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IN212 - Portuguese Double Taxation Treaties Summarised and Indicating Particularly Attractive Treaties
Companies licensed to operate within the legal framework of the Free Trade Zone of Madeira are Portuguese companies and the double taxation treaties concluded between Portugal and its treaty partners generally apply to Portuguese companies registered in Madeira. Not only is access to the treaty available, but also access to the EU Parent Subsidiary Directive.
Certain treaties are particularly advantageous and when combined with the benefits enjoyed by a Madeira licensed company, such advantages are further enhanced.
Particularly Attractive Treaties
- Double Taxation Treaty between Portugal and China
This treaty is unique with regard to the taxation of capital gains from the sale of shares. Taxation only occurs in the state where the seller is resident. This is contrary to other treaties signed by China. In the case of a Madeira licensed company, capital gains realised from the selling of shares in China would be taxed in Portugal, i.e. at the low tax rates (0% or 4%) available to Portuguese companies licensed in Madeira.
- Double Taxation Treaty between Portugal and Turkey
The treaty with Portugal allows for a withholding tax of 5% on dividends, unlike the majority of double taxation treaties signed by Turkey.
- Double Taxation Treaty between Portugal and Cape Verde
Portugal is the only country with a signed treaty with Cape Verde. Foreign investors into Cape Verde therefore use Portugal, more particularly Portuguese companies licensed in Madeira, to invest into Cape Verde.
- Double Taxation Treaty between Portugal and Mozambique
Portugal is one of only two countries with a signed treaty with Mozambique. Potential Investors into Mozambique can therefore use Portugal, more particularly Portuguese companies licensed in Madeira, to invest into Mozambique.
Table
|
Country |
Dividends |
Interest |
Royalties |
|
ALGERIA |
10% a) 15% b) |
15% |
10% c) |
|
AUSTRIA |
15% |
10% |
5% b) 10% c) |
|
BELGIUM |
15% |
15% |
10% |
|
BRAZIL
|
10% a) 15% b) |
15% |
15% |
|
BULGARIA |
10% a) 15% b) |
10% |
10% |
|
CANADA |
10% a) 15% b) |
10% |
10% |
|
CAPE VERDE |
10% |
10% |
10% |
|
CHILE |
10% a) 15% b) |
5% d) 10% e) 15% b) |
5% f) 10% b) |
|
CHINA |
10% |
10% |
10% |
|
CUBA |
5% a) 10% b) |
10% |
5% |
|
CZECH REPUBLIC |
10% a) 15% b) |
10% |
10% |
|
DENMARK |
10% |
10% |
10% |
|
ESTONIA |
10% |
10% |
10% |
|
FINLAND |
5% a) 10% b) |
15% |
10% |
|
FRANCE |
15% |
10% g) 12% b) |
5% |
|
GERMANY |
15% |
10% h) 15% b) |
10% |
|
GREECE |
15% |
15% |
10% |
|
HUNGARY |
10% i) 15% b) |
10% |
10% |
|
ICELAND |
10% a) 15% b) |
10% |
10% |
|
INDIA |
10% a) 15% b) |
10% |
10% |
|
INDONESIA |
10% |
10% |
10% |
|
IRELAND |
15% |
15% |
10% |
|
ISRAEL |
5% a) 10% j) 15% b) |
10% |
10% |
|
ITALY |
15% |
15% |
12% |
|
LATVIA |
10% |
10% |
10% |
|
LITHUANIA |
10% |
10% |
10% |
|
LUXEMBOURG |
15% |
10% k) 15% b) |
10% |
|
MACAU |
10% |
10% |
10% |
|
MALTA |
10% a) 15% b) |
10% |
10% |
|
MEXICO |
10% |
10% |
10% |
|
MOROCCO |
10% i) 15% b) |
12% |
10% |
|
MOZAMBIQUE |
15% |
10% |
10% |
|
NORWAY |
10% a) 15% b) |
15% |
10% |
|
THE NETHERLANDS |
10% |
10% |
10% |
|
PAKISTAN |
10% a) 15% b) |
10% |
10% |
|
POLAND |
10% a) 15% b) |
10% |
10% |
|
ROMANIA |
10% a) 15% b) |
10% |
10% |
|
RUSSIA |
10% a) 15% b) |
10% |
10% |
|
SINGAPORE |
10% |
10% |
10% |
|
SLOVAKIA |
10% a) 15% b) |
10% |
10% |
|
SLOVENIA |
5% a) 15% b) |
10% |
5% |
|
SOUTH AFRICA |
10% a) 15% b) |
10% |
10% |
|
SOUTH KOREA |
10% a) 15% b) |
15% |
10% |
|
SPAIN |
10% a) 15% b) |
15% |
5% |
|
SWEDEN |
10% |
10% |
10% |
|
SWITZERLAND |
10% a) 15% b) |
10% |
5% |
|
TUNISIA |
15% |
15% |
10% |
|
TURKEY |
5% a) 15% b) |
10% l) 15% m) |
10% |
|
UKRAINE |
10% a) 15% b) |
10% |
10% |
|
UNITED KINGDOM |
10% a) 15% b) |
10% |
5% |
|
UNITED STATES OF AMERICA |
5% a) 15% b) |
10% |
10% |
|
VENEZUELA |
10% b) 15% i) |
10% |
10% n) 12% b) |
NOTES:
a) Two year 25% shareholding
b) All other cases
c) 50% or more shareholding
d) Listed bonds
e) Banks and insurance companies
f) Royalties relating to industrial, commercial or scientific equipment
g) Loans issued after 01.01.65
h) When paid by banks
i) Dividends paid after 31.12.96
j) Company receiving dividends holds 25% or more of the share capital of the paying company but is taxed at a lower rate than the standard Israeli tax rate
k) When paid to a financial institution
l) On loans for periods greater than two years
m)On loans for periods less than two years
n) For technical assistance only
Madeira withholding taxes can be reduced through use of an appropriate Double Taxation Agreement, or eliminated altogether through application of the EU interest and Royalties Directive. Where the ultimate holding company is outside the EU, use of a Malta company, in addition to the Madeira company, can eliminate withholding taxes. Dixcart has offices in both Madeira and Malta and can therefore provide a complete service from one organisation.
Additional Information
If you would like additional information on double taxation treaties please speak to Robert Homem at the Dixcart office in Madeira or contact us.