Portugal: Guidance concerning advance pricing agreements, transfer pricing documentation

Guidance from Portugal addresses certain measures under the transfer pricing regime

Guidance from Portugal addresses certain measures under the transfer pricing regime

Two ministerial orders provide guidance and address certain measures under the transfer pricing regime in Portugal.

APA guidance

Ministerial Order no. 267/2021 (26 November 2021) updates the rules for the process and procedures applicable for advance pricing agreements (APAs).

The measures in this ministerial order:

  • Clarify certain stages of the APA process
  • Address the possibility of concluding an APA covering earlier tax periods—such APAs may be allowed, provided that the annual corporate income tax return has been filed, and that no more than two years have elapsed since the return’s due date (among other conditions)

Transfer pricing documentation, arm’s length principle

Ministerial Order no. 268/2021 (26 November 2021) reviews the regulatory framework of the transfer pricing regime, and revokes Ministerial Order no. 1446-C/2001 (21 December 2001).

In particular, the 2021 ministerial order:

  • Reflects OECD and the EU Joint Transfer Pricing Forum projects regarding application of the arm's length principle
  • Amends and relaxes the criteria regarding taxpayers required to prepare transfer pricing documentation
  • Adopts the structure for transfer pricing documentation in accordance with Action 13 of the base erosion and profit shifting (BEPS) project
  • Establishes measures to simplify the transfer pricing documentation requirements for small and medium-sized companies, subject to certain requirements

The transfer pricing documentation changes are effective for tax periods beginning on or after 1 January 2021.

Read a November 2021 report (Portuguese and English) [PDF 197 KB] prepared by the KPMG member firm in Portugal


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