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Portugal

22 March 2016

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Portugal Adopts 2016 Budget including CbC Reporting Requirements

Portugal's parliament reportedly adopted the 2016 Budget on 16 March 2016. One of the main tax related measure is the introduction of Country-by-Country (CbC) reporting requirements in line with the guidelines developed as part of Action 13 of the OECD BEPS Project. Although the final legislation is not yet available, the final requirements are not expected differ from the draft version, which include:

  • The CbC reporting requirement will apply from the 2016 fiscal year;
  • The content of the report will follow the OECD guidelines;
  • The reporting threshold will be consolidated group revenue in the previous fiscal year of EUR 750 million;
  • The reporting deadline will be 12 months after the fiscal year concerned;
  • Entities required to file a report in Portugal will include:
    • Ultimate parent entities of MNE groups resident in Portugal;
    • Group entities resident in Portugal if the ultimate parent is not required to file in its jurisdiction of residence, or Portugal does not have automatic exchange of CbC reports with that jurisdiction or the Portuguese tax authority has notified a group entity that there is failure to exchange with that jurisdiction; and
    • Group entities resident in Portugal that have not demonstrated that another group entity has been designated to file a CbC report - either an entity resident in Portugal or resident in a jurisdiction with which CbC reports are automatically exchanged;
  • The identity and tax residence of the reporting entity must be provided to the Portuguese tax authority by the end of the fiscal year concerned;
  • A penalty of up to EUR 20,000 will apply for failure to file when required.

The 2016 Budget legislation must now be signed by the president before entering into force. Additional details on the CbC reporting requirements and other measures will be published once available.

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