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Newsletter | Articles
  Portugal – 2009 Budget Proposals
Included in Portugal’s 2009 Budget proposals are:
- A reduction in Corporate Tax. Currently this is charged at a flat rate of 25 per cent on company profits. The proposal is to introduce a lower rate of 12.5 per cent on the first €12,500 of profit, which would make Portugal one of the most tax efficient European countries in which to run a business.
- The lifting of banking secrecy. It is proposed that in cases of seemingly unexplainable signs of wealth or increase in assets (e.g. an individual earning €2000 per month buys an Aston Martin worth €200,000) the Finance Department will be empowered to investigate an individual’s bank account without the individual’s consent. It is further proposed that even if the individual appeals against the decision to investigate it will not stop the investigation from continuing. ILS’s Portugal office can offer guidance.
- Property Transfer Tax – IMT. The current exemption limit of €87,500 before the sliding scale of IMT is applied on the acquisition of an urban building or apartment designed for permanent habitation will be increased to €89,700. Also, the value to which the sliding scale is applied will be raised to 2.5 per cent. Property transfer tax can be avoided by owning a property through a structure. Ideal for property holding are UK and American (often Delaware, but some other states are also appropriate) companies. ILS’s Portugal office can tell you how to do this.
- Reinvestment of capital gains. It is proposed that the capital gain realised when a property is sold may be offset against the purchase of another property if effected within two years of the sale. This rule will apply equally to individuals and companies.
For further information contact Paulo Réfega.
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