Portugal: New tax treaty with Peru
Notice 48 of 3 April 2014 states that the constitutional formalities required for the entry into force of the agreement between the Portuguese Republic and the Republic of Peru for the Avoidance of Double Taxation and the prevention of Fiscal Evasion with respect to Taxes on Income have been completed.
The Double Taxation Treaty (DTT) between Portugal and Peru was signed on 19 November 2012 and will come into force on 12 April 2014.
The provisions of the treaty (article 27) generally apply in Portugal as follows:
- In respect of taxes withheld at source, on/after the first day of January of the calendar year immediately following that in which the DTT enters into force (from 1 January 2015);
- In respect of others taxes , as to income arising in any fiscal year beginning on/after the first day of January of the year immediately following the year in which the DTT enters into force.
The DTT tax rates may vary in particular circumstances but will not exceed the following:
| Debt Securities: | 15% |
| Equities: | 15% |
Important note:
Based on the provisions of the State Budget Law 2013, entities (individual and corporate) resident in a country or jurisdiction with which a DTT or a Tax Information Exchange Agreement (TIEA) with Portugal is in force are, provided that the requisite details are duly verified, exempted from Portuguese withholding tax.
In these circumstances, residents of Peru are, after submission of the required certification within the prescribed deadlines, eligible for:
- Exemption from tax on income from Portuguese domestic bonds held with Clearstream Banking (according to article 17 of DL 193/2005 revised by Law 83/2013):
- For bonds issued on/after 1 January 2014, as of 1 January 2014; and
- For bonds issued before 1 January 2014, as of the second interest payment in 2014;
and - Reduced rates on Portuguese equities by virtue of a DTT.
| 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. |