Answer ... Final corporate tax is due upon the filing of the tax return by the end of May of the following year.
Resident corporate taxpayers are also obliged to file a simplified annual statement of corporate information, which must be filed electronically by 15 July of the following year. Apart from the final payment made with the tax return, and apart from withholding taxes on account of the final tax due which may also apply to certain transactions, companies are subject to payments on account of the final tax due, to be made in three instalments (July, September and 15 December of the relevant tax year, starting 1 January and ending 31 December), corresponding to 95% (if turnover in the previous year was higher than €500,000) or 80% (if turnover in the previous year was equal to or less than €500,000) of the tax assessed in the previous year net of withholding taxes.
Corporate taxpayers may also be subject to special payments on account (in one instalment payable in March, or in two instalments payable in March and October), as well as to additional payments on account (under a surcharge tax) which are due by entities that are subject to the regime of both payments on account and special payments on account and that reported a taxable profit exceeding €1.5 million in the previous tax year.
Answer ... There are several tax penalties for non-compliance, at corporate and executive level, including the following (assuming that the non-compliance resulted from mere negligence; in the case of wilful misconduct, it may qualify as a crime):
- failure to file a statement of commencement of, change in or cessation of activities (for corporate income tax (CIT) and value added tax (VAT) purposes) - a fine of between €600 and €15,000;
- failure to file a tax return or late filing of a tax return (including CIT and VAT returns) - a fine of between €300 and €7,500;
- failure to pay or late payment of tax due (including VAT, withholding tax, payment on account, special payment on account, additional payment on account) – a fine of between 30% and 100% of the tax due, up to a specified limit (€45,000 for negligence);
- omissions or inaccuracies in tax filings in general (that do not amount to tax fraud, which is subject to criminal proceedings) - a fine of between €750 and €45,000;
- omissions or inaccuracies regarding acts, facts or documents which are relevant for the analysis of urgent binding ruling requests - a fine of between €750 and €45,000;
- omissions or inaccuracies regarding acts, facts or documents which are relevant for the analysis of non-urgent binding ruling requests - a fine of between €187.50 and €11,250;
- failure to file transfer pricing documentation by the legal deadline - a fine of between €1,000 and €20,000, increased by 5% for each day of delay; and
- failure to file, by the deadline established by the tax authorities, the financial and tax reporting statement per country (‘country-by-country reporting’) or jurisdiction in respect of the entities of a multinational group – a fine of between €1,000 and €20,000, increased by 5% for each day of delay.
Penalty reductions may apply if the taxpayer voluntarily complies and there may be subsidiary liability for executives.
Answer ... Portugal’s adherence to the automatic exchange of information under country-by-country reporting has ultimately resulted in the approval and publication of specific forms through Ordinance 367/2017 and Ordinance 383-A/2017, in order to implement the obligations foreseen in the Portuguese CIT Code (as amended by Decree-Law 98/2017), further to the Organisation for Economic Co-operation and Development recommendations under Base Erosion and Profit Shifting Action 5 and EU Directive 2016/881.
As such, each ultimate parent entity or other reporting entity of a group that registers a consolidated turnover of over €750 million must complete and file a country-by-country report. In this respect, Portuguese law foresees that each group member that is resident or has a permanent establishment in the Portuguese territory must communicate electronically to the tax authorities (through Form 54) which entity constitutes the reporting entity of the group, the respective tax jurisdiction and its tax identification number and address. This form must be filed by the end of May of the following tax year. The country-by-country reporting obligation is fulfilled by filing Form 55 in the 12 months following the last day of the financial statement of the reporting multinational company.