Portugal: State Budget Law 2013 ratified and published

The State Budget Law has been ratified by the President of Portugal and published in Diário da Républica on 9 December 2013 under Law 83/2013.

This follows our Announcement A13161, dated 23 October 2013.

The amendments implemented by the State Budget Law will come into force as follows:

• For securities issued on/before 31 December 2013, after the first coupon payment per security after 31 December 2013;
• For securities issued after 31 December 2013, as from 1 January 2014.

Impact on customers

The main changes impacting the current tax procedures of Clearstream Banking¹ for Portuguese debt securities based on Article 17 of Decree Law 193/2005 are as follows:

• The removal of holding restrictions on non-exempt beneficial owners;
• The removal of the disclosure requirement for non-resident tax-exempt beneficial owners;
• The abolition of withholding/reimbursing tax on settlement transactions for ICSD participants (such tax remaining applicable to CSD participants);
• The automatic delisting of tax-haven countries that have signed a Double Taxation Treaty (DTT) or a Tax Information Exchange Agreement (TIEA) with Portugal, such that entities (individual and corporate) resident in a country or jurisdiction with which a DTT or a TIEA is in force are, provided that the requisites are duly verified, exempted from Portuguese withholding tax;
• The clarification of the statutory deadline under the regime: two years from the end of the year in which the withholding took place;
• The extension of the quick refund deadline to the limit of six months (such limit currently 90 days).

In addition, more securities are integrated into the scope of Decree Law 193/2005 (for example, commercial paper and Eurobonds issued in centralised systems managed by international clearing systems).

Further information

The Portuguese Tax Authorities are expected to publish a Circular including clarifications of all the operational issues that fall under these new rules and new fiscal forms are expected to be approved and published. As soon as such details are available, we will publish the new tax procedures to be used for Portuguese debt securities as of the above-mentioned effective dates.

In addition, market participants are expected to define and agree a common understanding and procedure to be followed for Eurobonds issued by Portuguese issuers.

For further information, customers may contact the Clearstream Banking Tax Help Desk on:

or Clearstream Banking Customer Service or their Relationship Officer.

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1. Clearstream Banking refers collectively to Clearstream Banking AG, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500 (CBF) and Clearstream Banking S.A., 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).