Real Estate Tax Planning in Portugal

The offshore company holding Portuguese real estate case-study

Ricardo da Palma Borgesricardo@rpba.pt

www.rpba.pt

Tax wisdom (opening)

People who complain about the real estate taxation

systems generally fall into simple categories:

– Buyers and sellers;

– Lessors and lessees;

– Men and women;

– Etc.

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Portuguese relevant taxes after the estate tax reform of 2003

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Property Transfer Tax (PTT) Previously Imposto Municipal de Sisa; Currently Imposto Municipal sobre as Transmissões

Onerosas de Imóveis;

Property Ownership Tax (POT) Previously Contribuição Autárquica;

Currently Imposto Municipal sobre Imóveis;

Gift and Inheritance Tax (GIT) Previously Imposto sobre as Sucessões e Doações; Currently Stamp Tax (individuals) or Corporate

Income Tax (corporate entities);

Stamp Tax (ST) Imposto do Selo;

Capital Gains Tax (CGT) Part of Personal Income Tax (PIT) or Corporate

Income Tax (CIT).

The purpose of this presentation

The use of a case-study with an offshore company holdingPortuguese real estate for housing / leisure purposes, notgenerating any income.

To illustrate Portuguese real estate tax planning issues.

Especially the way in which taxation affects the situation of ablacklisted offshore company (OFC) holding Portuguese realestate.

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Exclusion from taxation of shares or quotas in Joint Stock Companies / Private Limited Companiesacquired previously to 1 January 1989 (regardless of the holding of real estate by the company)

Portuguese companies or also foreign equivalent companies?

Ubi lex non distinguit nec nos distinguere debemos:

– Silence of the PIT Code;

– EU and tax treaty principle of non-discrimination.

Tax treaties entered into by Portugal generally follow the OECD Model Tax Convention, whosearticle 13, paragraph 5, attributes an exclusive taxation right on capital gains in shareholdings tothe State of residence of the alienator, preventing the State of source from levying its own taxes.

Therefore, some foreign wealthy individuals have moved to Portugal and acquired residencyherein before disposing of their investment empires tax-free.

PIT capital gains on the sale of a taxpayer's personal and permanent residence are not taxable,insofar as the sale proceeds are reinvested in another personal residence in the Portuguese,European Union or European Economic Space territory.

Interesting features of the Portuguese tax system (PIT) – capital gains

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A favorable PIT regime for non-habitual tax residents (NHR) hasbeen introduced in 2008, under which those acquiring aPortuguese tax residence without having one in the previous 5years are granted, for a 10-year period:

– The exemption method to avoid double taxation regardingforeign source income;

– An autonomous (rather than progressive) taxation ofdependent and independent work income from high value-added activities of a scientific, artistic or technical nature (asdefined by a Ministerial Order).

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Interesting features of the Portuguese tax system (PIT) – non-habitual resident (NHR) regime

Under the regime, foreign income is exempt, provided that it is taxed abroad(in the case of dependent work income) or that it may be taxed abroad undera double tax treaty entered into by Portugal or according to the OECD ModelTax Convention and taking into account the reservations to the Model and theobservations to its Commentary submitted by Portugal, in the cases where nodouble tax treaty exists (all other categories of income, except (i) independentwork income, which must additionally derive from the mentioned high value-added activities in order to qualify for the exemption, and (ii) pensions, wherein the absence of Portuguese contributions, the foreign source payment of theincome may be enough to qualify for the exemption).

Dependent and independent work income from high value-added activities istaxed at a 20% autonomous rate (regardless of its domestic or foreign source,which means that the rate may apply to foreign income not qualifying for theabove-mentioned exemptions).

Interesting features of the Portuguese tax system (PIT) – non-habitual resident (NHR) regime (cont.)

7

For more information on this regime please read our presentation:

http://www.slideshare.net/RPBA/rpba-the-non-habitual-tax-resident-regime-

29102014-40958196

You can also visit our microsite www.nonhabitualtaxresident.com or scan the below

QR code with your smartphone:

Should you require in-depth information on this subject please check our Information

Note available at http://www.slideshare.net/RPBA/the-non-habitual-tax-resident-

regime-rpba30102014 8

Interesting features of the Portuguese tax system (PIT) – non-habitual resident (NHR) regime (cont.)

Interesting features of the Portuguese tax system (GIT)

From 1 January 2004 “Close Family” (spouses, civil law partners – since 2009,children, grandchildren, parents and grandparents) is exempt from GIT.

Non-exempt situations of disposal of most Portuguese assets with individuals asbeneficiaries are taxed through a 10% ST [with the notable exceptions of (i) sharesin companies whose head-office, effective management or permanentestablishment is in the Portuguese territory, and (ii) credit and other patrimonialrights over individuals or companies resident, with head-office, effectivemanagement or a permanent establishment herein, in both cases, (i) and (ii), whenthe individual beneficiaries are non-Portuguese residents; these two situations arenot liable to GIT].

Situations involving disposal of non-Portuguese assets with individuals asbeneficiaries are not liable to GIT.

Donations to corporate entities are income for CIT purposes.

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Tax Incentives for Urban Rehabilitation

PIT benefits for Portuguese tax residents:

a. The owner of the real estate is able to deduct 30% of the expenses incurred – up to 500,00€ – in order to

rehabilitate the property. Such costs must be proven and depend from prior certification. Consider i. to iii. below.

b. Rental income derived from rehabilitated real estate is taxed via an autonomous rate of 5%. Consider i. to iii.

below.

c. Capital gains fully derived from the disposal of rehabilitated real estate are taxed via an autonomous rate of 5%.

Consider i. to iii. below.

VAT benefits:

d. Works of urban rehabilitation benefit from a reduced VAT rate of 6%, instead of the general rate of 23%. Consider

iv. below.

Further requirements and notes:

i. The rehabilitation work on the real estate in question must be finished until 31 December 2020.

ii. The real estate must be located in “urban rehabilitation areas” – special regions designated by each municipality –,

or must have been built more than 30 years ago, being in need of rehabilitation, and its primary purpose must be

a residential use.

iii. The benefits are granted on the condition that the rehabilitation work increases the preservation state of the real

estate at least two levels above the pre-rehabilitation condition, a condition that must be verified by the local

municipality before and after the rehabilitation.

iv. “Works of urban rehabilitation” are the ones deriving from the Legal Regime of Urban Rehabilitation.

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Tax Incentives for Urban Rehabilitation (cont.)

PTT benefits:

a. Rehabilitated real estate is exempt from PTT in the first transaction after the rehabilitation, if the property is meant exclusively

for the permanent dwelling of the buyer. Consider i. to iv. plus vi. below.

b. Purchases of urban property meant to be rehabilitated are exempt from PTT, as long as such works of rehabilitation

commence within 3 years from the date of acquisition. Consider v. to vi. below.

