Portugal: New tax regime for loan funds - A milestone for Portuguese financial sector

The special tax regime applicable to Loan Funds was finally enacted this Summer, paving the way to a new form of lending to Portuguese borrowers.

Remote working has increased significantly since the beginning of COVID-19.

On 17 June 2021, the European Court of Justice issued a ruling on joined Cases C-58/20 and C-59/20 (the “DBKAG & K decision”), stating that both the right to use software and specific administrative services may fall within the exemption provided for in that provision.

The digital age has led to a growing need to combat VAT fraud, minimize the VAT gap and modernize the EU's VAT system in response to the demands of today’s digital economy.

As a result of the new amendments in Portugal, the contribution on single use packaging made of aluminium (or a multi-material containing aluminium) will apply from 1 September 2023.

The Portuguese Law No. 18/2022 approved on 25 August had relevant changes to Law No. 23/2007, also known as “the Foreigner’s Law”, introducing a new Portuguese visa type called the “Digital Nomad visa”.

The discussion on whether remote working could generate a permanent establishment (“PE”) dates back to 2012

The new Ministerial order has been effective since its publication (27 November 2021) and, in connection with TP documentation, is applicable for tax periods beginning 1 January 2021 or after.

The UK left the EU on 31 January 2020, but the real changes were felt from 1 January 2021 when the transitional period came to an end and EU rules on VAT, customs and the single market ceased to apply to transactions between the EU and the UK.

Portugal specifies the rights and obligations under the reverse-charge mechanism.

Since the amendment of the Portuguese tax law by the CJEU, income earned in Portugal by resident EU/EEA pension funds is exempt from corporate income tax. In order to benefit from the tax exemption, taxpayers must submit an administrative application to the Portuguese tax authorities within a two-year period, as well as meeting certain requirements and submitting a set of documents.

The Portuguese withholding tax provisions consist of a difference in treatment between resident and non-resident investment funds, which has been brought before national courts and the ECJ. Some Portuguese courts have already ruled that there is indeed a breach of EU law.

The shift to remote working entails several complex issues, as the Portuguese law and authorities may not accompany the pace of change of business and technology.

Decree and Law No. 28/2019 of February 15, 2019 (“DL 28/2019”) consolidates and updates Portuguese obligations for invoices and other tax-relevant documents.

Decree-Law No. 28/2019 of 15 February 2019 consolidates and updates Portuguese obligations for invoices and other tax-relevant documents

Breach of freedom of establishment regarding the Portuguese stamp tax on EU cross border short term loans

Overview of initiatives to adopt the OECD 15-point Action Plan

The Non-Habitual Tax Residents Regime (“NHR”) offers several tax benefits for a 10-year period to individuals relocating to Portugal