Portugal: New tax treaty with Kuwait
A Double Taxation Treaty (DTT) between Portugal and Kuwait was signed on 23 February 2010 and came into force on 5 December 2013.
The treaty generally applies 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 comes into force (from 1 January 2014);
- In respect of other 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 comes into force.
The DTT tax rates may vary in particular circumstances but will not exceed the following:
Debt securities: 10%
Equities: 10%
Important note:
Kuwait is currently listed as a tax-haven country by the Portuguese Tax Authorities.
However, based on the provisions of the State Budget Law 2013, tax-haven countries that have signed a DTT or a Tax Information Exchange Agreement (TIEA) with Portugal are automatically delisted. As a consequence, entities (individual and corporate) resident in a country or jurisdiction for which a DTT or TIEA with Portugal is in force are, provided that the requirements are duly verified, exempted from Portuguese withholding tax.
In these circumstances, residents of Kuwait are, after submission of the requested certification by the prescribed deadlines, eligible for:
- Exemption from tax on Portuguese domestic bonds held with Clearstream Banking (according to art.17 of DL 193/2005 revised by Law 83/2013) as follows:
- As of 1 January 2014 for securities issued after 1 January 2014; and
- As of the second interest payment in 2014 for securities issued before 1 January 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. |