POT benefits:

c. Real estate subject to rehabilitation work is exempt from POT for a 5-year period, renewable for an additional period of 5

years. Consider i. to iv. plus vi. to vii. below.

d. Rehabilitated urban property is exempt from POT for a 3-year period starting from the year the municipality license is issued.

Consider v. to vii. below.

Further requirements and notes:

i. The rehabilitation work on the real estate in question must be finished until 31 December 2020.

ii. The real estate must be located in “urban rehabilitation areas” – special regions designated by each municipality –, or must

have been built more than 30 years ago, being in need of rehabilitation, and its primary purpose must be a residential use.

iii. The exemption is dependent on a deliberation by the Municipal Assembly.

iv. The exemption is granted after the completion of the rehabilitation work.

v. The exemption is granted prior to the completion of the rehabilitation work.

vi. The legal definition of “urban rehabilitation” relevant for a) and b) PTT benefits or c) and d) POT benefits is not exactly the

same.

vii. The Portuguese Tax Authorities construe the two POT benefits as alternative, not cumulative.

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Relevant entities

Joint Stock Company / Corporation or Portuguese SociedadeAnónima (SA).

Private Limited Company or Portuguese Sociedade por Quotas(Lda.).

Real Estate Investment Fund or Portuguese Fundo deInvestimento Imobiliário (FII).

Limited Liability Company (LLC).

Limited Liability Partnership (LLP).

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Real Estate Investment Fund (FII)

Assets of investment fund: (i) urban real estate property or similar rights; (ii) rural or mixedreal estate and exploitation rights on immovable property; (iii) real estate companies (withconditions); (iv) participating units in other FIIs (with conditions); and (v) derivatives whichaim to hedge the underlying risks of the FII assets.– Assets with liens that excessively complicate their disposal cannot integrate the property of the FII,

namely assets given as colateral.

Closed-end funds:– (i) real estate and like-assets cannot be lower than 2/3 of total assets;– (ii) construction projects cannot be more than 50% of total assets (60% for reconstruction);– (iii) any immovable cannot represent more than 25% of total assets;– (iv) the value of leased properties cannot be more than 25% of total assets;– (v) indebtedness cannot be more than 33% of total assets;– (vi) participation in real estate companies cannot exceed more than 25% of total assets.

Advantageous CIT regime, in which capital gains, rental income and capital income are notaccounted for the determination of the taxable income, apart from the case in which thisincome relates to an OFC; 21% CIT rate on taxable income; no withholding taxes on theincome received by the FII; POT and PTT rates are half of the general applicable rates (notapplicable to closed-end funds with private subscription).

No Municipal or State Surcharge.

ST is due on the net global value of the FII at a 0.0125% rate, on a quarterly basis. 13

Other entities Real Estate Inventory or Compra de Imóveis para Revenda (CIR) tax status is available for individuals,

Portuguese companies or branches of foreign companies which, in principle, are:

– inscribed as such in the tax office;

– declare the “purchase for resale” in the public deed of acquisition;

– have the “purchase for resale” as an entrepreneurial activity (set in the social object in case of a company);

– register the real estate as inventory (not as a fixed asset) in their accounts.

CIR defers / exempts the real estate from POT during 3 years in case of purchase for resale.

– possibility of cumulating a POT deferral / exemption during 4 years for plot construction if enterprise hassuch an activity (set in the social object in case of a company) and a subsequent POT deferral / exemptionof 3 years on the sale of the built real estate.

CIR provides a PTT upfront exemption on the purchase (if a previous “purchase for resale” has been madein the previous year), or a refund of PTT paid upon resale (otherwise).

Tax rate: 21% on lease, resale or development in the case of a company or branch, plus up to 1.5% ofMunicipal Surcharge (total 22.5%) and 3%, 5% or 7% of State Surcharge (on taxable income in excess of €1.500,000, € 7.500,000 and € 35.000,00, respectively); 0%-48% (the higher bracket being applicable toincome above € 80.640) in the case of a resident individual (plus an additional solidarity rate of 2.5% onincome in excess of € 80.000 and of 5% on income in excess of € 250.000 and also an extraordinaryprogressive surtax in 2017 with the higher bracket of 3.21% being applicable to income above € 80.640).

Low management and maintenance costs; high flexibility.

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The case-study situation

X beneficially owns real estate in Portugal which isregistered in the name of a blacklisted OFC.

Irrelevance of nominee or actual share/quotaholders ordirectors, trusts or other, if the formal owner of the realestate, as registered in Portugal, is an OFC.

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Problems

Since 2001 the enjoyment of an (non-leased)immovable whose acquisition value is equal or higherthan € 250.000 and was purchased by an OFC maydeem the individual to have an annual PIT taxableincome of 20% of the acquisition value - i.e., € 50.000and above - if he declares no income or less than 30%of that yearly value.

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More problems

Asset development land or inventory building for resale inscribedin an OFC account after 2002 no longer qualifies for deferral /exemption of POT (currently 4 years - 5 before 2004 - and 3 years,respectively).

Properties leased by an OFC after 2002 under the controlledrents system no longer qualify for objective exemptions from POT(the system was abolished as of 1 January 2007).

Properties which have been newly built, rebuilt, improved orbought after 2002 by an OFC no longer qualify for objectiveexemptions from POT.

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Still more problems

POT collected for 2003 on non-exempt Portuguese realestate whose taxpayer (owner unless there is anotherenjoyer, namely under usufruct) is an OFC was 2% on itstax value, instead of standard rates between 0 and0.8%.

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Still more problems (cont.)

POT collected for 2004, 2005 and 2006 on non-exemptPortuguese real estate held by an OFC was 5% per yearon its tax value, instead of standard rates between 0 and0.8%.

The tax value of real estate held by an OFC was updatedas per inflation on 31 December 2003, but without thestandard transitory and progressive caps.

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POT collected for 2007, 2008, 2009 and 2010 on non-exempt Portuguese real estate held by an OFC was 1%per year on its tax value or 2% in case of a empty urbanproperty, instead of standard rates between 0 and 0.8%.

Still more problems (cont.)

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POT collected for 2011 on non-exempt Portuguese realestate held by an OFC was 5%, instead of standard ratesbetween 0 and 0.8%.

POT collected from 2012 onwards on all Portuguese realestate held by an OFC is of 7.5%, instead of standardrates between 0 and 0.8%.

Still more problems (cont.)

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Still even more problems

An OFC that owns non-leased urban property or propertythat is not used for business purposes in Portugal is deemedsince 2002 to have obtained minimum presumptive rentincome in an amount corresponding to 1/15 of the

immovable’s tax value, which will also be taxed for CITpurposes (at a 25% rate in 2004, at a 15% rate from 2005until 2011, at a 16.5% rate in 2012 and at a 25% rate from2013 onwards).

