introduced from the start of 2017, and includes tax reforms that will significantly impact multinational enterprises doing business in the region.
PwC points out these reforms will advance the share capital regime, which will reduce the "debt bias" effect, further encouraging real estate and asset investment and maintaining the Portuguese tax regime to support investment (Regime Fiscal de Apoio ao Investimento).
Small and medium-sized enterprises in the interior regions of Portugal now benefit from a reduced corporate tax rate of 12.5%. The reduced rate applies to the first €15,000 ($17,800) of taxable income. This concerns entities operating within the sectors of cultivation, commerce, finance, industrial and utilities.
In line with the enhanced focus on tax, companies based in Portugal continue to face high levels of scrutiny from tax officials and tax audits.
"We have a left political environment, which is between several governments," said Ramos. "Things are working but there is an idea that rich people should give and contribute more. What is important is to preserve companies working in Portugal."
Cuatrecasas, Gonçalves Pereira
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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
Regional Tax Leader (Oporto)
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Tel: +351 2 2607 9694
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Tel: +244 9 2756 1851
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Tel: +351 2 1791 2045
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Ricardo Reigada Pereira
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.
As the world becomes more and more interrelated, discussions around tax are likely to intensify. Despite its multi-domestic dimensions, tax is increasingly a global concern for those in charge of managing global organizations; the evermore connected nature of the modern economy demands global action on managing tax issues.
Transparency and 'fairness' are daily discussion points in the media, with governments, tax authorities and society.
Tax leaders are being called upon to help drive tax uncertainty within their organizations and to make visible their "tax storyline" consistently with the organization's principles and values, while positively contributing to society and adding value to the business.
KPMG Tax professionals are forward thinkers with a strong understanding of this new tax landscape, as well as of the business drivers and conditions across the jurisdictions in which the clients operate. They take a comprehensive approach to tax planning, so that clients have a consistent, robust and effective view on their tax issues and concerns.
Because KPMG Tax professionals take the time to understand the 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 local and global service lines to help address these tax issues and concerns.
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, Guinea Bissau, Macao, Mozambique, Portugal, São Tomé and Príncipe, 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.
|Corporate Income Tax||21%||A|
|Corporate income tax - state surcharge||3%||5%||7%||C|
|Branch Tax||21%||A B C|
|Net Operating Losses (years)|
|Royalties from, for example, patents, know-how||25%||35%||G|
|Branch Remittance Tax||0%||N/A|
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) 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 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) 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.
After a six-year best-friends relationship, ABBC – Azevedo Neves, Benjamin Mendes, Carvalho & Associados combined with DLA Piper to become ABBC DLA Piper in March 2017. The combination means that DLA Piper now has firms across Iberia.
The firm, which has 50 lawyers in various practice areas, is also closely related to ADCA in Portuguese-speaking Angola. ACDA is part of the DLA Piper network, too.
Partners at the firm who deal with tax are António Moura and Nuno Azevedo Neves.
Abreu & Marques e Associados has offices based in Lisbon and Madeira, as well as an office in Luanda, Angola. The practice is led by Jorge de Abreu. The firm includes taxation services such as tax minimisation, M&A, transaction structuring, tax litigation, individual and corporate taxation.
Miguel Teixeira de Abreu is the founding partner of independent law firm Abreu Advogados, which was established in 1993. The firm comprises 200 lawyers based in offices across Lisbon, Oporto and Madeira.
The firm provides services in banking and finance law, competition, regulatory and EU law, corporate and commercial law, employment law, intellectual property and IT Law, litigation, public law and environmental law, real estate law, sports law, and tax law.
Tiago Almeida Veloso is a key contact and tax partner at Baker Tilly Portugal in Lisbon. He joined the firm in 2009 and worked at Deloitte in the past.
Clients are multinationals from diverse sectors, which benefit from access to the firm's international network.
Tax services are offered within the areas of corporate tax, tax disputes, tax incentives, transaction structuring and due diligence, international tax services, setting up global and regional holding companies, creation of tax efficient structures, IP rights and cross-border M&A, transfer pricing (TP) services such as documentation, defence of TP policies and advance pricing agreement (APA) negotiation, and private clients services.
Caiado Guerreiro & Associados has headquarters in Lisbon, in addition to offices in Oporto and Faro. The firm also has offices in Portuguese-speaking cities of Luanda, Angola and Maputo, Mozambique, as well as an office in Beijing, China.
The firm assists clients the areas of tax, in particular corporate income tax, personal income tax, VAT, excise duties, and stamp duty and on issues ranging from transfer pricing to double taxation.
Campos Ferreira, Sá Carneiro & Associados is highly recommended by its peers. The practice was formed in late 2009 and comprises individuals formerly from two large, reputable law firms in the Iberian Peninsula.
