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Portugal

31 March 2014

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Changes to Portugal's Transfer Pricing Rules

Portugal's 2014 Budget included several changed to transfer pricing rules. The following provides a summary.

Expanded Access to Unilateral APAs

Under the previous rules, advanced pricing agreements (APA) were only available in cases where there was no tax treaty between Portugal and the home jurisdiction of the counterparty. under the new revised rules, unilateral APAs are possible regardless of whether or not a tax treaty is in place.

Ownership Requirement Increased

The ownership percentage of one company by another has been increased from 10% to 20% when determining if the transfer pricing rules apply.

Scope of Coverage Expanded

The scope of transactions that are covered by the transfer pricing rules is expanded to include transactions between related resident entities in Portugal and all foreign permanent establishments.

Extended Book and Record Keeping Requirements

The period to maintain books, records, and supporting documentation for transfer pricing is extended from 10 years to 12 years.

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