Operational and financial leasing rents paid to an OFC arenot tax deductible for Portuguese resident individuals.

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Still even more problems (cont.)

In order to reverse the legal presumption, the targeted OFCmust demonstrate that the urban property is not enjoyed byan entity domiciled in the Portuguese territory and that it isempty.

If the OFC is not able to reverse the legal presumption, it willhave to appoint a Portuguese resident individual orcompany as tax representative to deal with the CIT on thepresumptive rent income.

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Never ending problems

An OFC should have reported to the Portuguese TaxAuthorities, up to the end of March 2002, that it heldPortuguese real estate.

Although the Portuguese Tax Authorities may act evenwithout this notice, due to the lack of update andinefficiency, there may be still uncollected CIT on theminimum presumptive rent income, POT deferrals andexemptions that have not been denied, punitive POT ratesthat have not been applied. In this case, the OFC has on-going liabilities (back taxes, interest, penalties).

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Starting from 1 January 2012, the statute of limitations for taxassessments in cases involving OFC was increased to 12 years (upfrom 4 or 8 years in normal cases) and for collection of tax debtsto 15 years (8 years in the remaining cases).

This increase is applicable to non-expired on-going periods, but ittakes into account all time elapsed since the initial moment.

OFC and other entities whose legal regime does not allow theidentification of their beneficial owners are not allowed to bid inauctions of seized property made by the tax authorities since2001.

Never ending problems (cont.)

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The saga continues

A ST on urban property with a tax value equal to or exceeding €1.000,000 was introduced in 29 October 2012.

This tax was due at a 1% rate on urban property assigned tohousing (i.e., the tax did not apply to industrial or commercialproperty, etc.).

However, this ST was applicable at a 7.5% rate on any urbanproperty held by an OFC, regardless of its destination/use.

This ST was repealed by the State Budget Law for 2017.

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The State Budget Law for 2017 replaced the ST by an Additional to the PropertyOwnership Tax (“APOT”).

This new APOT applies to owners, usufructuaries or superficiaries of urban property forhousing purposes or building land located in Portugal, on January 1st of the relevantyear.

Single owners with residential real estate or land for construction in Portugal above €600,000 of taxable value ("Valor Patrimonial Tributário" or VPT) are liable to APOT at a0,7% rate on the surplus of the € 600,000. If the sum of the taxable values exceeds €1.000,000, the surplus is subject to a marginal rate of 1%.

Owners which are married or in a civil partnership and choose the joint taxation regime– for purposes of the APOT – are only liable to APOT if the sum of the taxable value oftheir real estate is above € 1.200,000. The APOT applies a 0.7% rate on the surplus ofthe € 1.200,000. If the sum of the taxable values exceeds € 2.000,000 the surplus issubject to a marginal rate of 1%.

If the taxpayers obtain income attributable to immovable property subject to the APOT,the latter may be deducted from the PIT due in respect of rental income (Schedule F)or business income obtained from rental or hosting activities (Schedule B).

The saga continues (cont.)

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If a company holds real estate the APOT rate will be applied on the full taxable value ofthe real estate at a rate of 0.4% – not only on the surplus of a threshold.

If the owner is a company and the real estate is simply used by its shareholder/directoror any member of the corporate bodies of such company (including their respectivespouses, ascendants or descendants), the tax rate will be of 0.7% on its full taxablevalue. If the sum of their taxable values exceeds € 1.000,000 the surplus is subject to amarginal rate of 1%. In our opinion if the real estate is leased by the company to theshareholder or director the tax rate will be of 0.4%.

Taxpayers may choose for CIT purposes: (i) to deduct APOT as an expense; or (ii) todeduct the APOT from the tax due, limited to the fraction corresponding to the incomegenerated by that real estate, in the context of rental or hosting activities, and up tothat tax due.

If the company is resident in a jurisdiction included in the Portuguese tax havens’blacklist, the real estate so held is liable to an APOT rate of 7.5% on the sum of thetaxable values of the real estate, without possibility of deducting the charge for CITpurposes.

The saga continues (cont.)

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Most obvious solution

Do nothing (especially if you are in Gibraltar – see slide 32below).

Suffer the punitive POT and APOT, the deemed PIT taxableincome, and CIT on the presumptive rent income, in case the taxvalue of the immovable is low (although it was updated since2004). Or

Accept that due to the lack of update and inefficiency of thePortuguese Tax Authorities there are liabilities (POT, APOT andCIT back taxes, interest, penalties).

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Other solutions

Transfer the real estate from the OFC into private andindividual names or to another entity (e.g. a Portuguesecompany, eventually with CIR status, or an FII).

Redomicile the OFC holding the Portuguese real estateto another (non-blacklisted) jurisdiction:

– Abroad; or

– On-shore (Portugal)

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Transfer solution – sale of the real estate

The problem with this solution is that it:

– Triggers CIT (25% CGT), PTT (up to 6.5%) and ST (0.8%), levied on the higher ofdeclared or tax value, but subject to correction towards market value, as well aslegal, notary and registry fees;

– may not exempt the real estate from POT, depending on the tax value of theimmovable:• CIR status enables, for inventory real estate, a POT deferral / exemption during 3 years and a

PTT exemption on the purchase, or a refund of PTT paid upon resale;

• FII acquisition enables (in some cases) POT and PTT exemptions.

– eliminates almost all tax planning solutions for the future, with the exception of:• i) full capital gain reinvestment relief if the real estate is the individual taxpayer’s personal and

permanent residence in Portugal and all the sale proceeds are reinvested in an immovable forthe same purpose in the EU OR EEA (with exchange information) territory; or

• ii) the Portuguese company or branch can consider the immovable to be an asset and makes aqualifying reinvestment upon sale, in which case the maximum effective rate of CIT would be12.5%.

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Transfer solution – donation of the realestate to an individual

The problem with this solution is that it:

– triggers GIT (at a 10% rate) and ST (0.8%), or CIT (at a 25%rate);

– in the case of donation, the acquisition value for future CGTpurposes under the PIT will be the tax value for GIT purposes(vs. the fair market value, for CIT);

– never exempts the real estate from POT;

– may give rise to a new tax evaluation.

But there is a loophole…

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“Redomicile” solution – what does it mean?

It means that the existing legal personality of the OFC will be kept,although its seat and governing law will change.

Since the existing legal personality is kept no transfer of the OFC’sassets is deemed and no taxable event occurs.

In spite of all the changes (which may even include the OFC name) it isstill the same “old” company.

