Relief at source – eligibility, documentation, deadlines – Portuguese debt securities – CBF
Who can obtain relief at source?
Relief at source of withholding tax on interest from Portuguese debt securities is available through Clearstream Banking for beneficial owners depending on the applicable legislation, as follows:
Domestic bonds subject to Law 83/2013 clarified by Circular Letter 4/2014
Eligible beneficial owners | Rate applicable at source |
Credit institutions, financial companies, pension funds, insurance companies domiciled in an OECD Member State or in a DTT country | 0% |
Collective Investment Vehicles (CIVs) domiciled in an OECD Member State or in a DTT country | 0% |
Central banks, public law agencies, public law entities or International/Supranational organisations recognised by the Portuguese state | 0% |
Portuguese residents eligible for tax exemption | 0% |
Portuguese residents not eligible for tax exemption but applying for reduced tax rates | 25% / 28% |
Documentation requirements
There are different documentation requirements depending on the status of the beneficial owner or client.
To apply for tax relief at source, all clients holding Portuguese debt securities must submit:
- a Master Instruction Portuguese Debt Securities – DL 193/2005 Of November 7 (the MI) for each tax relief account: one-time certificate at the level of the client’s account. A new MI must be provided if any change occurs that renders the Mi untrue.
and,
depending on the status and residency of each final beneficial owner:
DTT/TIEA residents eligible for tax exemption (or that are not, otherwise, residents in a blacklisted jurisdiction nor within the scope of any of the specific rules below)
- A Certificate of Residence (COR) or an equivalent document issued by the beneficiary’s local tax authorities; or
- A document issued by the local Portuguese Consulate attesting to the beneficiary’s residency abroad (applicable to individuals only); or
- A document issued by any other public authority attesting to the beneficiary’s residence in the country of which they claim to be resident.
The validity of any of above documents is three years.
Central banks, public law entities, public law agencies, or supranationals/international organisations recognised by the Republic of Portugal (or a body of such recognised international/supranational organisation to whom the same immunities and privileges should be availed to).
Credit institutions, financial companies, pension funds, and insurance companies domiciled in an OECD Member State or in a DTT country
- One-time official document of tax identification; or
- A one-time declaration issued by the tax authority or by the competent public body in beneficiary’s State of residence responsible for the regulatory supervision of its business attesting that it was validly created under the laws of its State of residence as well as its domicile; or
- A COR or an equivalent document issued by the beneficiary’s local tax authorities or by any official government entity authorised to issue such certification, to be renewed every three years.
Collective Investment Vehicles (CIVs) domiciled in an OECD Member State or in a DTT country
- Declaration issued by the tax authority or by the competent public body in the beneficiary’s State of residence responsible for the regulatory supervision of its business attesting that it was validly created under the laws of its State of residence, the law governing its formation, as well as its domicile; or
- A COR or an equivalent document issued by the beneficiary’s local tax authorities or by any official Government entity authorised to issue such certification, to be renewed every three years.
Portuguese entities not subject to withholding tax, in accordance with the Portuguese legislation
Form descriptions are presented according to the procedures available for relief and/or reclaim of withholding tax on income from Portuguese debt securities.
Portuguese residents applying for reduced withholding tax rate
Deadlines for receipt of documents
Documentation for relief at source of withholding tax on interest from Portuguese debt securities must be received by Clearstream Banking at least one business day before the respective payment date by 10:00 CET.
Important note:
If any instruction, tax certification or amendment is received after these deadlines, the client’s entire application for relief at source will be rejected.