The Government has signed a new tax treaty with Portugal, representing the first tax treaty between the two nations.
Once in force, the treaty will enhance trade and investment opportunities between Australia and Portugal by creating a more favourable regulatory environment.
The treaty will give Australian businesses new opportunities to access Portuguese capital through reduced withholding tax rates. This will lower costs for Australians investing in Portugal and will improve access to Portuguese technology by reducing the tax rate applied to intellectual property.
The treaty will also reduce compliance costs for taxpayers and improve certainty for businesses that have dealings between Australia and Portugal.
The treaty will play an important role in supporting the Government’s commitment to Ensure that Multinationals Pay Their Fair Share of Tax by establishing strong cooperative links between Australia and Portugal and is line with OECD and G20 recommendations designed to reduce profit shifting.
Once both countries have completed their domestic implementation requirements, the treaty will enter into force.
A summary of the main features of the new treaty is available on the Treasury website.