This depends on the acceptance of the continuance of the legalpersonality of the OFC under the company law of both the existingjurisdiction (where the OFC redomiciles from) and the new jurisdiction

(where the OFC redomiciles to).

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Portuguese blacklisted jurisdictionsAndorra Honduras Puerto Rico

Anguilla Hong Kong Qatar

Antigua and Barbuda Jamaica The Solomon Islands

The Netherlands Antilles Jordan American Samoa

Andorra Guyana Puerto Rico

Anguilla Honduras Qatar

Antigua and Barbuda Hong Kong The Solomon Islands

The Netherlands Antilles Jamaica American Samoa

Aruba Ascension Jordan Samoa

The Bahamas The Queshm Island St. Helena

Bahrain Kiribati Kuwait St. Lucia

Barbados Labuan St. Kitts-Nevis

Belize Lebanon San Marino

Bermuda Liberia St. Pierre and Miguelon

Bolivia Liechtenstein St. Vincent and the Grenadines

Brunei The Maldives The Seychelles

The Channel Islands (Alderney, Guernsey, Great Sark, Herm, Little Sark, Brechou, Jethou and Lihou)

The Northern Marianas Islands Swaziland

The Marshall Islands Svalbard Islands (Spitsbergen archipelago and the Bjornoya island)The Cayman Islands Mauritius

The Cocos o Keeling Islands Monaco Tokelau

The Cook Islands Montserrat Tonga

Costa Rica Djibouti Nauru Trinidad and Tobago

Dominica Natal Tristão da Cunha Island

United Arab Emirates Niue Turks and Caicos Islands

The Falkland Islands Norfolk Island Tuvalu

Fiji Oman Vanuatu

Gambia Palau The British Virgin Islands

Grenada Panama The U.S. Virgin Islands

Gibraltar Pitcairn Island Yemen

Guam French Polynesia“Other Pacific Islands not specifically

mentioned”

Portuguese blacklisted jurisdictions – Gibraltar (but beware of Brexit implications)

Gibraltar is not a constituent part of the United Kingdom – it is a British overseas territory .

However, it is a part of the EU pursuant to article 355(3) and of Declaration 55 Annexed tothe Treaty on the Functioning of the EU (which reads as follows: “Declaration by theKingdom of Spain and the United Kingdom of Great Britain and Northern Ireland - TheTreaties apply to Gibraltar as a European territory for whose external relations a MemberState is responsible. This shall not imply changes in the respective positions of the MemberStates concerned”).

Therefore, it is highly doubtful whether Gibraltar’s inclusion in the Portuguese blacklist iscompliant with EU law (Cyprus was stricken from the list in 2011 on the basis of its prioraccession).

The UK has been condemned in the EU Court of Justice in 2005 for failing to implement inGibraltar Council Directive nr. 77/799/EEC, of 19 December 1977, concerning mutualassistance by the competent authorities of the Member States, in regard of indirect taxes(Gibraltar already exchanged it for direct taxes).

However, Portugal has entered into an agreement, which entered into force on 24 April2011, for exchange of information in tax matters with Gibraltar, which works independentlyfrom the Directive.

Therefore, the absence of exchange of information is not a valid argument for Gibraltar'sinclusion in the blacklist.

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General criteria for blacklisting jurisdictions The State Budget Law for 2014 provided new general criteria for blacklisting

jurisdictions. A jurisdiction should be listed if:

– It does not have a tax on income comparable to the Portuguese IRC or if such tax has anominal rate lower than 60% of the Portuguese rate;

– Its determination of taxable income diverges significantly from internationally accepted orapplied standards, namely by the OECD member countries;

– It has special taxation regimes or tax benefits such as exemptions, deductions or credits,more favorable than the Portuguese ones, that lead to a substantial reduction of taxation;

– Its law or administrative practice does not allow the access and exchange of tax, accounting,corporate, banking or information of other nature that identifies the shareholders or otherrelevant people, the holders of income, assets or rights and the performance of economictransactions.

Any listed jurisdiction may request to the Portuguese Government a revision andremoval from the blacklist grounded on the non-fulfillment of the general criteriamentioned above.

Any delisting will only have effects for the future and the list currently in force remainsapplicable until the publication of a new one.

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General criteria for blacklisting jurisdictions The State Budget Law for 2017 implemented that are equally considered jurisdictions

with more favorable tax regimes – despite not being blacklisted in the Ministerial Order– all the ones that do not have a tax on income comparable to the Portuguese CIT or ifsuch tax has a nominal rate lower than 60% of the Portuguese rate (i.e., 12.6%)provided that:

– The tax law mentions it expressly; and

– Individuals or entities with residence in such a jurisdiction are deemed associatedwith Portuguese residents under the transfer pricing rules.

However there is a carve-out for all EU Member-States and for EEA jurisdictions,provided that, in the latter, administrative cooperation in the field of taxation measuresequivalent to those existing in the EU are in place with that State.

This means that, from 2017 onwards, for some of the rules applicable in Portugal thatare intended to impose heightened taxation at the use of OFC’s, the mentioned“blacklist” – approved by Ministerial Order – is not enough to determine if a particularcountry is or is not a blacklisted jurisdiction.

Main advantages of redomiciling an OFC to a non-blacklisted jurisdiction

Avoiding the punitive POT.

Avoiding the punitive APOT.

Avoiding the PIT on the deemed income.

Avoiding the CIT on the presumptive rent.

Keeping some or all the advantages of the existing OFC structure.

38

Redomiciling abroad

Tested solutions: redomiciling Gibraltar companies toMalta and US (as LLCs).

Other possible less-tested solutions: redomicilingGibraltar or other (e.g. Cayman Islands) companies tothe UK (as LLPs), etc.

To be made by experienced foreign service providers(possibly the management company which runs theOFC).

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Reduced likelihood of future Portugueseblacklisting (US LLC)

The US LLC enjoys the political protection of a strong nation with long-standing relationswith Portugal, as well as tax transparent treatment. The Portuguese blacklist targets taxhaven jurisdictions and not special vehicles per se (in the past it targeted some specialLuxembourg companies).

The US LLC, even if not resident for tax purposes in the US due to its tax transparenttreatment, should still enjoy the tax treaty legal protection on non-discrimination grounds,as it is incorporated in the US, and is therefore a national of the US, in spite of limitation onbenefits clauses. In other words, it cannot be blacklisted.

The US LLC can elect (although with some extra cost and bureaucracy) to be taxed as aresident corporation in the US, and not as a disregarded / tax transparent entity (as itnormally is), and this would, in any case, enable it to benefit fully from the tax treaty.

