Archive for July, 2013


Reform of the Corporate Income Tax Code

In on July 31, 2013 by NEWCO

In order to make Portugal more competitive in respect of corporate taxation, thereby attracting domestic and foreign investors, creating new jobs and boosting all economic activity, the Portuguese Government has created a Corporate Income Tax (CIT) Reform Commission.

Now that the Commission has presented its proposals and recommendations, here are some of the most important points:

  • A progressive reduction of the nominal rate of CIT in force in Portugal until a range of between 17% and 19% is reached in 2018 (not applicable to IBC companies who will continue to benefit from the reduced rate of 5% until the end of 2020)
  •  Simplification of the accessory obligations that exist in the regimes of transfer pricing, loss relief, elimination of double taxation and the certification of items, such as RFIs
  • The negotiation or renegotiation of conventions with Portugal’s main trade partners to avoid double taxation
  • Introduction of a participation exemption regime for the purpose of eliminating economic double taxation of a universal nature, applicable to profits resulting from investment in shareholdings, independently of the geographical area in which they are materialised, with the exception of tax havens, as long as:
    • the qualifying shareholding has been held for one year
    • the company in which the shares are held is subject to, and not exempt from, income tax at a rate which is not less than 10%
  • Creation of a tax credit to eliminate international economic double taxation on the profits of qualified shareholdings to which the exemption referred to in the previous paragraph does not apply, and which shall not be applicable when the company in which the shares are held is domiciled in a tax haven
  • Deadline for using the tax credit for international double taxation to be extended to five years
  • The creation of an optional exemption regime for the profits and losses of permanent establishments abroad, which shall not be applicable to permanent establishments located in tax havens
  • Establishment of a 15-year tax loss reporting period, applicable only to losses occurring after 1 January 2014
  • Special tax regime for certain incomes from intellectual property originating abroad (patent box) and creation of a regime whereby patents, models and industrial designs developed internally are considered at only half their value

If these measures proposed by the Commission are approved, they will also be applicable to IBC companies, leading to even greater competitiveness.

NEWCO will be keeping its clients and contacts informed of the developments of this reform.

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Modifying agreement of the Convention between Portugal and Singapore

In on July 11, 2013 by NEWCO



The approval and ratification of the Modifying Agreement of the Convention between Portugal and Singapore for the Avoidance of Double Taxation with respect to Taxes on Income and on Capital, signed in Singapore on 28th May 2012, have been published today.

Decree of the President of the Republic n.º 78/2013

Resolution by the Assembly of the Republic n.º 96/2013

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Interview with FinanceMalta

In on July 10, 2013 by NEWCO



Interviewed by NEWCO, Mr. Bruno L’ecuyer, Head of Business Development at FinanceMalta, highlights the reasons behind Malta’s economic success and explains why Malta should not be compared to Cyprus.


1. According to your records, more than 4,000 new companies were registered last year in Malta – one of the highest increases on record. How do you explain such numbers at a time of international crisis and recession?

First of all, it’s important to note that this figure is representative of all companies set up in Malta and not only financial services ones. Secondly the island has been enjoying strong growth since joining the European Union in 2004, and especially so since the financial crisis which has not affected the country as hard as others in the EU bloc, mainly due to our conservative banking and robust regulatory regime in place. 


2. We understand that nearly three quarters of such companies stem from outside the EU. Which markets are more relevant and what makes Malta attractive for non-EU companies?

We have made significant efforts to improve our ties with important or emerging markets including China, Singapore, and Latin America.  The reasons for our attractiveness are many, we are a highly productive, flexible nation, added to this, we have, throughout the years invested heavily in education – particularly in ensuring that the vast majority of our workforce is English speaking, and IT literate, we have also built a legal and regulatory framework which is modelled on international best practice. This added to our geographic location, EU and Euro membership as well as our highly competitive fiscal system and our advanced telecommunications infrastructure helped Malta to win both investment and international recognition.


3. Malta has been in the spotlight because of comparisons with Cyprus and fears of a similar fate in Malta. How have current investors in Malta reacted and what have you done to appease their concerns, if any?

The recent events surrounding the collapse of the Cypriot banking system and the Eurogroup’s unprecedented plans for a Cypriot restructuring programme have brought to the fore questions about Malta’s economy and its banking sector.

These questions have been fuelled mostly by pieces drawn up by certain members of the international press suggesting speculative and superficial comparisons between the two Mediterranean island states – comparisons which are both misinformed and misconstrued.  Malta and Cyprus have fundamentally different economies, as proved by various statistical parameters and reports such as that by the IMF, EC, Bloomberg and various ratings agencies. The list of similarities between Cyprus and Malta which observers spot immediately is short: both are Mediterranean island states, members of the European Union and the Eurozone, and both have a track record of financial services activity. Our investors have quickly cast aside the tabloid press reports and sought out factual information such as that above which has quickly settled any concerns they may have had when the crisis erupted.


4. What is currently being done to enhance Malta’s competitiveness and its ability to attract foreign investors?

What is happening around us influences our economic well-being. The positive thing is that we have always been a forward looking nation. Currently we are focusing our resources and energy on the high value added sectors in our economy in which we believe there is potential for further growth. We are supporting this growth in a number of ways including: quality investment in education and training, beefing up our IT infrastructure and eGovernment services; providing incentives to different industry sectors to invest, innovate and expand.


To learn more about the differences between Malta and Cyprus, download our guide on the Soundness of Malta’s Economy.

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Double tax treaty between Portugal and Cyprus

In on July 1, 2013 by NEWCO

Cyprus flag


The Resolution by the Assembly of the Republic No. 89/2013, published today, approves the Convention between the Portuguese Republic and the Republic of Cyprus for the Avoidance of Double Taxation and the Prevention of Tax Evasion with respect to Taxes on Income.

The text of the Convention is available in English and Portuguese: Resolution by the Assembly of the Republic No. 89/2013

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