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Place of business or branch

An overseas company carrying out businesses in Portuguese territory may be required to incorporate a Portuguese Branch. The Portuguese Tax Law establishes in which situations the activities carried out by a non resident company in Portugal are deemed to constitute a Portuguese Permanent Establishment / Branch.

Business structure Partnerships Taxation Corporation tax

 

When the non-resident company operating in Portuguese territory is a resident of a State with a Double Tax Treaty signed with Portugal, the provisions of the relevant treaty must be taken into consideration in determining if such operations should give rise, or not, to a Permanent Establishment in Portugal of that company. When a non-resident company is considered to have a Permanent establishment in Portugal, such Permanent establishment / branch is, in broad terms, treated as a Portuguese resident company, with the same reporting and tax obligations, in what respect to the activities carried out in Portugal.

The following situations do not give rise to a Permanent Establishment / Branch in Portugal:
• The use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the non-resident company;

• The maintenance of a stock of goods or merchandise belonging to the non-resident enterprise solely for the purpose of storage, display or delivery;

• The maintenance of a stock of goods or merchandise belonging to the non-resident enterprise solely for the purpose of processing by another company;

• The maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting information for the non-resident enterprise;

• The maintenance of a fixed place of business solely for the purpose of carrying out, for the non-resident enterprise, an activity of a preparatory or auxiliary character.

 

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