Individuals residing in Portugal are subject to 28% withholding income tax on savings returns (22.4% for the Autonomous Region of the Azores), and may opt for aggregation. Tax aggregation is mandatory for business and professional investment returns.
Legal persons subject to corporate income tax residing or incorporated in Portugal are subject to 25% corporate income tax withheld at source on savings returns (20% for the Autonomous Region of the Azores). Tax is withheld at source as an advance payment on the final taxes due.
A 35% withholding tax shall apply when returns are paid into or made available in accounts opened under the name of one or more holders but on behalf of unidentified third-parties, unless the actual beneficiary is identified, in which case the general rules above shall apply.
Non-residents without a permanent establishment in Portugal to which returns from deposits are attributable
Returns on deposits earned by non-residents without a permanent establishment in Portugal to which these returns are attributable are subject to income tax withheld at source, 28% for individuals or 25% for legal persons.
A 35% withholding tax shall apply definitively when said returns are paid into or made available in accounts opened under the name of one or more holders but on behalf of unidentified third-parties, unless the actual beneficiary is identified, in which case the general rules above shall apply.
The same 35% withholding tax applies when these returns are paid or made available to individuals or companies without residence or with no permanent establishment in Portugal to which these returns are attributable and that are domiciled in a country, territory or region clearly subject to a more favourable taxation scheme, as per Ordinance 150/2004, of 13 February.
In compliance with the double taxation conventions adopted by Portugal, withholding tax may be limited to 15, 12 or 10%, depending on which convention applies and provided all legal procedures are observed. Withheld tax may be limited by a partial withholding tax exemption or by refund of the excess amount collected.
Deposit Guarantee Fund
Deposits opened at Banco Comercial Português, SA are covered by a refund guarantee from the Deposit Guarantee Fund, which is activated whenever funds are unavailable strictly due to financial reasons.
The Deposit Guarantee Fund ensures the refund of up to 100,000.00 Euros per depositor, regardless of whether the depositor resides in Portugal or abroad or whether the deposits are in Portuguese or foreign currency.
The value owed to each depositor is calculated by considering the total value of his/her deposit accounts, including interest, at the date the bank was unable to make the payment. Balances in foreign currency shall be converted into Euros, at the exchange rate in effect at that date (reference exchange rates published by the Bank of Portugal).
The depositor shall be refunded within a maximum of 7 days for a 10,000 Euros tranche; the remaining amount (up to 100,000 Euros) shall be paid out within a maximum of 20 working days, as of the date the deposits were unavailable. The Fund may, under extremely exceptional circumstances and regarding individual cases, request the Bank of Portugal to extend the term, for a maximum period of 10 working days.
For further information, please go to www.clientebancario.bportugal.pt/ and to www.fgd.pt.