Portugal: Withholding tax, interest paid | KPMG | GLOBAL

Portugal: Withholding tax, interest paid to non-resident financial institutions

Portugal: Withholding tax, interest paid

The Advocate General of the Court of Justice of the European Union (CJEU) on 17 March 2016 rendered her opinion in a case concerning whether the Portuguese withholding tax on interest paid to non-resident financial institutions is contrary to EU law because it is imposed on the gross amount of the interest paid, whereas resident financial institutions are taxed on their net income.


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The Advocate General concluded that the Portuguese treatment constitutes a restriction of the freedom to provide services, and that financing costs could, in principle, be deducted even when these could not be traced to specific loans.


Read a March 2016 report [PDF 278 KB] prepared by KPMG’s EU Tax Centre

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