Some US States (Delaware, Wyoming and Oregon) allow domestication, transfer of domicileor conversion to a foreign (non-US) jurisdiction, say Portugal. This provides an exit in case ofPortuguese blacklisting of LLCs. The Oklahoma LLC Act is silent on the issue. Maybe it ispossible to include in the articles of incorporation or in the operating agreements of anOklahoma LLC a reference to the possibility of domestication or transfer of domicile fromthere to a foreign jurisdiction (to be confirmed and tested in practice).

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Reduced likelihood of future Portuguese blacklisting (UK LLP)

The UK LLP enjoys the political protection of a strong nation with long-standing relations with Portugal, as well as tax transparent treatment. ThePortuguese blacklist targets tax haven jurisdictions and not special vehicles perse (in the past it targeted some special Luxembourg companies).

The UK LLP, even if not resident for tax purposes in the UK due to its taxtransparent treatment, should still enjoy the tax treaty legal protection onnon-discrimination grounds, as it is incorporated in the UK, and is therefore anational of the UK. In other words, it cannot be blacklisted.

The UK LLP should enjoy EU legal protection on non-discrimination grounds.

However, it is difficult to redomicile a UK LLP, as a change of domicile abroad isnot allowed under corporate law.

41

Reduced likelihood of future Portuguese blacklisting (Malta)

The Maltese company should enjoy tax treaty legal protection onnon-discrimination grounds, as it is incorporated in Malta, andtherefore a national of Malta. In other words, it cannot beblacklisted.

The Maltese company should further enjoy EU legal protectionon non-discrimination grounds.

The tax treaty with Malta fully entered into force on 1 January2003 and it is highly unlikely that it is terminated.

42

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Reduced likelihood of future Portuguese blacklisting (all) The LLCs and the LLPs are tax transparent, and therefore there is still the risk (not

currently happening) that the Portuguese Tax Authorities try to look through them todetermine who are their partners / members or directors.

If these are resident in blacklisted jurisdictions there is still the risk (not currentlyhappening) that the Portuguese Tax Authorities consider that the LLC or the LLP is notresident in the US / UK, but in the jurisdiction of its partners / members or directors, onthe basis of effective management.

The Portuguese Tax Authorities can still disregard a particular structure, on a case-by-casebasis, under a general anti-abuse rule, as they can in theory disregard structures that aretax driven. The general anti-abuse rule has been enforced in some cases (but generally notinvolving real estate tax planning). It is arguable whether and to what extent domesticanti-abuse rules can be enforced in EU situations and in tax treaty situations.

The Portuguese blacklist was updated in 2001 after many years. The Portuguese blacklistwas republished in 2004 unchanged vis-à-vis 2001 in spite of the Government being awareof massive redomiciliation in 2003 of Portuguese real estate holding OFC to the US, asLLCs, and to Malta. The blacklist was again revised in 2011 and in 2016, being that the US,UK and Malta were spared once more.

Costs and timeframe for redomicilingabroad

Lawyers fees for redomiciliation of OFC from Gibraltar to US.

Lawyers fees for redomiciliation of OFC from Gibraltar to Malta.

Annual maintenance fees (domiciliation and annual franchise tax)for US.

Annual maintenance fees (domiciliation and annual return fee)for Malta.

6 weeks.

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Appointment of a Fiscal Representative and of a Manager of Assets and Rights(a Portuguese company or a Portuguese resident individual), by non-residentsowning property in Portugal established outside the EU and the EEA, in thelatter case provided that an agreement for the exchange of information is inplace between Portugal and that state, following the CJEU’s decision in theCommission vs. Portugal case (C-267/09).

The Fiscal Representative is ultimately responsible, on behalf of the property-owning individual or company, for the formal filing of the annual tax return(PIT or CIT).

The Manager of Assets and Rights is ultimately responsible for the substantialpayment of all taxes due (PIT, CIT, POT, ST and CGT).

These fees have to be agreed on a case-by-case basis.

Costs and timeframe for redomicilingabroad (cont.)

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Important note on LLCs and LLPs

These vehicles are usually tax transparent, from the perspectiveof their state of organization.

Therefore, any income, as well as any tax liability, from theperspective of their state of organization, flows to theirmembers/partners.

If members/partners were resident in Portugal there might beproblems as Portuguese PIT and CIT tax the worldwide income ofits tax residents and has Controlled Foreign Company rules.

Therefore, only structures with non-Portuguese residentshare/quotaholders or members/partners and directors areclearly advisable in the case of redomiciling abroad.

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Future disposals with redomiciled abroad company (sale of company / beneficial ownership in company)

Portuguese CGT applies since 1 January 2015 to gains in the case of partition,liquidation, revocation or extinction attributed to beneficiaries who arePortuguese tax residents and who were founders in fiduciary structures.

For founders / settlors who are non-Portuguese tax residents:

– If the effective management is not in Portugal (e.g. non-Portuguese residentdirectors and share/quotaholders or members/partners are used at the level of theforeign company and a foreign trust law and trustees are used) no PTT or CGT isdue if the disposal is made by changing the beneficial owner in a fiduciarystructures by the former founder / settlor / beneficiary.

– If the effective management is not in Portugal (e.g. non-Portuguese residentdirectors and share/quotaholders or members/partners are used at the level of theforeign company) no PTT or CGT is due if the disposal is made by selling theinterest in the company, rather than the real estate.

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Future disposals with redomiciledabroad company (sale of real estate)

PTT (up to 6.5%), ST (0.8%) and CGT (25%) is due if the disposal ismade by selling the real estate, and not the interest in thecompany. A new tax evaluation of the immovable by thePortuguese Tax Authorities may occur.

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Future disposals with redomiciled abroad company (gift or inheritance of company)

The free transfer by gift or death of the beneficial ownership of a fiduciarystructure encompassing a foreign (incorporated) company whose effectivemanagement is not in Portugal (e.g. non-Portuguese resident directors andshare/quotaholders or members/partners are used at the level of the companyand a foreign trust law and trustees are used) and which has no permanentestablishment herein (namely because the real estate does not constitute one) isnot territorially liable to GIT if the beneficiary is an individual which is not taxresident in Portugal. If the beneficiary is a Portuguese tax resident individual inprinciple the free transfer will still not be territorially liable to GIT, but this willdepend on the type of fiduciary structure; otherwise exemption for close family /10% rate applies.

The free transfer by gift or death of a foreign (incorporated) company towardsindividuals, even if Portuguese tax residents, is not territorially liable to GIT (if weassume its effective management is not in Portugal and that there is no permanentestablishment herein) is not territorially liable to GIT if the beneficiary is anindividual which is not tax resident in Portugal; otherwise exemption for closefamily / 10% rate applies).

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Future disposals with redomiciled abroad company (gift or inheritance of company) (cont.)

