Law 114/2017 of 29 December 2017 enacted the Portuguese Budget Law for 2018. Garrigues, Taxand Portugal, looks into the most relevant tax measures included in the Budget Law, which include:
The increase of the Corporate Income Tax (CIT) State Surtax was a tax measure floated in the weeks prior to the release of the Budget Bill but was not included in the first version presented in Parliament. During Parliament discussions, it was agreed to change the highest bracket of the State Surtax for CIT purposes applicable to taxable income in excess of € 35 million from 7% to 9%. The table below provides an overview of the CIT rates in Portugal for FY18
The adoption of a domestic rule deeming as Portuguese source the indirect transfer of immovable property located in Portugal – namely via the transfer of shares of foreign companies, if, at any time during the 365 days preceding the alienation, more than 50 percent of the value of the shares is derived, directly or indirectly through one or more interposed entities, from immovable property located in Portugal. This rule does not apply to properties assigned to agricultural, industrial or commercial activities not related to property trading. The same rule is adopted in Personal Income Tax (PIT)
