the the portugueseportuguese«non habitual«non ... · 2 summary: individuals 1 –why portugal ? 2...

LISBOA PORTO FUNCHAL SÃO PAULO LUANDA MAPUTO PRAIA MACAU DILI SÃO TOMÉ PEQUIM SHANGAI

The The The The PortuguesePortuguesePortuguesePortuguese «non «non «non «non habitualhabitualhabitualhabitual» » » » TaxTaxTaxTax residentresidentresidentresident regimeregimeregimeregime

Helsinki, April 2015, 18 th and 19 th

www.rffadvogados.pt2

Summary:

Individuals

1 – Why

Portugal ?

2 – The regime

of «non-

habitual

residents»

3 - Golden Visa

4 -Inheritance

and donations

Companies

5 – New

Corporate

Income Tax

regime

6 – Network of

Conventions

to avoid

double

taxation


• TheTheTheThe LandscapeLandscapeLandscapeLandscape::::

� 300 days of sunshine per year

� Beaches and seasides

� Historic heritage

1- Why Portugal ?


• A A A A WWWWelcomingelcomingelcomingelcoming EEEEnvironmentnvironmentnvironmentnvironment::::

� Ranking 2nd among most welcoming countries (Mipex III)

� Safe Country - ranking 17th according to the Global peace index

� Good Accessibility – provide easy access by air, road or rail

1- Why Portugal ?


• WellWellWellWell----beingbeingbeingbeing andandandand QQQQualityualityualityuality ofofofof LifeLifeLifeLife

� Mediterranean gastronomy

� Low cost of living - minimum salary: €515

� Quality health care system – ranking 12 th accordingto WHO

1- Why Portugal ?


• A A A A CCCConvenientonvenientonvenientonvenient EEEEconomyconomyconomyconomy

� Located in the Euro zone

� Facility and security of trades

� The favourable tax regimes

1- Why Portugal ?


• WhatWhatWhatWhat are the are the are the are the qualifyingqualifyingqualifyingqualifying requirementsrequirementsrequirementsrequirements ????

� Be tax resident in Portugal :� + than 183 days, or� Have her/his habitual abode, andandandand

� Not have been taxed as a Portuguese resident in any of the previous five years

• Is Is Is Is itititit sufficientsufficientsufficientsufficient to to to to meetmeetmeetmeet the the the the requirementsrequirementsrequirementsrequirements????

� The law requires a constitutive formal act for obtaining the status : Registration as «non-habitual tax resident» before the competent authorities.

2 – The Non-Habitual Tax Resident Regime


StepsStepsStepsSteps LocationsLocationsLocationsLocations DeadlinesDeadlinesDeadlinesDeadlines DocumentsDocumentsDocumentsDocuments ResponsesResponsesResponsesResponses

1.º:1.º:1.º:1.º: ObtainingObtainingObtainingObtaining the NIF the NIF the NIF the NIF and registration as a and registration as a and registration as a and registration as a

taxtaxtaxtax residentresidentresidentresident in in in in PortugalPortugalPortugalPortugal

TaxTaxTaxTaxOffice Office Office Office

((((ServiçoServiçoServiçoServiço de de de de FinançasFinançasFinançasFinanças))))

UntilUntilUntilUntil the 31th of the 31th of the 31th of the 31th of DecemberDecemberDecemberDecember of of of of

the the the the yearyearyearyear in in in in whichwhichwhichwhich the the the the

individualsindividualsindividualsindividualsbecomebecomebecomebecome taxtaxtaxtax

residentresidentresidentresident

Copy of a Copy of a Copy of a Copy of a rentalrentalrentalrentalor or or or purchasepurchasepurchasepurchase

contractcontractcontractcontract of a of a of a of a propertypropertypropertyproperty

InstantInstantInstantInstant

2.º: Application for 2.º: Application for 2.º: Application for 2.º: Application for registration as nonregistration as nonregistration as nonregistration as non----habitualhabitualhabitualhabitual taxtaxtaxtax residentresidentresidentresident

DirecçãoDirecçãoDirecçãoDirecção de de de de ServiçosServiçosServiçosServiços de de de de RegistoRegistoRegistoRegisto de de de de

ContribuintesContribuintesContribuintesContribuintes

UntilUntilUntilUntil the 31th of the 31th of the 31th of the 31th of March of the March of the March of the March of the

followingfollowingfollowingfollowing yearyearyearyear

All documents All documents All documents All documents certifyingcertifyingcertifyingcertifying the the the the

change of change of change of change of residenceresidenceresidenceresidence

((((additionaladditionaladditionaladditionalelementselementselementselements maymaymaymaybebebebe requiredrequiredrequiredrequired))))

ApproximatelyApproximatelyApproximatelyApproximately4 to 6 4 to 6 4 to 6 4 to 6 monthsmonthsmonthsmonths

� WhatWhatWhatWhat isisisis the the the the procedureprocedureprocedureprocedure????

