- The calculation of taxable profit for OIC is done by calculating the net profit for the year, which results from the application of legally applied accounting methods;
- The benefit is that the following income does not contribute to taxable profit: capital income; property income and capital gains, except income from entities resident or fiscally domiciled in a country, territory or region with a more favorable tax regime;
- Income (including discounts) and costs related to management fees and other commissions that revert to OIC, as well as non-deductible costs according to the Corporate Income Tax (IRC) Code are also not considered;
- The rules of the IRC Code regarding reporting of tax losses, the fiscal neutrality regime, and most ancillary obligations are applicable, with the necessary adaptations;
- OIC are also exempt from municipal and state business tax, but are liable to autonomous taxation at the rates laid down in the IRC Code;
- The net asset value the OIC is subject to IS on a quarterly basis, by reference to the last day of March, June, September and December of each year;;
- The following rates shall apply: i) 0.0025% - in the event that the OIC invests exclusively in money market instruments and deposits; and ii) 0.0125% for all other OIC.
OIC Participants’ income:
- Taxation of income from shareholding in OIC varies depending on the respective fiscal residence and the nature of taxable persons (i.e., whether they are individual or collective persons);
- If the holders of distributed income are IRS taxable persons residing in Portuguese territory, the income is subject to withholding tax at the rate of 28%, having a definitive character when the income is obtained outside a commercial, industrial or agricultural activity (not jeopardizing the possibility of opting for the aggregation of income);
- Income arising from the redemption of investment units not associated with a commercial, industrial or agricultural activity is subject to a definitive withholding tax rate of 28%;
- If the owners are corporate bodies resident in Portuguese or if the income is attributable to a permanent establishment therein, income distributed by the OIC is taxed by withholding tax at a rate of 25%, having the nature of tax on account;
- If the owners of the distributed income are non-resident taxpayers, who do not have a permanent establishment in Portugal:
- Income from real estate investment funds or real estate investment companies – subject to a definitive withholding tax rate of 10%, when the income is obtained from redemption of investment units;
- Autonomously at a rate of 10% in other situations, as long as the person receiving the income is not a resident in a country or region with a clearly mor favourable tax regime.
- Income from securities investment funds or securities investment companies, including capital gains from redemption or liquidation, whose holders are not residents in Portuguese territory without stable establishment generating the income, such - income is exempt from IRS or IRC, as long as the beneficiary of the income is not a resident in a country, territory or region subject to a clearly more favourable tax regime.
Requirements
- To take the form of one of the following entities: securities investment funds, real estate investment funds, securities investment companies and real estate investment companies which are incorporated and operate according to national law;
- The holder of the income is not resident in a country, territory or region subject to a clearly more favourable tax regime.