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Portugal — Orbitax Country Chapters
13.4.3. Documentation Requirements

Disclosure Requirements

Taxpayers are required to make, in the annual submission of accounts and tax information to the tax authorities, a declaration of the existence or non-existence, in such financial year, of operations with entities with which there is a special relation, including:

  • Identification of the entities with which a special relation exists;
  • Identification and declaration of the value of the operations made with each one of the entities with which such relation exists;
  • The transfer pricing methods used and changes to the adopted methods (effective 1 October 2019);
  • The value of transfer pricing adjustments to comply with the arm's length principle in determining taxable profit (effective 1 October 2019);
  • A declaration that transfer pricing documentation is prepared at the time the transactions took place and is maintained; and
  • Effective 1 January 2021, additional documents including official publications, reports, studies and databases, market study reports, price lists, contracts, technical studies, and other documentation produced by the taxable person or by third parties.

Standard Documentation

The documentation requirements have been updated via Ordinance No. 268/2021 of 26 November 2021, which is effective for tax periods beginning on or after 1 January 2021. As per the revised Ordinance, taxpayers with an annual turnover exceeding EUR 10 million (increased from EUR 3 million effective from 1 January 2021) are required to comply with the transfer pricing documentation requirements. Even if the annual income threshold of EUR 10 million is exceeded, an exemption from the documentation requirement is applied in respect of operations whose value in the period has not exceeded EUR 100,000 per counterparty or EUR 500,000 in total, considering the respective market value.

However, the exemption does not apply for transactions carried out between a resident entity and a non-resident entity which is subject to a favorable tax regime, which includes jurisdictions meeting certain criteria such as low or no taxation (see Sec 13.5.). Further, the above exemptions do not preclude the requirement to substantiate that operations are at arm's length when requested.

The 2021 Ordinance establishes two distinct documentation models, i.e., a simplified documentation model, and a standard model comprising of a Master file and a Local file. The standard model is applied to taxpayers categorized as ‘Large taxpayers’. The simplified documentation model is applied to taxpayers that qualify as small or medium-sized enterprises and are not exempt from the transfer pricing requirements.


Taxpayers with ‘Large Taxpayers’ status are required to submit transfer pricing documentation along with the supporting report under the standard documentation model by the 15th day of the 7th month following the close of the tax year. Large Taxpayers are defined as entities, holding companies, group companies covered under special tax regimes, natural persons, etc. having turnover in excess of the amounts that may be prescribed by the appropriate authority.

The taxpayer must maintain in good order the documentation regarding the policy adopted for transfer pricing, including the instructions relating to its application, the contracts or other legal acts with entities with which there is a special legal relation. The documentation requirements are only considered fulfilled when the documentation presented contains all the relevant elements regarding the related party transactions carried out by the taxpayer.

The standard documentation model is mainly based on the OECD guidelines, which includes the following:

  • Local file referring specifically to material and controlled transactions of the local taxpayer; and
  • Master file containing standardized information relevant for all the members of a Multinational Enterprise (‘MNE’) Group.

The documentation must contain data to support market parity of the terms and conditions agreed, accepted and observed in transactions carried out with associated enterprises, and selection and application of the method or methods for the determination of transfer prices that provide the closest match with the terms and conditions observed by independent entities, ensuring the highest possible degree of comparability of transactions or series of transactions carried out with independent entities under normal market conditions.

  • To comply with the documentation holding requirements, the taxpayer must obtain or produce and retain data regarding, namely: A description of any special relations that exist, a history of the corporate relation from which the special relation originated;
  • A description of activities exercised by the taxpayer and by those associated enterprises with which it carries out transactions and, relative to each of these, a detailed list, broken down by type of transaction and amounts recorded by the taxpayer over the past 3 years and in certain cases the financial statements of the associated enterprises;
  • A detailed description of the goods, rights or services involved in controlled transactions and of the terms and conditions agreed when such information is not revealed in the respective contracts;
  • A description of the functions performed, the assets employed and the risks assumed by the taxpayer and by the related parties involved in the controlled transactions;
  • Expert studies of essential areas of the business, namely in investment, financing, research and development, marketing, restructuring and reorganization of activities, as well as forecasts and budgets relative to global business, and business division or product;
  • Guidelines regarding the company’s transfer pricing policy, with instructions on methodologies to be applied, procedures for gathering information, analysis of the comparability, cost accounting policies and profit margins; and
  • Contracts or other legal instruments entered into with both associated enterprises and independent entities.


