Post by Silva Branco on Mar 13, 2009 8:54:00 GMT 4
Portugal: Special tax credit for qualified investments in 2009
The Portuguese parliament recently approved a budget supplement law that establishes the investment tax regime for qualified investments made in 2009 (RFAI 2009). Among other tax incentives, RFAI includes a new tax credit (up to 25% of the tax due) equal to 20% (for investments below €5,000,000 ($6,500,000) or 10% (for investments above €5,000,000) of the investments made during this year, which may be carried forward for four years. In addition, RFAI also includes an exemption on real estate transfer tax (IMT), property tax (IMI), and stamp tax on the acquisition of real estate for the purposes of the qualified investments.
Under the RFAI 2009, the following investments are eligible for the tax incentives:
* new tangible assets, not including land (except when used for resource extraction), buildings (except when used for factories or administrative offices), non-commercial vehicles and other assets that are not directly connected with the activity developed; and
* intangible assets that qualify as expenses with transfer of technology through the acquisition of patent rights, licenses, know-how, or unpatented technical knowledge; for large companies the investments in intangible fixed assets may not exceed 50% of the qualified investment.
Eligible investments must be designed to promote the creation of employment during 2009 and should be maintained for a five-year period subject to a recapture rule.
Finally, it is important to stress that RFAI 2009 is limited to taxpayers engaged in the sectors of agriculture, forestry, agro industries, energy, tourism, and manufacturing or extraction industries (except steelwork industries, shipbuilding, and synthetic fibres as defined in article 2 of Commission Regulation 800/2008). The tax incentive is also extended to companies realising investments in next-generation broadband equipment, which is deemed to stimulate the growth on this important technology sector of the Portuguese economy.
Fernando Castro Silva (fernando.castro.silva@garrigues.com) and André Pappamikail Branco (andre.pappamikail.branco@garrigues.com)
The Portuguese parliament recently approved a budget supplement law that establishes the investment tax regime for qualified investments made in 2009 (RFAI 2009). Among other tax incentives, RFAI includes a new tax credit (up to 25% of the tax due) equal to 20% (for investments below €5,000,000 ($6,500,000) or 10% (for investments above €5,000,000) of the investments made during this year, which may be carried forward for four years. In addition, RFAI also includes an exemption on real estate transfer tax (IMT), property tax (IMI), and stamp tax on the acquisition of real estate for the purposes of the qualified investments.
Under the RFAI 2009, the following investments are eligible for the tax incentives:
* new tangible assets, not including land (except when used for resource extraction), buildings (except when used for factories or administrative offices), non-commercial vehicles and other assets that are not directly connected with the activity developed; and
* intangible assets that qualify as expenses with transfer of technology through the acquisition of patent rights, licenses, know-how, or unpatented technical knowledge; for large companies the investments in intangible fixed assets may not exceed 50% of the qualified investment.
Eligible investments must be designed to promote the creation of employment during 2009 and should be maintained for a five-year period subject to a recapture rule.
Finally, it is important to stress that RFAI 2009 is limited to taxpayers engaged in the sectors of agriculture, forestry, agro industries, energy, tourism, and manufacturing or extraction industries (except steelwork industries, shipbuilding, and synthetic fibres as defined in article 2 of Commission Regulation 800/2008). The tax incentive is also extended to companies realising investments in next-generation broadband equipment, which is deemed to stimulate the growth on this important technology sector of the Portuguese economy.
Fernando Castro Silva (fernando.castro.silva@garrigues.com) and André Pappamikail Branco (andre.pappamikail.branco@garrigues.com)