2 - The Non-Habitual Tax Resident Regime


� The applicable The applicable The applicable The applicable taxtaxtaxtax regimeregimeregimeregime

Source of Source of Source of Source of incomeincomeincomeincome

TypeTypeTypeType of of of of incomeincomeincomeincome RegimeRegimeRegimeRegimeapplicableapplicableapplicableapplicable

Applicable Rate (2015)Applicable Rate (2015)Applicable Rate (2015)Applicable Rate (2015)

PortugalPortugalPortugalPortugal

EmploymentEmploymentEmploymentEmployment incomeincomeincomeincomeSubjectSubjectSubjectSubject to to to to IRSIRSIRSIRS

20% («high20% («high20% («high20% («high addedaddedaddedadded value» value» value» value» activitiesactivitiesactivitiesactivities)*+3,5 %)*+3,5 %)*+3,5 %)*+3,5 %

Entrepreneurial and Entrepreneurial and Entrepreneurial and Entrepreneurial and professionalprofessionalprofessionalprofessional incomeincomeincomeincome SubjectSubjectSubjectSubject to to to to IRSIRSIRSIRS 20% («high20% («high20% («high20% («high addedaddedaddedadded value» value» value» value» activitiesactivitiesactivitiesactivities)*+3,5 %)*+3,5 %)*+3,5 %)*+3,5 %

CapitalCapitalCapitalCapital incomeincomeincomeincome ((((interestsinterestsinterestsinterests, , , , dividendsdividendsdividendsdividends)))) SubjectSubjectSubjectSubject to to to to IRSIRSIRSIRS 28%*28%*28%*28%*

MovableMovableMovableMovable capital gainscapital gainscapital gainscapital gains SubjectSubjectSubjectSubject to to to to IRSIRSIRSIRS 28%*28%*28%*28%*

ImmovableImmovableImmovableImmovable capital capital capital capital gainsgainsgainsgainsSujectSujectSujectSuject to IRSto IRSto IRSto IRS

Up to a maximum effective rate Up to a maximum effective rate Up to a maximum effective rate Up to a maximum effective rate of 56,5% (48% +3,5 %+ of 56,5% (48% +3,5 %+ of 56,5% (48% +3,5 %+ of 56,5% (48% +3,5 %+ fromfromfromfrom

2,5% to 5%)2,5% to 5%)2,5% to 5%)2,5% to 5%)

RentalRentalRentalRental incomeincomeincomeincome SubjectSubjectSubjectSubject to to to to IRSIRSIRSIRS 28%*28%*28%*28%*

PensionsPensionsPensionsPensionsSubjectSubjectSubjectSubject to to to to IRSIRSIRSIRS

Up to a maximum effective rate Up to a maximum effective rate Up to a maximum effective rate Up to a maximum effective rate of 56,5% (48% +3,5 %+ of 56,5% (48% +3,5 %+ of 56,5% (48% +3,5 %+ of 56,5% (48% +3,5 %+ fromfromfromfrom

2,5% to 5%)2,5% to 5%)2,5% to 5%)2,5% to 5%)

* With the option for income aggregation



� The applicable tax regime

Source of Source of Source of Source of incomeincomeincomeincome

TypeTypeTypeType of of of of incomeincomeincomeincome TaxTaxTaxTax regimeregimeregimeregime

AbroadAbroadAbroadAbroad

EmploymentEmploymentEmploymentEmployment incomeincomeincomeincomeExemptedExemptedExemptedExempted****

Entrepreneurial ans Entrepreneurial ans Entrepreneurial ans Entrepreneurial ans professionalprofessionalprofessionalprofessional incomeincomeincomeincome(«High(«High(«High(«High addedaddedaddedadded value» value» value» value» activitiesactivitiesactivitiesactivities))))

ExemptedExemptedExemptedExempted****CapitalCapitalCapitalCapital incomeincomeincomeincome ((((interestsinterestsinterestsinterests, , , , dividendsdividendsdividendsdividends))))

ImmovableImmovableImmovableImmovable ccccapital gainsapital gainsapital gainsapital gains

RentalRentalRentalRental incomeincomeincomeincome

PensionsPensionsPensionsPensionsExemptedExemptedExemptedExempted ((((exceptexceptexceptexcept public pensionspublic pensionspublic pensionspublic pensions)))) ****


*Please note that the exemption is not automatic and it depends on certain conditions thant should be met in the particular case. Previous legal advice should be obtained.


• Complete the IRS tax return

(Annex L)AncillaryAncillaryAncillaryAncillary ObligationsObligationsObligationsObligations

• 10 years(renewable?)BenefitBenefitBenefitBenefit extensionextensionextensionextension



Resident permit for third country citizens to invest in Portugal

Condition of the investment in Portuguese territory :

KeptKeptKeptKept for 5 for 5 for 5 for 5 yearsyearsyearsyears ((((fromfromfromfrom the obtention the obtention the obtention the obtention of the of the of the of the residenceresidenceresidenceresidence permit) + permit) + permit) + permit) + RemainRemainRemainRemain in in in in

Portugal 7 Portugal 7 Portugal 7 Portugal 7 daysdaysdaysdays per per per per yearyearyearyear

3 – Golden Visa


3 – Golden Visa

Investment activity performed directly by an individual

or through a company for a minimum period of 5 years:

