Ministerial Order no. 268/2021, approved on 26 November 2021, introduced relevant changes to Portuguese regulations on TP matters by revising the formerly applicable Ministerial Order no. 1446-C/2001 which had been in force for 20 years.
The new Ministerial order has been effective since its publication (27 November 2021) and, in connection with TP documentation, is applicable for tax periods beginning 1 January 2021 or after.
In general, the new legislative options reflect the international TP policy changes of the last few decades as per the revised OECD Guidelines on TP matters, as well as the EU Joint Transfer Pricing Forum, which translates into additional proximity between the Portuguese TP legal framework and the regulations in place in most of the OECD jurisdictions.
The most impactful changes approved in the new Ministerial Order that should be considered are the following:
Moreover, Ministerial Order no. 267/2021 was also published on 26 November 2021 and revises and updates the previous regulations applicable to the conclusion of APAs between companies and the Portuguese Tax Authorities. The new legislation updates the validity of APAs to four years, as was already established in the Portuguese CIT Code, and provides other clarifications based on the experience of the last years.
In a nutshell, we take the view that the aim of the changes introduced was to simplify the Portuguese reporting TP obligations imposed on companies and to provide greater legal certainty to the regimes under analysis.
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