Under the Decree-Act 7/2015 new tax regime, Non-resident Investors without a local permanent establishment (provided they do not have their residence in a ‘tax haven’ and no more than 25% of its share capital is held by Portuguese-residents) will remain exempt from Portuguese taxation in respect of income derived from Securities Investment Funds. This makes
Portuguese Funds will become more competitive and attractive to foreign investors.
Real Estate Funds
Income derived from Real Estate Funds, they will become taxed in Portugal at a 10% rate. Income obtained by Portuguese-resident Investors will always be taxed, whether the Investors are individuals or collective undertakings
Corporate Income Tax (CIT)
exempting these instruments from Corporate Income Tax (CIT), provided that these are established and operated by national legislation, as stipulated in Article 23 of the Tax Benefits Code.
Personal Income Tax (PIT)
Personal Income Tax (PIT), income derived from Participation Units (PU’s) held in venture capital / private equity funds, paid or made available to their unit holders, enjoy a reduced withholding tax of 10% or 0%, depending on whether the holders of these PU’s are tax residents or non-tax residents in Portugal, respectively. These tax rates are applicable to both individual investors or companies. The exception to this rule lies on the scenario of investors (individuals or companies) residing in countries, territories and regions that provide a more favorable tax regime (blacklisted jurisdictions).
Main Benefits
The tax benefits resulting from investments in venture capital / private equity funds allow for:
- Exemption or Reduction of the tax burden on the income received from the investments made, encouraging, and attracting investors to invest;
- Favorable tax treatment for funds, positively determining the investor’s returns;
- Tax Credits for Investments in Startups, as these can represent a percentage of the total investment and help offset the risk associated with investments in early-stage companies;
- Companies investing in Funds may heavily reduce their tax burden if invested in eligible venture capital funds.
Stamp duty
Portuguese Funds will become subject to Stamp Duty, which will be levied over the global net value of the Funds, at a 0.0025% rate, for Funds which, exclusively, invest in money market instruments and deposits, and at a 0.0125%, for other types of Funds.