Partner Bernardo Mota is a key contact at the firm, which he joined the year it formed. He advises on corporate and commercial matters, M&A, real estate, and private equity.
The practice offers clients services within banking and finance, corporate and commercial, litigation and arbitration, European and competition, M&A, real estate, capital markets, criminals, administrative offences and compliance, private equity, restructuring and insolvency.
CMS Rui Pena & Arnaut in Lisbon is led by managing partner José Arnaut. Senior lawyer Rui Pena is another key contact at the practice.
Diogo Ortigão Ramos is managing partner of Cuatrecasas, Gonçalves Pereira's tax department. The Portuguese branch comprises three partners and 13 other professionals, who work in the areas of indirect tax, corporate tax, disputes, compliance and accounting. Two experts joined the team in the past year.
Ramos, Tânia de Almeida Ferreira, Ana Farinha and Ana Janine assisted Artá Capital in March 2017. The $76 million corporate tax case involved tax structuring and negotiation of the acquisition of Energyco and Gascan from Eficácia Verde SGPS, a member company of Explorer Investments II. The team also advised the client in relation to tax structuring of the financing granted by BPI, BBVA and Bankinter and on management package tax-related incentives.
Pedro Vidal Matos and Sónia Fernandes Martins advised Grünenthal Iberia in January 2017. The $850,000 litigation case arose when Portuguese tax officials sought to recover withheld tax from an inbound dividend distribution from a Portuguese subsidiary to its parent company. The team proved that the Portuguese official's act of withholding tax was an illicit action. They also demonstrated that it was tantamount to unlawful discrimination of foreign shareholders, due the shorter obligated minim withholding period for domestic shareholders to secure dividend exemption.
Deloitte's tax branch is led by managing partner Carlos Loureiro. The firm has offices in Lisbon, Oporto, and Luanda, Angola.
The tax branch comprises 43 partners and 543 additional experts. The tax compliance and accounting subdivision of 324 professionals is the main tax focus, with 168 professionals dedicated to corporate tax work and 36 dedicated to indirect tax.
The team is known for its expertise in transfer pricing, VAT, personal taxes, incentives and international tax. A full range of tax services is offered to clients in combination with access to an international network of experts.
Partner João Espanha is the founding partner of Espanha e Associados, where he manages the financial team. He specialises in the areas of finance, insurance and tax.
Tax services include assistance in compliance areas such as due diligence, model reviews, tax refund requests, and transfer pricing issues.
EY's tax team is managed by partner Carlos Lobo. The firm has offices in Lisbon and Oporto. Lobo joined as head of tax in 2012. Previously he was a professor at the University of Lisbon.
The team is well-practiced in advising domestic and international clients and multinational corporations from diverse sectors.
The firm is proficient in all tax disciplines, including business tax, indirect tax, international tax, transaction tax, and tax-related issues associated with human capital and compliance and reporting
Clients benefit from EY's international network and advice on global tax issues.
Partner Diogo Monteiro is the head of FCB Sociedade de Advogados in Lisbon. He joined the firm in 2004, and became a partner in 2009. He has been active in law for nearly 20 years.
The team assists clients in a broad range of local and global tax issues. The firm is present in Lisbon, Oporto, Faro, Luanda in Angola, Maputo in Mozambique and also has an office in Madrid, Spain.
Galhardo Vilão Torres is located in Lisbon. The firm focuses on financial transactions services, taxation and private wealth. Cristina Vilão is the founding managing partner of the firm, she has been active in tax over 20 years.
Fernando Castro Silva is the managing partner of the tax department at Garrigues, Taxand Portugal. The team comprises two partners and 22 additional experts who offer a full range of tax services.
Castro Silva, associate Tiago Neves and lawyer Irene Abrantes assisted an investment fund listed on the Singapore Exchange Securities in June 1016. The $100 million corporate tax matter entailed the acquisition of a prime office building in Lisbon by NOS, a leading telecommunications company. The building was owned by Multi, a property re-developer specialising in shopping centres and office buildings across Europe.
Partner Pedro Braz advised Banco Espírito Santo in December 2016. The case came about in response to a $24 million extraordinary bank levy which was introduced in 2011 at the beginning of the Portuguese recovery plan under the EU and IMF. The input was calculated based on the liabilities of credit institutions. In this judicial litigation, the national bank levy assessment was challenged on the grounds that the resolved bank was no longer a credit institution, and the need to transfer the costs of any future failure did not exist, as it was an already resolved bank.
Grant Thornton's team in Portugal is led by Pedros Santos, who has been with the firm since 2006. Santos has a Big 4 background. The firm offers tax and transfer pricing services across its offices in Oporto, Lisbon and Funchal.
Clients benefit front Grant Thornton's global organisation which covers more than 130 member entities. The firm advises companies on local taxes, direct international tax, global mobility services, international indirect tax, private and individual client services, fiscal policy and transfer pricing.