The free transfer by gift or death of a foreign (incorporated) company, even ifits effective management is not in Portugal and there is no permanentestablishment herein, but whose assets are predominantly composed byrights over real estate in Portugal, is subject to CIT if the beneficiary is aPortuguese company, a permanent establishment in Portugal of a non-Portuguese tax resident company or even such last company in the absence ofa permanent establishment (at a 21% rate, plus Municipal and Statesurcharges if the beneficiary is a Portuguese company or a permanentestablishment; or at a 25% rate when the beneficiary is a non-Portuguese taxresident company without a permanent establishment herein).

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Future disposals with redomiciled abroad company (gift of real estate)

The free transfer by gift of Portuguese real estate:

– to an individual is liable to GIT (at a 10% rate) - plus a ST of 0.8%;

– to (i) a Portuguese or (ii) non-Portuguese tax resident company or (iii) to apermanent establishment in Portugal is liable to CIT [at a 21% rate, plusMunicipal and State surcharges in the cases (i) and (iii), and at a 25% ratein case (ii)];

and may give rise to a new tax evaluation of the immovable bythe Portuguese Tax Authorities.

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Tax wisdom (intermezzo)

I believe we should all pay our real estate tax bills with asmile.

I have tried – but they wanted cash.

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Redomiciling on-shore

Tested solution.

Not essential but interesting if you can give any other use to thePortuguese company (e.g., for an entrepreneur, or for leasing thereal estate).

Interesting if you have foreign source income, as if thePortuguese company is a Madeira Free Zone one, it could obtainlow-taxation of such income (see: http://pt.slideshare.net/RPBA/rpba-madeira-

free-zone-29102014).

To be made by an experienced Portuguese lawyer.

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How it works (simple outline)

Passing of a resolution of the OFC in order to approve the redomicile (to benotarised and legalised with the Hague apostille).

Issuing of a statement by a foreign notary or (maybe) lawyer stating the OFCjurisdiction will allow the redomiciling to Portugal without loss of legalpersonality (to be notarised and legalised with the Hague apostille).

Granting a power of attorney by the OFC to the Portuguese lawyer (to benotarised and legalised with the Hague apostille).

Translating into Portuguese certain foreign legal documents (by-laws,certificates of incorporation and legal standing, etc.).

The Portuguese lawyer redomiciles the company under a procedure similar toan incorporation / capital increase to the Portuguese minimums (€ 1 for a Lda.;€ 50.000 for an SA).

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Costs and timeframe for redomicilingon-shore

Portuguese lawyers fees.

Translations.

Notary and Registry fees, standard ST and Publications.

Maintenance fees.

Minimum CIT - € 1.000 (recoverable, in some situations).

2 months.

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Costs and timeframe for redomicilingon-shore (ST)

Previous to 29 April 2010 there used to be a 0.4% Portuguese ST which mightapply to the market value of the assets of a company that redomiciled toPortugal. In practice, the notaries did not levy this tax on the redomiciliation ofGibraltar companies. This may have been correct, according to EU Law.

It is general stated that: «Gibraltar entered the EC at the time of the accessionof the United Kingdom. It is among the European territories for whoseexternal relations a Member State is responsible under Article 227(4) of the ECTreaty. Article 28 of the Act concerning the Conditions of Accession and theAdjustments to the Treaties (which concerns the accession of the UK,Denmark and Ireland) provides that there shall be certain exceptions fromCommunity measures with respect to Gibraltar (the Common AgriculturalPolicy, Value Added Tax and the Community Common Tariff on Customs donot apply). Subject to these explicit exceptions, all legislation adopted by theCommunity since 1973 has been applicable to Gibraltar.»

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Costs and timeframe for redomicilingon-shore (ST – cont.)

Therefore, Council Directive 69/335/EEC of 17 July 1969 concerning indirecttaxes (although the characterisation of a ST as such is challengeable, someauthors considering it as a direct tax) on the raising of capital may beapplicable to Gibraltar.

There is a Gibraltar ST of 0.5% due on incorporation of a Gibraltar company. Ifthis can be said to be the transposition of the Directive, complying with itsguidelines, the 0.4% Portuguese ST did not apply. Nevertheless, this issomething that only a Gibraltar lawyer could guarantee, or at least opine on.

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Even without this confirmation, the levying of the said Tax would have beendifficult because:

i) notaries did not know, when making the public deed, what were the assets of a Gibraltarcompany;

ii) most Gibraltar companies did not have accounting records and it was barely impossible toknow their assets without cooperation of the parties to the deeds;

iii) there was no efficient exchange of information between the various sides of the Tax

Authorities (POT, PTT, ST, and CIT) and they, as well as the notaries, were not necessarily orimmediately aware that the redomiciled company had Portuguese assets;

iv) the notaries, until April 6, 2011, were used to levying a 0.4% Portuguese ST on the nominalcapital, or the increase of capital, on Portuguese redomiciled companies, to obtain theminimum Euro 5.000 of a Portuguese Lda. company (which should apply and was ananticipated cost of the structure), and probably thought that it would be a duplication tolevy another 0.4% on the real assets of the company;

v) if the issue was raised as a matter of surprise in the course of a public deed, the parties couldstill try to argue that the said Tax cannot apply under the EU grounds stated before, andcertainly the notary would be unprepared, or less prepared, to argue in favour of theenforcement of the Tax.

Costs and timeframe for redomicilingon-shore (ST – cont.)

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In any case, if there were any mortgages or liens to the assets of thePortuguese redomiciled company these could be claimed so as to diminish thenet value of those assets for purposes of the computation of the said 0.4%Portuguese ST.

If the notaries did not levy this ST, and confirmation of the EU law protectionwas not obtained, in practice a liability will remain for the Portuguesecompany redomiciled previously to 29 April 2010.

However, as the notaries only report to the Portuguese Tax Authorities thetransactions and the ST that, under their opinion, should be levied, in practiceboth the risk of a late detection and the degree of responsibility of thetaxpayer are largely reduced.

Costs and timeframe for redomicilingon-shore (ST – cont.)

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Important note on nominees

If you want to do away with nominees, namely nominee

share/quotaholders or members/partners, you should

do it before redomiciling the company to Portugal.

The change in share/quotaholders or

members/partners of a Portuguese company involves a

transfer which may be subject to PTT and CGT, as we

will see.

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61

Important note on Portuguesecompanies

Initially, it may be possible to make crossed

redomiciliation (e.g. redomicile a Gibraltar Joint Stock

Company as a Portuguese Lda.)

Subsequently, it is also possible (with more costs) to

transform a Portuguese Lda. into a Portuguese SA and

vice-versa (namely prior to the disposal of the

structure) so as to obtain the respective tax and or /

corporate advantages.

