Australia: Tax treaty with Portugal signed

Will represent the first tax treaty between the two nations following its entry into force

Will represent the first tax treaty between the two nations following its entry into force

Australia’s Department of the Treasury issued a release announcing that officials from Australia and Portugal on 30 November 2023 signed a new tax treaty, which will represent the first tax treaty between the two nations following its entry into force.

According to Treasury, some of the main features of the new treaty with Portugal include:  

  • Tax certainty and the alleviation of double taxation by determining the allocation of profits between Australia and Portugal from cross-border dealings
  • Lower withholding tax rates on dividends and interest with a reduction by at least 15% for Australian businesses investing in Portugal (down from Portugal’s current 25% rate)
  • Lower withholding tax rates on royalties at a rate of 10%, which is a 20% reduction from Australia’s default 30% royalty withholding tax rate
  • Protection over natural resources by preserving Australia’s source country taxing rights over income from natural resources, including the operation of substantial equipment
  • Tax certainty for pensions by ensuring that non‑government periodic pension payments (superannuation) will be taxed only in the recipient’s country of residence
  • Prevention of multinational tax avoidance by incorporating integrity provisions consistent with the outcomes of the G20/OECD Base Erosion and Profit Shifting (BEPS) project
  • Rules relating to the exchange of taxpayer information to ensure its consistency with Australia’s existing policies and international obligations



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