Beneficial owners eligible for tax relief - Portuguese debt securities - securities held in CBF
The following types of beneficial owner are recognised for tax purposes in Portugal depending on the type of debt securities:
Domestic debt securities subject to Law 83/2013
Entities eligible for tax exemption as per Law 83/2013
Relief at source of withholding tax on income and redemption from debt securities is available to the following beneficial owners eligible to tax exemption based on the provisions of Law 83/2013.
If relief at source has not been obtained, a reclaim of the relevant amount of withholding tax is available through LuxCSD via the quick refund procedure.
Non-residents of Portugal
- Entities (individual and corporate) resident in a country or jurisdiction with which a DTT or a TIEA is in force:
- Other non-resident entities not covered by any of the above that are not resident in a tax-haven country, according with Ministerial Order 292/2011 of 8 November 2011 (An updated tax haven list can be found on the government's website);
- Credit institutions, financial companies, pension funds, and insurance companies domiciled in an OECD Member State or in a DTT country.
- Collective Investment Vehicles (CIVs) domiciled in an OECD Member State or in a DTT country.
- Central banks, public law agencies, public law entities or International/Supranational organisations recognised by the Republic of Portugal (or a body of such recognised international/supranational organisation to whom the same immunities and privileges should be availed to)
Standing instruction available for own accounts
Direct customers of LuxCSD that want to obtain tax exemption on all categories of Portuguese domestic debt securities may apply for a standing instruction provided that the customer:
- Has the status of a Central banks, public law agencies, public law entities or International/Supranational organisations recognised by the Republic of Portugal; and
- Holds the Portuguese securities for itself as sole beneficial owner having the status of a Central banks, public law agencies, public law entities or International/Supranational organisations recognised by the Republic of Portugal; and
- Submits the required certification to LuxCSD by the deadlines set for the respective income payment.
Portuguese residents eligible for tax exemption
The following beneficial owners that are resident of Portugal for tax purposes are eligible for tax exemption on all debt securities based on the following provisions of the Portuguese legislation:
- Art. 97 of CIRC (Corporate Income Tax Code) –Exemption from withholding tax.
- Art. 9 of CIRC – State, Autonomous Regions, local authorities, their associations governed by public law and social security federations and institutions.
- Art. 10 of CIRC – General Public Interest Companies, Charities and other non-governmental social entities.
- Art. 16 of EBF (Tax Incentives Statute) – Pension Funds and assimilated funds.
- Art. 21 of EBF – Retirement Savings Funds (FPR), Education Savings Funds (FPE), Retirement and Education Savings Funds (FPR/E).
- Art. 22, No. 10 of EBF (Tax Incentives Statute) – Tax Regime applicable to Portuguese Collective Investments Vehicles)
- Art. 23 - A of EBF – Venture Capital Investment Funds.
- Other legislation.
Portuguese residents not eligible for tax exemption
For interest and redemption payments under the application of Law 83/2013, final beneficial owners that are residents of Portugal for tax purposes but not eligible for tax exemption may apply for obtaining the standard tax rates of:
- 25% for disclosed legal entities;
- 28% for disclosed individuals.
Standard refund for all above mentioned beneficial owners: The standard refund process is still being analysed with the Portuguese tax authorities. Further information will be provided at a later stage.