Portugal

General WHT rates

Notes

1. For residents, tax withheld constitutes a payment on account of final corporate or individual income tax due. For non-residents, tax withheld is the final tax, except for property income, in which case it is a payment on account.
2. Not subject to WHT in the case of holdings of at least 10% owned for at least one year.
3. Not subject to WHT if the non-resident entity meets the following requirements (the rule also applies to a PE in another EU or EEA member state of an entity that meets the following requirements):
   • Directly, or directly and indirectly, holds at least 10% of the share capital or of voting rights in the Portuguese subsidiary (25% in the case of a parent company resident for tax purposes in Switzerland), for a minimum period of one year (two years in the case of a parent company resident for tax purposes in Switzerland).
   • Is resident in an EU member state, an EEA member state (bounded to administrative cooperation in tax matters similar to the EU’s), or a state with which Portugal has concluded a tax treaty that foresees exchange of information.
   • Is subject to and not exempt from an income tax mentioned in Article 2 of Council Directive 2011/96/EU, dated 30 November, or a tax similar to CIT, and in case of a resident in a tax treaty state, the applicable legal rate is not lower than 60% of the standard CIT rate.
4. WHT rate is increased to 35% when the income is paid or due to entities resident in black-listed jurisdictions.
5. Not subject to WHT if the EU Interest & Royalty Directive 2003/49 applies.
6. WHT rate is increased to 35% when the income is paid in bank accounts open in the name of one or more account holders but on behalf of non-identified third parties.
7. Not subject to WHT if a tax treaty is applicable.

Tax treaty rates

Tax treaties reduce the above-mentioned rates as follows:

Notes

1. The lower of the listed rates applies to royalties when the beneficiary holds 50% or less of the paying company's share capital.
2. There is no WHT on dividends if the EU Parent/Subsidiary Directive applies.
3. The lower of the listed rates applies to dividends when the beneficiary directly holds 25% or more of share capital. Depending on each DTT, a two year holding period may be required.
4. The lower rate applies to interest on debentures raised in France after 1 January 1965 or on significant loans or debentures raised in Portugal or abroad under major development projects listed in the treaty annex.
5. The lower of the listed rates applies to bank loans, but if interest is payable from Portugal, the bank loans must qualify as being of economic or social interest or fall under an approved development plan.
6. The lower of the listed rates applies to interest received by financial institutions.
7. The lower of the listed rates applies to technical assistance.
8. The lower of the listed rates applies on interest related to loans with a minimum maturity of two years.
9. The rate of 5% regarding interest applies to bonds interest or other securities transacted in the stock market. The rate of 10% applies to loans from banks or insurance companies or credit selling of equipment.
10. The rate of 5% regarding royalties applies to equipment lease.
11. The rate of 10% applies if the company that is paying the dividends is a resident of Israel and the dividends derive from profits that are subject to tax in Israel at a rate that is lower than the normal rate of Israel company tax. The rate of 5% applies if the beneficial owner is a company that directly holds at least 25% of the capital of the company paying the dividends.
12. The treaty is signed but not yet in force.
13. The lower of the listed rates on dividends applies if the beneficial owner is a company (other than a partnership) that directly holds at least 10% of the capital of the company paying the dividends. Depending on each DTT, a one year holding period may be required. In the case of Saudi Arabia, the 10% minimum holding requirement is waived in case the beneficial owner is the state or a public entity.
14. The rate of 5% on dividends applies if the beneficial owner is a company (other than a partnership) that for an uninterrupted period of at least 12 months prior to the payment of the dividends or if the company paying the dividends has existed for less than 12 months, during the lifetime of the company, directly holds at least 10% of the capital of the company paying the dividends, or if the beneficial owner of the dividends is: (i) in the case of Portugal, the state, a political or administrative subdivision, or a local authority thereof, or the Bank of Portugal; and, (ii) in the case of Norway, the government of Norway, a political or administrative subdivision, or a local authority thereof, or the Central Bank of Norway.
15. A WHT rate of 5% on dividends applies in case of shareholdings of at least 25% on the company distributing the dividends, as well as for an exemption on dividends, in case of shareholdings of at least 25% held for at least two years. An exemption from WHT is also foreseen regarding interest and royalties, when paid between associated companies (shareholdings of at least 25% held for at least two years), in line with the Agreement between the European Community and the Swiss Confederation.
16. The lower of the listed rates applies to dividends if the beneficial owner is a company (other than a partnership) that (i) directly holds at least 10% of the capital of the Portuguese company paying the dividends or (ii) directly controls at least 10% of the voting rights of the Peruvian company paying the dividends.
17. The lower of the listed rates applies to interest related to credits of any nature granted by a financial institution or, in the case of the Ivory Coast, Saudi Arabia, the Sultanate of Oman, Vietnam, and São Tomé and Principe, when the beneficial owner or the entity paying the interest is the state or other public body (including the central bank) of the contracting states.
18. The lower of the listed rates applies to royalties paid for technical assistance provided in connection with the use of, or the right to use of, author’s rights, or information concerning industrial, commercial, or scientific experience.
19. The rate of 5% on dividends applies if the beneficial owner is: (i) in the case of Portugal, the state, a political or administrative subdivision, or a local authority thereof, or the Bank of Portugal; (ii) in the case of the Sultanate of Oman, its government, the Central Bank of Oman, the state’s general reserve fund, or the Omani Investment Fund. The rate of 10% applies if the beneficial owner is a company (other than a partnership) that directly holds at least 10% of the capital of the company paying the dividends.
20. The rate of 5% on dividends applies if the beneficial owner is a company (other than a partnership) that directly holds at least 70% of the capital of the company paying the dividends. The rate of 10% on dividends applies if the beneficial owner is a company (other than a partnership) that directly holds at least 25% of the capital of the company paying the dividends.
21. The lower rate on dividends applies if the beneficial owner holds, directly or indirectly, at least 5% of the capital of the company paying the dividends.
22. The rate of 5% applies to royalties paid in connection with the use of, or the right to use of, author’s rights.
23. The rate of 8% applies in case of 25% ownership or more, and provided that the participation is held during the previous 365 days.
24. The treaty with Sweden was terminated effective as of 1 January 2022. Previously, WHT on dividends, interest, and royalties was limited to 10%.