Luís Magalhães is the partner-in-charge of KPMG's tax department in Portugal. The branch comprises 12 partners and 174 other experts, split between units of indirect tax, corporate tax, financial services, personal advisory services, transfer pricing, incentives, compliance and accounting.
The team assisted in the 'Seed Programme', a tax incentive which aims to promote the acquisition of share capital in start-ups founded in Portugal less than five years ago. Under this tax regime, a deduction to the personal taxable income may be considered in the amount of 25% of the eligible investments carried out in the tax period. This deduction is limited to 40% of the income assessed. This tax incentive is limited to €25,000 ($30,000) per taxpayer and can be carried forward for two years. In order to ensure a stable and reliable capital structure, this regime establishes special disposals regarding the maintenance of share capital and the taxation of the capital gains obtained in a divestment scenario.
In another project, the tax group assisted a real estate investment fund in restructuring transactions. The solution was to restructure alternative liquidation of such funds without triggering real estate transfer tax.
Rui Camacho Palma is the managing partner at Linklaters in Portugal. Palma works alongside four tax experts; they offer tax services in the areas of indirect, corporate and disputes.
Palma and Inês Bento worked on a tax dispute in May 2017. The team represented a client in arbitration proceedings against an additional corporate income tax assessment issued by the Portuguese tax authorities. The official's justification was that the taxpayer failed to comply with the arm's-length principle related to transfer pricing rules and intra-group loan agreements specifically. The defence was justified through a comparison of interest rates applied between unrelated parties during the IMF financial assistance programme, among other aspects.
Independent law firm MGRA is present in the Algarve, Lisbon and Viseu in Portugal. The team advises companies, banks, private investors and individuals in planning litigation and infractions.
The tax department at Morais Leitão, Galvão Teles, Soares da Silva & Associados (MLGTS) is co-managed by partners Francisco de Sousa da Câmara and António Xavier. The branch comprises six partners and 21 additional professionals offering clients a full range of tax services.
Tax lawyer Maria Quintela advised Deutsche Alternative Asset Management (UK) Limited in November 2016. The €377 million corporate tax deal entailed the sale of the Group Empark, the main car parking operator in Portugal.
De Sousa da Câmara and tax lawyer Andreia Pereira advised Somincor, a subsidiary of Lundin Mining Corporation, in October 2016. The €26 million tax dispute arose when tax officials challenged the corporate tax matters related to a mining restructure.
Xavier and partner Isabel Fidalgo assisted RAR Group in December 2015. The €831 million indirect tax case arose from the implementation of a cash pooling arrangement, in order to allow centralised cash management and mitigate tax contingencies.
Partner Nuno de Oliveira Garcia is the head of the tax team of five at NGMS & Associados – Andersen Tax & Legal in Lisbon.
Senior lawyer Ana Pinto Morais assisted Saipem International BV, CB&I Oil & Gas Europe BV and Chiyoda Corporation in a $3 million project in October 2016. The team assisted on cross-border transactions, between Japan and the Netherlands in Madeira. They assisted in the incorporation of an oil and gas company in the International Tax Centre of Madeira. The shareholders were based in Japan and investing in Portugal for the first time. The deal entailed several double tax treaties.
De Oliveira Garcia, Morais and trainee lawyer Suheil Salém are advising AGECOP, a copyrights artists Portuguese agency. The $1.6 million tax dispute entailed copyright artist's special taxation duties levied to Samsung, and the decision to challenge the payment with the use of EU jurisprudence trends.
NGMS already had a strong tax practice before becoming part of Andersen Tax & Legal in May 2017, will add new service lines in transfer pricing and international tax compliance soon. The firm will be formally ranked in next year's edition of World Tax once the effects of the association can be fully assessed.
Joao Marques Pinto, of counsel, is a key contact at pbbr. Pinto has more than 20 years of experience working within corporate tax, international tax law, real estate, foreign investment, financial services, corporate tax, restructuring, and M&A.
PLMJ's tax group in Lisbon is led by managing partner Nuno da Cunha Barnabé. He joined the firm in 2000, having previously worked at Deloitte. The tax team comprises four partners and 18 additional tax experts.
Partner Miguel Reis and senior associate Mafalda Moreira advised Finerge Gestão de Projetos Energéticos, an electricity producer and distributer which operates wind farms and co-generation plants, in March 2016. The €1 billion corporate tax deal involved designing the structure and financing for an acquisition. The team took into account the tax considerations in Portugal and Luxembourg.