Future disposals with redomiciledon-shore company (sale of company) If share/quotaholders (individual Portuguese or foreign residents, or corporate

foreign residents) sell the interest in the Portuguese company:

— The latter is an SA or a Lda. and shares or quotas were acquired before 1 January1989: no CGT is due; PTT is not due on the sale of the SA / may be due on the saleof a Lda (see below).

— The latter is an SA and shares have been acquired before 1 January 2002 (undersome interpretations, although there is a recent tax arbitration court decisionstating that this specific exemption is no longer in force): no CGT and no PTT aredue;

— Other situations: 28% PIT CGT (computed on half-income if the company is notlisted and is a micro or small company) on the sale of the interest in the companyis due or 25% CIT CGT; PTT (up to 6.5%) may be due in the case of a Lda or othercompany when one of the quotaholders obtains 75% of the capital or the numberof holders is reduced to 2, husband and wife or civil law partners. So, 74% / 26%Lda. ownership structures are common.

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Future disposals with redomiciled on-shore company (sale of beneficial ownership in company)

For founders / settlors who are non-Portuguese tax residents, ifthe effective management of the fiduciary structure is not inPortugal (e.g. non-Portuguese resident share/quotaholders areused at the level of the Portuguese company and a foreign trustlaw and trustees are used) no PTT or CGT is due if the disposal ismade by changing the beneficial owner by the former founder /settlor / beneficiary.

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Future disposals with redomiciled on-shore company (gift or inheritance of company)

If actual share/quotaholders (Portuguese resident or non-resident) freetransfer the interest in the Portuguese company by gift or death to closefamily (spouses, children, grandchildren, parents and grandparents),Portuguese resident or non-resident, an exemption from GIT applies; to otherbeneficiary individuals a 10% rate applies.

If share/quotaholders (irrespective of Portuguese resident or non-resident,individual or corporate) free transfer the interest in the Portuguese companyby gift or death:

– to a beneficiary individual not-resident in Portugal - no GIT is due;– to a beneficiary which is a Portuguese company, a permanent establishment in

Portugal of a non-Portuguese tax resident company or even such last company inthe absence of a permanent establishment – CIT is due at a 21% rate, plusMunicipal and State surcharges if the beneficiary is a Portuguese company or apermanent establishment; or at a 25% rate when the beneficiary is a non-Portuguese tax resident company without a permanent establishment herein.

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Future disposals with redomiciled on-shore company (gift or inheritance of beneficial ownership in company)

The free transfer by gift or death of the beneficial ownership of afiduciary structure encompassing a Portuguese company (e.g.non-Portuguese resident share/quotaholders ormembers/partners are used at the level of the company and aforeign trust law and trustees are used) may not be territoriallyliable to GIT, even if the beneficiary is a Portuguese tax residentindividual, but this will depend on the type of fiduciary structure;otherwise exemption for close family / 10% rate applies.

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Future disposals with redomiciledon-shore company (sale of real estate)

PTT (up to a 6.5% rate), ST (0.8%) and CGT (21%, which may bereduced to 10.5% in case of qualifying reinvestment, plusMunicipal and State surcharges) are due if the disposal is madeby selling the real estate, and not the interest in the company. Anew tax evaluation of the immovable by the Portuguese TaxAuthorities may occur.

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Future disposals with redomiciledon-shore company (gift of real estate)

The free transfer by gift of Portuguese real estate :

– to an individual is liable to GIT (at a 10% rate) - plus a ST of 0.8%;

– to (i) a Portuguese or (ii) non-Portuguese tax resident company or (ii) to apermanent establishment in Portugal is liable to CIT [at a 21% rate, plusMunicipal and State surcharges in the cases (i) and (iii) and at a 25% rate incase (ii)];

and may give rise to a new tax evaluation of the immovable bythe Portuguese Tax Authorities.

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Crucial steps when redomiciling abroad or to Portugal

When redomiciling on-shore, the relevant corporate changes are notified tothe Portuguese Tax Office and the National Registry of Collective Persons as apart of the redomiciliation procedure.

After the redomiciliation abroad is completed, all the relevant corporatechanges should be notified to the Portuguese Tax Office and the NationalRegistry of Collective Persons.

After the redomiciliation abroad or on-shore is completed, all the relevant realestate changes should be notified to the Portuguese Tax Office and to theProperty Registry Office where the real estate is located.

Otherwise, the Portuguese Authorities will not be aware of the changes andwill still treat the real estate as owned by a blacklisted OFC.

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Costs and timeframe for notifications to the Portuguese Authorities

Lawyers’ fees for each notice (corporate changes with thePortuguese Tax Office and the National Registry of CollectivePersons, real estate changes to the Portuguese Tax Office and tothe Property Registry Office). Legal duties also apply.

Additional lawyers’ fees if the OFC is not redomiciling to Portugal,as a specific power of attorney by the OFC to the Portugueselawyer (either Hague apostilled or made in a Portugueseconsulate) has to be granted.

2 weeks.

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Costs and timeframe for other notifications

After the redomiciliation is completed, all the relevantcorporate and real estate changes should be notified tocontracting parties, namely utility providers (gas,electricity, water, phone, etc.).

Lawyers fees for each notice.

2 weeks.

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What to do now

Study the issue in detail: consider timeframe forimplementation, costs, risks, degree of sophistication.

Determine what you want:– Transfer the real estate by sale or gift;

– To redomicile on-shore [choose vehicle of redomicilation (Lda. or SA),think of cross redomiciliation, elect the accountant, as well as the headoffice of the Portuguese company (at the real estate or at a law office oraccounting firm, for instance), and determine if the existing (possiblynominee) share/quotaholders and / or directors will be kept or not)];

– To redomicile abroad (in this case choose jurisdiction).

Contact service providers (OFC management and/or local lawyerand/or local accountant) to see if they can help you implementthe desired structure.

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Implementation

That is the second phase. Good Luck!

But wait: there is still more!!!

(post-implementation, when the immediatePOT, CIT and PIT concerns have been dealtwith)

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In the future (transfer pricing)

The Portuguese Tax Authorities may challenge non--arm’s length situations where no rent is charged, evenby a non-blacklisted property holding company, eitherPortuguese or foreign. In theory they can do it already.In practice they have not.

Due to the APOT it is also convenient to have a lease sothat income generated for the lessor and the CIT on therent can absorb the APOT (i.e., APOT is creditableagainst the CIT on the rent).

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In the future (leasing)

Up to the end of December 2006, if the redomiciled company leased the real estateunder the controlled rent system it might obtain a POT exemption for 10 years (underthe rules of the estate tax reform).

Leasing may still be advantageous because:

– Negative – the CIT (21%, plus Municipal and State surcharges ) on the profit, and the one-offST of 10% on the value of the monthly rent of the lease contract.