The simplified documentation model applies to taxpayers that qualify as small or medium-sized enterprises and are not exempt from the transfer pricing requirements.

The following information is required to be provided under the simplified documentation model:

  • Identification of the related parties involved;
  • Description, characteristics, and value of the related party transactions;
  • Identification of the TP methods used; and
  • Identification of the comparables obtained and values or ranges of values resulting from the application of the TP methods.

The simplified documentation model must also include elements that demonstrate the arm’s length nature of the following transactions:

  • Related transactions of any nature carried out with non-resident entities subject to a favourable tax regime (see Sec. 13.5. for the list);
  • Business transfers;
  • Transfers of securities, shares, equity not traded on regulated stock markets, or traded on regulated markets located in low-tax jurisdictions (see Sec. 13.5. for the list);
  • Business reorganizations or restructurings; and
  • Transactions involving intangibles.

It is clarified that preparation of the simplified model does not preclude the taxpayer from the obligation to provide all relevant information to the tax authorities to prove that the terms and conditions used in the controlled operations comply with the arm’s length principle.

Taxpayers applying the simplified documentation are required to prepare the documentation by the 15th day of the 7th month following the close of the tax year, and it is to be submitted upon request.

Regarding intra-group services, the information referred to above must be supported by documents generated by the taxpayer or by third parties and should relate to the tax year in which the transactions were carried out (see Sec. 13.4.2.).

Country-by-Country (CbC) Reporting

The CbC reporting requirements apply in Portugal for fiscal years beginning on or after 1 January 2016 for MNE groups meeting a consolidated group revenue threshold of EUR 750 million in the previous year. The requirements are in line with the guidelines developed as part of Action 13 of the OECD BEPS project and the EU regulations.

The reporting requirement primarily falls on resident ultimate parent entities (UPE) meeting the turnover threshold. The requirement is shifted to Portuguese resident constituent entities if:

  • The non-resident ultimate parent is not required to submit a report in its jurisdiction of residence;
  • The ultimate parent's jurisdiction of residence does not have an agreement for the exchange of CbC reports with Portugal; or
  • There is a systemic failure for exchange, and the non-parent constituent entity has been notified.

If there are multiple constituent entities required to file the CbC report, one of the entities may be designated to submit the report on behalf of all. Further, where a surrogate parent entity has been designated to file the CbC report in another jurisdiction, the local filing requirement will not apply subject to certain conditions, including that the report will be exchanged with Portugal and the tax authorities are duly notified.

Where a non-parent constituent entity is required to file locally, such an entity is required to gather all the required information for the CbC report from the foreign ultimate parent. In case the ultimate parent entity refuses to provide all the required information, then a CbC report is still required to be filed using available information and notification of the parent entity's refusal must be reported to the tax authorities.

The deadline for filing of CbC report is 12 months from the close of the reporting fiscal year.

Further, a notification informing the identity and tax residence of the reporting entity is also required to be provided to the Portuguese tax authority by the end of the fiscal year concerned. The deadline of standard CbC notification is changed from the end of the reporting fiscal year to the last day of filing the annual tax return of the notifying entity.

The CbC report and notification are required to be filed electronically on the

Language of Documentation

The transfer pricing documentation is required to be prepared in the Portuguese language. Documents containing information in any other language are required to be translated into Portuguese before submission. CbC reports are also prepared in the Portuguese language, although English may be accepted upon request.


The penalty for failure to submit transfer pricing documentation, CbC reports, and CbC notifications including failure to timely submit such documentation ranges from EUR 500 to EUR 10,000. An additional penalty of 5% applies for each day of delay.

The penalty for inaccuracies in the information submitted in the transfer pricing documentation, CbC reports, and CbC notifications ranges from EUR 375 to EUR 22,500.