Partners João Ramalho and Serena Neto and senior associate Priscila dos Santos assisted a Portuguese subsidiary of Meag Munich Ergo Asset Management. The tax dispute was taken to the European Court of Justice (ECJ) and the Arbitration Tribunal. It concerned Portuguese VAT assessments from 2011 to 2013 worth up to €1.5 million. The team challenged VAT inputs recovered. The initial case before the Portuguese Almada Tax Court was upheld in full in October 2016. If the ECJ rules in favour of the client, it will significantly impact the real estate industry, and VAT treatment of real estate transactions.
PwC has been present in Portugal for more than 50 years. The firm has close ties with partner firms in Portuguese-speaking countries such as Angola and Cape Verde.
The tax team in Portugal comprises more than 200 professionals, with 22 partners based in Lisbon. Partner Jaime Esteves leads the tax practice. Esteves has been with PwC since 1988 and has been active in tax for more than 20 years. Partner Paulo Ribeiro is another key tax contact in Portugal.
The firm provides individuals and multinationals a comprehensive range of tax services including corporate tax, international tax, tax planning, transfer pricing, and indirect tax.
Ricardo da Palma Borges & Associados (RPBA) is managed by Ricardo da Palma Borges. The boutique firm offers niche services to Portuguese and international companies. Services include advice on royalties, business restructuring, foreign investment structuring in Portugal and abroad, cross-border transfers, disclosure, tax optimisation and reduction of compliance costs associated with offshore income.
Rogério Fernandes Ferreira & Associados is headed by managing and founding partner Rogério Fernandes Ferreira. The team comprises two partners, three senior associates, five trainee lawyers, six external consultants and 11 associates.
Ferreira and partner Marta Machado de Almeida advised a client in an indirect tax case in May 2016. The case, worth around €2 million, concerned the VAT treatment of early termination fees. The team's interpretation of the VAT framework could influence Portuguese and EU official VAT procedures.
Ferreira and senior associate Vânia Codeço advised a client in the tobacco industry in the past year. The team offered a legal opinion on tobacco tax and wealth statements, in relation to the introduction of a new brand of cigarettes in the Portuguese market and the particular obligations related to tobacco tax and wealth statements.
Telles de Abreu was established in 1936 and is led by managing Miguel Torres. The practice comprises 12 partners and 75 lawyers. The firm has offices in Lisbon and Oporto, and through its partnerships with law firms established across the world.
The firm has departments dedicated to commercial and corporate, real estate and urban planning, tax, litigation and arbitration, labour, M&A, competition, banking and finance, administrative and public tenders, credit recovery, insolvency, corporate recovery and evictions, maritime, and international work.
Filipe Romão is the managing partner of the tax department at Uría Menéndez – Proença de Carvalho in Portugal. The team comprises two partners and 14 other professionals, who offer clients a broad range of tax services.
Partner Marta Pontes and associate Martim Teixeira advised underwriters JP Morgan Securities, Goldman Sachs International, Credit Suisse Securities, Mediobanca – Banca di Credito Financiario and Merrill Lynch International in 2017. The project was a €1.3 billion corporate tax deal, related to the offer of share capital increase from Banco Comercial Português (Millennium BCP) to the underwriters. The transaction raised issues regarding the application of a special regime, under which deferred tax assets were allowed to be converted into tax credits.
Romão, consultant Cláudia Duarte and associate Mariana Ribeiro advised Bank of America/Merrill Lynch in November 2016. The team represented the client in judicial proceedings related to the non-deductibility of interest allowed on intra-group loans used to acquire corporations.
VdA Vieira de Almeida provides international advice to all Portuguese speaking countries and has an international network of legal partners.
The tax team is headed by managing partner Tiago Moreira. The group comprises four partners and 17 additional experts. Filipe Fernandes joined the team as a consultant in September 2016. He previously worked at EY.
The tax department is well known for its expertise in the sectors of banking and finance, M&A, real estate, oil and gas and tax controversy.
Moreira, partner Joaquim Lampreia, managing associate Francisco Matos and senior associate Frederico Antas advised Generg Group in December 2016 in a €2.5 million income tax dispute concerning wind turbine repayment. The team achieved five non-appealable court victories.
Partner Lampreia and senior associate Frederico Antas advised Idealmed in December 2016. The €2 billion healthcare dispute concerned a controversial issue which arose in relation to the use of medical services for purposes of VAT exemption. VdA fused its expertise within the field of VAT with tax arbitrage.
|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|
|Ricardo da Palma Borges & Associados (RPBA)|
|Tier 3 - Portugal|
|ABBC DLA Piper|
|Baker Tilly Portugal|
|Campos Ferreira, Sá Carneiro & Associados|
|Espanha e Associados|
|Tier 4 - Portugal|
|Caiado Guerreiro & Associados|
|CMS Rui Pena & Arnaut|
|FCB Sociedade de Advogados|
|Galhardo Vilão Torres|
|Telles de Abreu|
|Firms to watch|
|NGMS & Associados – Andersen Tax & Legal|