Doing business in Europe: Portugal

Article Abstract:

Firms interested in doing business in Portugal need to understand that the company structure in Portugal is divided into general and limited partnerships. There are two types of corporation, the Sociedade Anonyma (SA), which corresponds to a public company, and a Sociedade por Quotas (SpQ), a less formal organization. The management of an SA is in the hands of a board of directors, and SAs and larger SpQs must prepare financial statements and management reports by March 31 for the previous calendar year. Resident companies must pay a corporate income tax of 36.5% on income and capital, as well as a capital gains tax of 12% on fixed assets and six percent on stock dividends distributions. Personal income tax is a progressive tax of from 16-40% and is based on nine sources, including: independent services, trade and industry, and capital gains. Non-residents must appoint a resident to keep appropriate records and to liaison with Portuguese tax authorities.

Accounting, Portugal, Taxation

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Doing business in Europe: Luxembourg

Article Abstract:

Non-resident corporations in Luxembourg normally are taxed on Luxembourg income on a similar basis as resident Luxembourger corporations when the income is related to a permanent establishment. There is no withholding tax on distributions from Luxembourg source income by non-resident companies. Taxable income arises under one of eight different areas, including: trade or business; independent personal services; and salaries and benefits in kind. Computations of business income take into account unrealized losses but not unrealized profits. Other taxes corporations are liable for include the municipal business tax, the real property tax, and a one percent stamp duty. The income tax rates are progressive and range from 10% to 56%.

Luxembourg

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