Capital transfer in

an amount equal

or above

€ 1 Million

Creation of 10

jobs

Purchase of real

estate in an

amount equal or

above

€ 500.000


3 – Golden Visa

LEGISLATIVE AMENDMENTS PROPOSED -

BROADENING

Investment activity performed directly by an individual

or through a company for a minimum period of 5 years:

Investments

regarding

scientific

investigation or

supporting

artistic

production

min. € 350.000

Investments in

recovering or

maintening

national cultural

patromony

min. € 350.000

Investments in

urban

rehabilitation

work

min. € 500.000


3 – Golden Visa

Advantages

Access to free

circulation

within the

Schengen Area

Be tax resident

and work in

Portugal

Family

reunification

Access to

Portuguese

nationality

Access to

Residency

Authorization

for Investment


Direct descendant or Direct descendant or Direct descendant or Direct descendant or

ascendant ascendant ascendant ascendant spousespousespousespouse

OtherOtherOtherOther

4– Inheritance and donations

0%

10%


5– The Corporate Income Tax Reform

IRC IRC IRC IRC –––– The new The new The new The new regimeregimeregimeregime of «Participationof «Participationof «Participationof «Participation----exemption»exemption»exemption»exemption»

• OneOneOneOne ofofofof thethethethe mostmostmostmost attractiveattractiveattractiveattractive regimeregimeregimeregime inininin EuropeEuropeEuropeEurope

• CumulativeCumulativeCumulativeCumulative criteriacriteriacriteriacriteria::::

� DetentionDetentionDetentionDetention ofofofof 5555%%%% ofofofof thethethethe shareshareshareshare capitalcapitalcapitalcapital orororor votingvotingvotingvoting rightsrightsrightsrights

� AAAA minimumminimumminimumminimum 24242424 monthsmonthsmonthsmonths uninterrupteduninterrupteduninterrupteduninterrupted detentiondetentiondetentiondetention periodperiodperiodperiod

Exemption : Exemption : Exemption : Exemption : dividendsdividendsdividendsdividends + capital gains+ capital gains+ capital gains+ capital gains




• LimitationsLimitationsLimitationsLimitations::::

•TheTheTheThe entitiesentitiesentitiesentities thatthatthatthat distributedistributedistributedistribute thethethethe dividensdividensdividensdividens orororor whichwhichwhichwhich sharesharesharesharecapitalcapitalcapitalcapital isisisis onerouslyonerouslyonerouslyonerously transmittedtransmittedtransmittedtransmitted::::

�RealRealRealReal estateestateestateestate ownedownedownedowned bybybyby thosethosethosethose entitiesentitiesentitiesentities shouldshouldshouldshould notnotnotnotrepresentrepresentrepresentrepresent moremoremoremore thanthanthanthan 50505050 %%%% ofofofof thethethethe respectiverespectiverespectiverespective assetsassetsassetsassets

�ShouldShouldShouldShould bebebebe subjectsubjectsubjectsubject atatatat aaaa legallegallegallegal raterateraterate notnotnotnot lowerlowerlowerlower thanthanthanthan 60606060%%%%ofofofof thethethethe applicableapplicableapplicableapplicable IRCIRCIRCIRC raterateraterate (i(i(i(i....eeee.... 12121212,,,,6666 inininin 2015201520152015))))

�ShouldShouldShouldShould notnotnotnot havehavehavehave itsitsitsits residenceresidenceresidenceresidence orororor domiciledomiciledomiciledomicile inininin aaaaPortuguesePortuguesePortuguesePortuguese ““““blackblackblackblack----listedlistedlistedlisted”””” country,country,country,country, territoryterritoryterritoryterritory orororor regionregionregionregion




In Portugal:• Exemption of distributed dividends• Exemption of capital gains deriving

from the onerous transmission of shareholding

Portugal Portugal Portugal Portugal Co.Co.Co.Co.

Europa Co. / Europa Co. / Europa Co. / Europa Co. / Africa Co.Africa Co.Africa Co.Africa Co.

Dividends 5% + 2 years



IRC IRC IRC IRC ---- RateRateRateRate

• 23% 23% 23% 23% ---- 2014201420142014

• 21% 21% 21% 21% ---- 2015201520152015

• 17% 17% 17% 17% untiluntiluntiluntil 2019201920192019


6– The network of Conventions to avoid double taxation

71 Conventions 71 Conventions 71 Conventions 71 Conventions concludedconcludedconcludedconcluded (7 not (7 not (7 not (7 not yetyetyetyet intointointointo force)force)force)force)

8 Africa11

America

18 Asia34

Europe

Thank you !

Rogério M. Fernandes Ferreira Founding Partner ([email protected])

Mónica Respício GonçalvesSenior Associate ([email protected])

LISBOA PORTO FUNCHAL SÃO PAULO LUANDA MAPUTO PRAIA MACAU DILI SÃO TOMÉ PEQUIM SHANGAI

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((((réceptionréceptionréceptionréception) / 6º) / 6º) / 6º) / 6º

1250125012501250----163 163 163 163 LisbonneLisbonneLisbonneLisbonne

Email: [email protected]: [email protected]: [email protected]: [email protected]

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