– Positive – the fact that the rent expense is a tax deductible cost for the lessee:

• On a 15% basis (up to the limit of € 502, which will decrease between 2014 and 2017) on urbanproperty for permanent lodging of the lessee individual, for PIT purposes (the deduction will be fullyabolished starting from 1 January 2018);

• On a full basis, allowing 21% tax saving if the lessee is a profitable company (maximum CIT rate).

– Positive - there is a minimum CIT of € 1.000 for a Portuguese company or branch. The profitderived from leasing real estate is computed towards that minimum and enables itsabsorption or future recovery, and consists of:

• i) rent income less all relevant expenses, including financial expenditures, depreciation, furniture,decoration and appliances’ expenses - for the Portuguese domiciled lessor company;

• ii) rent income less all expenses effectively incurred and payed in order to obtain or maintain suchincome, excluding financial expenditures, depreciation, furniture, decoration and appliances’expenses - for the non-Portuguese domiciled lessor company.

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In the future (leasing - costs)

Portuguese lawyers’ costs for drafting the lease contract.

Portuguese annual fees for appointing a tax representativeto file statements and payments and receive notices(applicable only to non-residents established outside the EUand the EEA, in the latter case provided that an agreementfor the exchange of information is in place between Portugaland that state).

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Update of the tax value of real estate,namely for POT purposes

Should not be affected by the redomiciliation per se.

No possible tax planning here.

Since 2012, due to IMF / ECB / EC Memorandum of Agreementwith the Portuguese State, there was a specific evaluation of allurban property in Portugal.

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Grand finale

My very, very, personal opinion - what I would do if I were in this situation (although Iam not). I would redomicile:

– to the US, using an LLC in Oregon [less known than Delaware, Wyoming or Oklahoma andtherefore with reduced risk of blacklisting, and allowing domestication or transfer of domicile to aforeign (non-US) jurisdiction, say Portugal], as it is inexpensive, relatively safe, and should be easyto implement and also to accept by existing management companies fearful of loosing theirclients; however compliance costs may rise due to the need to annually file a Report of ForeignBank and Financial Accounts - FBAR (risk prone / cost tolerant / no-fight situation).

– to the UK, using a LLP, which is safe due to the protection of both EU law and the UK-Portugal taxtreaty non-discrimination clause and should be easy to implement and also to accept by existingmanagement companies fearful of loosing their clients (risk prone / cost sensitive / no-fightsituation).

– to Malta, because it is safer than the US LLC, and should be easy to implement and also to acceptby existing management companies fearful of loosing their clients, although this is more costlyand will require constant monitoring in tax and legal developments (risk adverse / cost tolerant /no-fight situation).

– to Portugal, as, although expensive and more difficult to implement, it is much safer, even if it isnecessary to convince the management companies to do away with nominee share/quotaholdersor members and/or directors (risk adverse / cost tolerant / some-fight situation).

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Tax wisdom (closing)

We should be proud of paying real estate taxation inPortugal.

The only thing is that we could be just as proud for halfthe money.

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Real Estate Tax Planning in Portugal

Proper legal advice is recommended before any decision is

taken on this subject. RPBA has an in-depth knowledge

and expertise on real estate taxation.

Should you require further information on this issue, want

to book a consultation or obtain our professional fees on

this subject please e-mail us (Bruno Botelho Antunes):

bruno@rpba.pt

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Recent Tax Recognition

Chambers & Partners – Ricardo Band 2 / RPBA Band 3 (2016) and Ricardo Band 1 / RPBA Band 3 (2015 / 2014 / 2013)

Legal 500 – Ricardo and Bruno are Recommended Lawyers / RPBA Band 3 (2016 / 2015 / 2014 / 2013)

World Tax – Ricardo mentioned / RPBA Tier 3 (2017 / 2016 / 2015 / 2014)

Best Lawyers – Ricardo recognised as "Tax Law Lawyer of the Year” (2017) and ranked under the "Tax Law" practice area and the "Tax

Planning" subspecialty (2016 / 2015 / 2014 / 2013 / 2012 / 2011)

Corporate LiveWire - Ricardo da Palma Borges chosen as the winner of the Finance Award for Tax Lawyer of the Year – Portugal

(2017) / Ricardo da Palma Borges chosen as the winner of the Finance Award for Excellence in Tax Planning – Portugal (2016)

World Transfer Pricing – Ricardo mentioned / RPBA Tier 3 (2016)

Who´s Who Legal – Ricardo ranked as a top lawyer in the Corporate Tax Lawyers directory (2016 / 2013)

Expert Guides – Ricardo da Palma Borges recognised in the “Tax” edition of the Expert Guides, which annually identifies the best tax

lawyers in each country (2016)

Global Law Experts - RPBA Tax Law Firm of the Year in Portugal (2016)

Tax Directors Handbook – Ricardo mentioned / RPBA Tier 3 (2015)

Corporate Intl - RPBA Boutique Tax Law Firm of the Year in Portugal (2016)

Corporate Intl Magazine Legal Award – RPBA Boutique Tax Law Firm of the Year in Portugal (2014)

Acquisition International Tax Award – RPBA Portuguese Tax Law Boutique Firm of the Year (2015)

Acquisition International Legal Award – RPBA Boutique Law Firm of the Year – Portugal (2014)80

General warning, disclaimer, copyrightand authorised use

In the preparation of this presentation, every effort has been made to offer current, correct and clearlyexpressed information. However, the said information is intended to afford general guidelines only. Thispresentation reflects information current at March 16, 2017.

This presentation is distributed with the understanding that RICARDO da PALMA BORGES & ASSOCIADOS,SOCIEDADE DE ADVOGADOS, S.P., R.L. is not responsible for the result of any actions taken on the basis ofinformation herein included, nor for any errors or omissions contained herein.

RICARDO da PALMA BORGES & ASSOCIADOS, SOCIEDADE DE ADVOGADOS, S.P., R.L. is not attemptingthrough this work to render legal or tax advice and the information in this presentation should be used as aresearch tool only, and not in lieu of individual professional study with respect to client legal matters.

Portuguese domestic legislation, foreign legislation, EU Directives and tax treaties have anti-abuseprovisions, and each actual client structure should be analysed taking those into account.

RICARDO da PALMA BORGES & ASSOCIADOS, SOCIEDADE DE ADVOGADOS, S.P., R.L. is the copyright ownerof this presentation and hereby grants you a non-exclusive, non-transferable license to use this presentationsolely for your internal business, provided that you do not modify its content in any way and that you do notretain any copyright or other proprietary notices displayed on such content. You may not otherwisereproduce, modify, distribute, transmit, post or disclose the content on this presentation without RICARDOda PALMA BORGES & ASSOCIADOS, SOCIEDADE DE ADVOGADOS, S.P., R.L.’s prior written consent.

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