Portugal: New tax treaty with Panama

This Taxflash is intended to provide customers with general information gathered from different sources that are generally believed to be reliable. Clearstream Banking S.A. does not guarantee the accuracy or completeness of the information and does not undertake to keep it up to date. Use of the information made available in this Taxflash is at the customer’s own risk and Clearstream Banking S.A., its subsidiaries and affiliates expressly disclaim any liability for any errors or omissions reflected herein. The information in this Taxflash does not constitute legal or tax advice.

The Double Taxation Treaty (DTT) between Portugal and Panama was signed on 27 August 2010 and came into force on 10 June 2012.

The treaty generally applies from 1 January 2013.

The DTT tax rates may vary in particular circumstances but will not exceed the following:

Debt Securities:10%

Important note:

Panama is currently listed as a tax haven by the Portuguese Tax Authorities, as published in Diário da República n° 214 (see also our Announcement A11172, dated 10 November 2011) and its residents are, therefore, not eligible to hold Portuguese domestic bonds with Clearstream Banking (according to art.17 of DL 193/2005).

With regard to the implementation dates mentioned above, residents of Panama can hold Portuguese equities and, provided that the required certification is submitted, they could benefit from the respective DTT rate. If such documentation is not submitted, beneficial owners of Portuguese equities who are residents of Panama will be taxed at 30% (the rate for residents of tax havens).