Portugal: State budget law 2017: Impact on capital gains tax - update

12.05.2017

Clearstream Banking1 would like to inform customers that effective

immediately

the provisions of Article 27 of the Portuguese Tax Benefit Statute are still applicable leading to an exemption of capital gains derived by non-residents from the sale of equities or debt securities.

This is further to our announcement A17020 of 20 January 2017.

Background

In January 2017, Clearstream Banking was informed that the Portuguese State Budget Law for 2017 did not extend the application of Article 27 ruling the exemption of capital gains tax and which had expired on 31 December 2016.

The Portuguese tax authorities (“PTA”) have since then issued Circular-Letter 5/2017 confirming that Article 27 remains in force. The PTA clarified that although the application of Article 27 was not explicitly extended by the Portuguese State Budget Law for 2017, the changes introduced in March 2016 to the Portuguese State Budget Law for 2016 automatically renewed its application for another five (5) years, until at least 2020.

Impact on customers

No capital gains tax is applicable to the sales of equities or debt securities.

Further information

For further information on capital gains tax and Article 27 of the Portuguese Tax Benefit Statute, please consult your tax advisor.

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1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for Clearstream Banking Frankfurt (CBF) customers using CreationOnline), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.