24 October 2019
The Swedish government has approved and submitted to parliament the draft bill for the ratification of the pending protocol to the 2002 income tax treaty with Portugal. The protocol, signed 16 May 2019 (previous coverage), provides for the implementation of the minimum BEPS standards for tax treaties and other amendments, including in relation to the taxation of pension payments to provide that pensions earned in Sweden will be taxable in Sweden if not taxed in Portugal. The taxation of pensions has been a contentious issue that could reportedly lead to the termination of the treaty by Sweden if Portugal does not move forward on ratification of the protocol.
Once ratified by both countries, the protocol will enter into force 30 days after the ratification instruments are exchanged and will generally apply from 1 January of the year following its entry into force.
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