Transfer Pricing
Country Summary

This document summarizes the transfer pricing requirements and regulations in Portugal. It highlights significant changes introduced through State Budget Law in 2021, extending the rules to cover Personal Income Tax. The article emphasizes the legal basis in the Corporate Income Tax Code and details the impact of a new bill presented in 2019. It also addresses secondary legislation and highlights Portugal’s compliance with OECD guidelines and international reporting standards.


History of Transfer Pricing Regulations in Portugal:

Portugal’s transfer pricing regulations have a history dating back to the year 2000 when Law 30-G/2000 was introduced, applicable from January 1, 2002. Recent changes in 2021 extended these rules to the Portuguese Personal Income Tax Code.

Legal Framework and Recent Updates:

The core legal framework for transfer pricing is established in Articles 63 and 138 of the Corporate Income Tax Code, while a bill introduced in 2019, Bill 119/2019, brought significant changes to these regulations, influencing transfer pricing mechanisms and documentation requirements. The new legislation became effective in October 2019.

Documentation and Compliance:

The transfer pricing documentation requirements are well-defined, with specific rules for taxpayers with an annual turnover of EUR 3,000,000.00 or higher, focusing on various aspects of related-party transactions.

Advanced Pricing Agreements (APAs):

To enhance legal security and eliminate double taxation, Portugal introduced Advance Pricing Agreements (APAs) in 2008. These can be unilateral, bilateral, or multilateral, with specific guidelines for their application.

Penalties and Compliance:

Portugal enforces penalties for non-compliance, and the recent 2019 changes have further strengthened these rules.

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