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Portugal: Domestic Taxation

Withholding Taxes on Outgoing Dividends

  • Dividends paid by Madeira holding companies to non-residents and which do not relate to income earned inside Portugal are exempt from any withholding taxes irrespective of the existence of any double taxation treaties and irrespective of the applicability of the EU Parent-Subsidiary directive. Most holding company regimes (with the exception of Denmark) only reduce or exempt withholding taxes on outgoing dividends in one of 2 circumstances:
    • Where there is a double taxation treaty in place between the holding company jurisdiction and the ultimate parent company jurisdiction withholding taxes are normally reduced from the usual standard rate to a rate varying between 0-15%;
    • Where both the holding company and the parent corporation are resident in the EU and where the relevant criteria are met no withholding taxes are imposed on outgoing remittances.

 

 

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