Beneficial owners eligible for tax relief- Portuguese debt securities

19.08.2019

The following types of beneficial owner are recognised for tax purposes in Portugal depending on the type of debt securities:

Domestic debt securities subject to Law 83/2013

Tax exemption

  • Central banks and government agencies;
  • International/Supranational organisations recognised by the Portuguese state;
  • Non-residents of Portugal eligible for tax exemption as per Law 83/2013;
  • Portuguese residents eligible for tax exemption.

Standard tax rates

  • Portuguese beneficial owners not eligible for tax exemption.

Non-residents of Portugal eligible for tax exemption as per Law 83/2013

The following beneficial owners that are not resident of Portugal for tax purposes are eligible for tax exemption based on the provisions of Law 83/2013:

  • Entities (individual and corporate) resident in a country or jurisdiction with which a DTT or a TIEA is in force:
    • An updated DTT list can be found on the government's website;
    • An updated TIEA list can be found on the government's website
  • Other non-resident entities not covered by any of the above that are not resident in a tax-haven country, according with Ministerial Order 292/2011 of 8 November 2011 (An updated tax haven list can be found on the government's website);

For income and redemption on debt securities subject to Law 83/2013, relief of withholding tax is available as follows:

  • A full relief at source; or
  • A full quick refund, if a full relief at source has not been obtained.

A full standard refund is not available through Clearstream Banking.

For income and redemption on debt securities subject to DL 193/2005, relief of withholding tax is available as follows:

  • A full relief at source; or
  • A full quick refund, if a full relief at source has not been obtained.

A full standard refund is not available through Clearstream Banking.

Portuguese residents eligible for tax exemption

The following beneficial owners that are resident of Portugal for tax purposes are eligible for tax exemption on all debt securities based on the following provisions of the Portuguese legislation:

  1. Art. 97 of CIRC (Corporate Income Tax Code) –Exemption from withholding tax.
  2. Art. 9 of CIRC – State, Autonomous Regions, local authorities, their associations governed by public law and social security federations and institutions.
  3. Art. 10 of CIRC – General Public Interest Companies, Charities and other non-governmental social entities.
  4. Art. 16 of EBF (Tax Incentives Statute) – Pension Funds and assimilated funds.
  5. Art. 21 of EBF – Retirement Savings Funds (FPR), Education Savings Funds (FPE), Retirement and Education Savings Funds (FPR/E).
  6. Art. 22, No. 10 of EBF (Tax Incentives Statute) – Tax Regime applicable to Portuguese Collective Investments Vehicles)
  7. Art. 23 - A of EBF – Venture Capital Investment Funds.
  8. Other legislation.

Portuguese residents not eligible for tax exemption

For interest and redemption payments under the application of Law 83/2013, final beneficial owners that are residents of Portugal for tax purposes but not eligible for tax exemption may apply for obtaining the standard tax rates of:

  • 25% for disclosed legal entities;
  • 28% for disclosed individuals.

Standard rates of withholding tax are available as follows:

  • A relief at source; or
  • A quick refund, if a relief at source has not been obtained.

A standard refund is not available through Clearstream Banking.

International/supranational organisations recognised by the Portuguese state

Relief of withholding tax on all domestic debt securities is available to beneficial owners that are international/supranational organisations recognised as such by the Portuguese law as follows:

  • A full relief at source; or
  • A full quick refund, if a full relief at source has not been obtained.

A full standard refund is not available through Clearstream Banking.

Standing instruction available for own accounts

Direct customers of Clearstream Banking that want to obtain tax exemption on all categories of Portuguese domestic debt securities may apply for a standing instruction provided that the customer:

  • Has the status of a supranational organisation recognised by the Portuguese state; and
  • Holds the Portuguese securities for itself as sole beneficial owner having the status of a supranational organisation recognised by the Portuguese state; and
  • Submits the required certification to Clearstream Banking by the deadlines set for the respective income payment.

Central banks and government agencies

Relief of withholding tax on all domestic debt securities is available to beneficial owners that are central banks or government agencies, resident or not for tax purposes in a tax-haven country or territory as follows:

  • A full relief at source; or
  • A full quick refund, if a full relief at source has not been obtained.

A full standard refund is not available through Clearstream Banking.

Standing instruction available for own accounts

Direct customers of Clearstream Banking that want to obtain tax exemption on all categories of Portuguese domestic debt securities may apply for a standing instruction provided that the customer:

  • Has the status of a central bank or government agency (not in Portugal); and
  • Holds the Portuguese securities for itself as sole beneficial owner having the status of a central bank or government agency (not in Portugal); and
  • Submits the required certification to Clearstream Banking by the deadlines set for the respective income payment.

The certification requirements vary depending on whether the central bank / government agency is domiciled or not in an OECD Member State.