General information - types of securities, deadlines, other market specifics - Portugal

29.08.2019

Types of securities eligible in Clearstream Banking

The eligible securities issued in Portugal are as follows:

  • Government bonds:
    • Bilhetes do Tesouro (BT);
    • Fundos de Investimento Publico (FIP);
    • Obrigações do Tesouro (OT);
    • Obrigações do Tesouro de Rendimento Variável (OTRV);
  • Corporate bonds;
  • Listed equities;
  • Warrants.

Types of beneficial owner

The types of eligible beneficial owner recognised for tax purposes in Portugal vary according to security type, as follows:

For domestic debt securities subject to Law 83/2013

Beneficial owners eligible for exemption from tax

  • Central banks and government agencies;
  • International/Supranational organisations recognised by the Portuguese state;
  • 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):
  • Portuguese residents eligible for tax exemption. The codes for Portuguese tax-exempt entities are the following:
  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.

Beneficial owners eligible for reduced tax rate

Portuguese beneficial owners not eligible for tax exemption may apply for the following reduced tax rates after submission of the requested information by the prescribed deadlines:

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

Important note: Non-Portuguese beneficial owners holding debt securities subject to Law 83/2013 cannot apply for reduced tax rates via Clearstream Banking. For such beneficial owners the available rates are either 0% (if eligible and based on the relief at source or quick refund procedures), or 35% (if not eligible for tax exemption or undisclosed).

Beneficial owners taxed at maximum tax rate

  • Residents of countries considered as tax havens by Portuguese legislation and that have no DTT or TIEA with Portugal;
  • Non-disclosed beneficial owners.

For equities:

Beneficial owners eligible for exemption from tax

  • EU/EEA pension funds;
  • International / Supranational organisations recognised by the Portuguese state;
  • Central banks and government agencies;
  • Non-residents of Portugal recognised as tax-exempt under Portuguese legislation;
  • Portuguese residents eligible for tax exemption. The codes for Portuguese tax-exempt entities are the following:
  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.

Beneficial owners eligible for reduced tax rate

  • Residents of a Double Taxation Treaty (DTT) country
  • Beneficial owners that are not resident of a country or territory considered as tax-haven by the Portuguese legislation may apply for the following reduced tax rates after submission of the requested information by the prescribed deadlines:
    • 25% for disclosed legal entities;
    • 28% for disclosed individuals.

Beneficial owners taxed at maximum tax rate

  • Non-disclosed beneficial owners.

Portuguese Tax Identification Number

Any foreign or domestic investor operating in the Portuguese market is required to have a Portuguese Tax Identification Number (PT TIN). In agreement with the Portuguese law (article 3 of Portaria 386/98, 3 of July), the same investor can only have one PT TIN.

Clearstream Banking’s local depository (BNP Paribas Securities Services) is acting as a withholding agent in Portugal and is authorised by the Portuguese Tax Authorities to request PT TINs for non-Portuguese resident investors. In order to follow such process, customers applying for relief at source, quick refund or standard refund on behalf of beneficial owners that have not yet been allocated with a PT FIN, must submit together with the requested certificates a duly completed PT TIN Request.

Deadlines for obtaining relief or reclaiming withholding tax

Relief at source

The deadline to apply for relief at source depends on the type of security and applicable legislation, as follows:

Type of security

Deadline for receipt by Clearstream Banking

Debt securities –
Law 83/2013

At least one business day before the respective payment date, by 10:00 CET.

Equities

At least one business day before the record date of the respective payment, by 10:00 CET.

Quick refund

The deadline for reclaiming withholding tax using the quick refund procedure depends on the type of security and applicable legislation:

Type of security

Deadline for receipt by Clearstream Banking

Debt securities –
Law 83/2013

The deadline for reclaiming withholding tax via the quick refund procedure through Clearstream Banking depends on the fiscal residency and eligibility of the beneficial owner for tax exemption or reduced tax rate, as follows:

  • For non-residents of Portugal entitled to full quick refund of withholding tax under the application of the Special Debt Regime: at the latest 5 business days before the sixth month after the applicable payment date, by 10:00 CET; or
  • For residents of Portugal entitled to full quick refund of withholding tax under the application of the 2008 State Budget Law: at the latest 10:00 CET on the 10th of the month (or the last business day prior to the 10th, if the latter is not a business day) following the month in which the interest payment was made; or
  • For residents of Portugal entitled to reduced rate of withholding tax (25% / 28%): at the latest 10:00 CET on the 10th of the month (or the last business day prior to the 10th, if the latter is not a business day) following the month in which the interest payment was made.

Equities

At the latest, 10:00 CET on the 10th of the month (or the last business day prior to the 10th, if the latter is not a business day) following the month in which the dividend payment was made.

Standard refund

Important note: Full standard refund is not available via Clearstream Banking.

The statutory deadline for reclaiming withholding tax on dividends using the treaty standard refund procedure is two years from the end of the year in which the withholding of the respective tax took place.

The deadline by which Clearstream Banking must receive the documentation for application for a standard refund of withholding tax is at the latest three months before the statutory deadline. All refund applications received after this deadline will be processed by Clearstream Banking on a "best efforts" basis. However, in such cases, Clearstream Banking accepts no responsibility for forms that have not reached the Portuguese Tax Authorities (the “PTA”) by the date considered being the statute of limitations deadline.

Furthermore, Clearstream Banking will apply an extra charge for applications received less than three months before the statutory deadline.

When are refunds received?

  • Quick refund:
    The estimated time for receiving a quick refund depends on the type of securities as follows:
    • Debt securities: two weeks from the date that Clearstream Banking receives the certified documents.
    • Equities: by end of the month of the date that Clearstream Banking receives the certified documents.
  • Partial standard refund:
    There is no estimated time for receiving a refund via the partial standard refund application and customers are strongly encouraged to use the relief at source or quick refund procedures.

    However, according to the clarifications included in Circular Letter 4/2014, the refund of withholding tax must be made by the PTA until the end of the third month after the delivery of the form and the elements that prove the assumptions of the exemption to the PTA, and in the case the PTA does not comply with this time frame compensatory interests calculated are added to the amount to be reimbursed, at the same rate as applicable to compensatory interest in favour of the State. For the purpose of calculating the period referred to above, it is considered that it is interrupted when the procedure is stopped by a reason attributable to the beneficial owner.

    Clearstream Banking will assist customers with the registration of the final beneficial owners in the books of BSNP, but accepts no responsibility for the acceptance or non-acceptance by the tax authorities of the refund applications nor for the reimbursement of taxes paid.

Notes on tax reclaims

Customers warrant the completeness and accuracy of the information they supply to Clearstream Banking.

It is the customer's responsibility to determine any entitlement to a refund of tax withheld, to complete the forms required correctly and to calculate the amount due. Clearstream Banking is under no obligation to carry out any investigation in respect of such information.

With respect to tax reclaims in general, customers are reminded that Clearstream Banking accepts no responsibility for their acceptance or non-acceptance by the tax authorities of the respective country. It is the customer's responsibility to determine any entitlement to a refund of tax withheld, to complete the forms required correctly, and to calculate the amount due.