Portuguese law confers on some partnerships legal personality, i.e., the distinct status of a company (sociedade), which sets its existence apart from the status of its individual or corporate partners.
Under Portuguese law, a partnership may be organized under three different legal typologies, namely:
- the general partnership (sociedade en nome colectivo);
- the limited partnership (sociedade em comandita simples); and
- the partnership limited by shares (sociedade em comandita por acções).
For Portuguese corporate income tax (CIT) purposes, partnerships are subject to the same treatment as companies, although a fiscal transparency regime (transparência fiscal) is applicable to certain resident entities, such as civil law companies not incorporated under a commercial form, incorporated firms of professionals and holding companies whose equity capital is controlled, directly or indirectly, for more than 183 days by a family group or a limited number of members, under certain conditions.
The Portuguese transparency regime is essentially characterized by attributing to shareholders or members of a transparent entity its taxable amount, even in case of undistributed profits. Thus, as a rule, the transparent entity is not liable to CIT, and the amounts attributed to the taxable income of its shareholders or members being therefore embodied for CIT or PIT purposes, as the case may be. In relation to PIT, such amounts are taken into account as net incomes in category B – business and professional income.