Higher Municipal Taxes for Blacklisted Companies
In 2002 a ‘blacklist’ of countries with a more favourable tax regime was issued by the Portuguese Ministry of Finances.
As a result, anyone with a property held by a company whose jurisdiction was in one of the blacklisted countries, had to pay higher property taxes than someone with the property in their own name or in a company registered in a non-blacklisted jurisdiction. The tax rate for these companies has risen from 2% in 2002 to 7.5% currently charged which compared to a maximum of 0.5% tax rate for individuals is a hefty difference!
Consequently since 2002 the majority of corporate owners re-domiciled their companies to a safe ‘white’ jurisdiction such as Delaware or Malta. These companies continue to have all the advantages of corporate ownership and pay the same IMI property taxes as individual owners.
With the automatic revaluation of many property tax values during 2012/2013, anyone who still owns a property in a ‘blacklisted company’ has been shocked to receive an IMI property tax bill for thousands of euros.
The re-domiciliation process can be lengthy and if you still have a property in one of the ‘blacklisted’ jurisdictions proceedings to re-domicile should start now for completion before the end of the year and so avoid the higher tax rates in the future.
Contact Sovereign for more information on how they can help.
Sovereign - Consultoria Lda
Parque Empresarial Algarve
Tel: +351 282 340480
Fax: +351 282 342259
Whilst every effort has been made to ensure that the details contained herein are correct and up-to-date, this information does not constitute legal or other professional advice. We do not accept any responsibility, legal or otherwise, for any error or omission.