Expresso newspaper reports that a North American company sold a property worth 3 million euros in Loulé and contested the tax claimed by the Tax Authorities, which considered all the capital gains.
However, the STA agreed with the State, denying the possibility of taxation taking into account only 50% of the gains, as happens for IRS taxpayers.
“The taxable amount of capital gains realised on the sale of property located in our country, by a non-resident company without a permanent establishment in Portugal, applies to its entirety, and the 50% reduction is not applicable”.
This ruling makes sense to me on its face. While I am not familiar with the details of the case, a non-resident foreign company with no "permanent establishment" as that term is commonly used in international tax treaties, probably paid no tax on any income generated by its activities in Portugal. Capital gains on a real estate sale seems eminently fair and appropriate to me.
By Eugene Flynn from Other on 12 Mar 2024, 13:58
Sounds like a win for Portugal - hopefully it won't put off North American companies investing in real estate, given capital gains tax here is higher than corporation tax in NA.
By Pesr from Lisbon on 17 Mar 2024, 14:58