EY Tax Guide 2018

Foreign permanent establishments
• Provided certain conditions are met, and upon election, the
taxpayer may exclude from the taxable basis the taxable profits
or tax losses of foreign permanent establishments. Recapture
rules may apply in specific situation.
• There are several provisions restricting the deduction of losses
on shares, upon disposal or liquidation.
Tax grouping
• Resident companies may form a tax group provided, inter alia,
the parent company owns, directly or indirectly, at least 75%
of the capital granting more than 50% of the voting rights in
the subsidiaries. Horizontal tax grouping – where a common UE
parent company exists – is available.
Exit tax
• The transfer of the company’s residence or permanent
establishment’s activity abroad trigger an exit tax. This may not
apply to the transfer of residence to the EU in case the assets
and liabilities remain allocated to a permanent establishment in
Portugal. The payment of the tax due may occur immediately
or be deferred (in which case interest shall be charged and a
guarantee may be required).
Simplified regime of taxation
• A simplified regime of taxation – taxable profit being computed
as a certain percentage of gross income – is available for
companies that, inter alia, in the previous year stated a
turnover not exceeding €200,000.00 and total assets not
exceeding €500,000.00.
Tax Guide 2018 15