Portugal is not going to increase taxes

05.10.2011

Portugal is one of European states which most of all felt negative effect of the crisis. Not long time ago the country caused dangerous thoughts in EU because of its position and required relative support like financial investments. In 2011 Portugal like many other states in the crisis situation increased tax rates (in 2011 corporate tax rate in the country is about 25%), introduced new taxes (e.g. additional tax on annual awards), increased utility bills tariffs. However today the country's finance minister declares that such strict measures are no longer required and there will be no further tax increase. Ministers believe that the state budget deficit will be reduced with the new temporary measures not have been fixed yet at normative level but which exactly don’t include the mechanisms of taxation.

Expert’s opinion

“Level of Portugal tax appeal is not high at this moment. The only tax haven here that can be considered as an autonomous region is Madeira where the corporate tax rate is 10% and 20% depending on annual turnover. In general in Portugal big enough tax rates, unstable political and economic situation, all that doesn’t have a positive effect on the growth of investment flows. Of course the trend of not increase tax rates in the country for subsequent periods can be characterized as positive, but for interest growth from foreign investors it is necessary to provide any incentives. Perhaps the deputies will include certain mechanisms that improve the quality of the tax appeal for the international business in a package of measures to restore the state”.

On the basis: www.taxpravo.ru

Andrianova Irina ( the lawyer of international consulting department of “Honest & Bright”)