Tax minimization in Portugal encompasses a series of legal practices that help individuals and companies reduce the total amount of due taxes at the end of the financial year. These methods may be part of a larger wealth management strategy or may be applied individually.
The experts at our law firm in Portugal are ready to help you with advice on the most common tax minimization practices and how you can apply one or more of these to your business in the country.
Tax minimization practices in Portugal
Tax minimization strategies in Portugal include a number of practices, from making charitable donations to repatriating profit and managing estate planning. Employers in Portugal may benefit from tax deductions for certain types of purchases or for handing out bonuses and gifts to their employees in Portugal.
Foundations in Portugal are a type of legal entity that may benefit from certain tax advantages. Our attorneys in Portugal can give you complete information on the taxation requirements for each type of legal entity.
When companies are converted from limited liability companies into joint-stock companies they may use a tax exemption for capital gains from the sale of shares held down for more than one year. One of our lawyers in Portugal can give you complete information on how, when or if you can use this provision for your company.
For foreign residents living in Portugal, also referred to as non-habitual residents, most income derived from foreign sources is tax exempt. Non-habitual residents can benefit from a flat personal income tax rate if they work in specific business fields, mainly those that involve artistic, technical or scientific professions. Expats living in Portugal are advised to seek clear and comprehensive information before moving to the country so as to avoid any penalties that may derive from incomplete or incorrect tax reporting in Portugal.
General taxes in Portugal
While investors and individuals can use a few methods for tax minimization, the general taxes applicable in Portugal are as follows:
- taxes on companies: the corporate income tax, withholding taxes, property tax, social security tax, value added tax, stamp duty, transfer tax, etc.
- the personal income tax.
Foreign businesses benefit from protection against double taxation, due to the double tax avoidance agreements signed by Portugal and other countries worldwide.
Contact our law firm in Portugal for complete information about the tax laws in Portugal.