News Share

The Tax Hub

Daily Tax Newsletter

Panama; Portugal

9 January 2011

Responsive image

Treaty between Panama and Portugal – details

Details of the income tax treaty and protocol between Panama and Portugal, signed on 27 August 2010, have become available. The treaty was concluded in the Spanish, Portuguese and English languages, each text having equal authenticity. In the case of divergence, however, the English text prevails. The treaty generally follows the OECD Model Convention.

The maximum rates of withholding tax are:

-   15% on dividends in general; reduced to 10% if the beneficial owner is a company holding directly at least 10% of the capital of the company paying the dividends;
-   10% on interest; and
-   10% on royalties.
-   income derived from professional services, consultancy, business-industrial advice, technical or management services or similar services may be subject to tax in the state where the services are performed up to 10% of the gross amount;
-   capital gains from the alienation of shares or similar participations may be subject to tax in the state of residence of the company provided that those shares or participations represent 25% or more of the capital of that company, but the tax so charged "may not exceed 5% of the value of the alienation of the 10 % of the net gains";
-   the term "permanent establishment" (PE) (Art. 5(3)) includes:
-   a building site, a construction, assembly or installation project, or supervisory activities in connection therewith, but only when such site, project or activities continue for more than 9 months;
-   the rendering of services in a State, including consultancy, by an enterprise through employees or other personnel engaged by the enterprise, but only when these employees or personnel are present in that State for the performance of the same or connected project, during a period or periods aggregating more than 9 months in any 12-month period; and
-   the use of a structure, installations, drilling rig, ship or other like substantial equipment for the exploration for, or exploitation of, natural resources; or for activities connected with that exploration or exploitation for a period or periods exceeding 9 months in any 12-month period; and
-   the definition of royalties includes software, films or tapes and other means of image or sound reproduction, drawings and the use of, or the right to use industrial, commercial or scientific equipment (Art. 12(3)).

Panama applies the exemption method for the avoidance of double taxation (Art. 22(1)). Portugal applies the credit method for the avoidance of double taxation (Art. 22(2)).

Neither treaty party may terminate this treaty during a period of 5 years starting from the date of its entry into force (Art. 29).

Powerful Tax Tools


FX Rates

Global FX Rates including Tax Year Average FX Rates and Spot Rates for all Reporting Currencies.


Corporate Tax Rates

Corporate tax rates, surtaxes, and effective tax rates for the current year, as well as historical rates and approved future rates.


Country Analysis

Detailed tax guidance for companies doing business in over 100 countries, including summaries and snapshots of key tax facts and issues.


Cross Border Tax Calculator

Calculate total tax costs and benefits of a cross border transaction including withholding tax, participation exemption and foreign tax credit rules.


Cross Border Tax Rates

Provides Domestic, treaty and EU cross border tax rates for over 5,000 country combinations for 9 different payment streams.



Complete overview of the OECD BEPS Project, including daily BEPS news, country adoption of BEPS measures, and an overview of the 15 BEPS Actions.


Tax Calendar

Customizable calendar tool that tracks corporate income tax, value added tax and transfer pricing obligations by country or entity.


Tax Forms

English translations of key tax forms for over 80 countries, including tax return forms, treaty benefit forms, withholding tax forms, and more.


Worldwide Tax Treaties

Repository including thousands of tax treaties (in English), OECD, UN and US Models, relevant EU Directives, Technical Explanations, and more.


Worldwide Tax Planner

Calculates the worldwide tax cost of what-if scenarios based on legal entity structure, taxable income, and cross border transactions.


Certified Rates Report

Customizable Certified Rates Report providing updated corporate and withholding tax rates at the end of each month for over 100 countries.


Withholding Tax Minimizer

Enables quick calculation of tax costs and benefits of cross border transactions considering all possible transaction combinations and optimal routes.


VAT Rates

Provides value added tax (VAT) rates, goods and services tax (GST) rates and other indirect tax rates for over 100 countries.


NOL Calculator

Country specific calculator to determine how net operating losses can be utilized in carryback and carryforward years.


Transfer Pricing Calculator

Calculates TP ratios under various TP methods and calculates the difference between target ratios and actual ratios.


Individual Income Tax Rates

Individual tax rates for over 100 countries.

Play of the Day

Translate Documents

English translations of key tax forms for over 80 countries, including tax return forms, treaty benefit forms, withholding tax forms, and more.

We’re here to help

We’re here to answer any questions you have about the Orbitax products and services.

Send us a message

Who’s behind Orbitax?

We’re committed to providing high value, low cost tax research and management solutions.

Learn More