Portugal: State Budget Law 2012 approved by Parliament

Further to our TaxFlash T11081, dated 2 December 2011, and effective

1 January 2012

The withholding tax on fixed income and dividends is planned to increase from 21.5% to 25% for both resident and non-resident investors.

Background

On 30 November 2011 the Portuguese Parliament approved the State Budget Law for 2012.

The final version of the law is not yet available because it must be ratified by the President of the Republic and published in the Diàrio da Républica in order to become effective.

Impact on customers

The new withholding tax rate on fixed income and dividends is planned to increase from 21.5% to 25% for both resident and non-resident investors.

Currently this income is taxed at a rate of 21.5% unless it is paid or made available in bank accounts of undisclosed third parties, in this case the withholding tax rate is 30%.

As the final version of the law is not available we will continue to monitor the above-mentioned State Budget Law 2012 for any new developments and will keep you informed as more information becomes available.

Further information

For further information, please contact the Clearstream Banking¹ Tax Help Desk on:

or Clearstream Banking Customer Service or your Relationship Officer.

1. Clearstream Banking refers to Clearstream Banking, société anonyme, registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Register of Commerce and Companies under number B-9248 (CBL).