2 December 2021
Portugal has published Ordinance No. 268/2021 of 26 November 2021, which revises the regulation of transfer pricing in transactions carried out between taxable persons and any other entity under Article 63 of the Corporate Income Tax (IRC) Code, replacing Ordinance No. 1446-C/2001 of 21 December 2001. Ordinance No. 268/2021 takes into account international developments in the area of transfer pricing in recent years, including the 2017 OECD Transfer Pricing Guidelines and other OECD guidance issued as a result of the BEPS project, including guidance on the application of the profit-split method, the approach to hard-to-value intangibles, financial transactions, and permanent establishments. The ordinance covers:
With respect to transfer pricing documentation, several important changes are made as compared to the prior ordinance, including:
Ordinance No. 268/2021 entered into force on 27 November 2021, except for Chapter IV on documentation requirements, which is effective for tax periods beginning on or after 1 January 2021. Ordinance No. 1446-C/2001 is revoked with the entry into force of Ordinance No. 268/2021, although it is provided that Chapter IV on documentation requirements of the older ordinance continues to apply until the tax period beginning or after 1 January 2020 (i.e., beginning before 1 January 2021).
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