Inheritance tax in Portugal
In 2003, the Inheritance and Gift Tax Act ( Imposto sobre as Sucessões e Doações ) was abolished in Portugal with effect from January 1, 2004. At the same time, the existing Stamp Duty Act ( Código do Imposto de Selo, CIS ) was expanded to include free dispositions of property, which is now the sole basis for taxing unpaid acquisitions in the event of death or through gifts.
Stamp duty
The stamp duty has a long tradition in Portugal and is levied on a wide variety of legal incidents in everyday life, such as documents, contracts, financings, games, all of which are recorded in a general table with the applicable rate. This can be from 0.05% to 25%, in some cases fixed euro amounts are also given. These legal incidents were now also assigned to the free dispositions of death or gifts.
Free acquisition
Acquisitions due to death or gifts are subject to a 10% stamp duty. This only includes transfer processes that relate to goods ( bens ) located in Portugal (Art. 4 CIS). The items belonging to these goods are listed individually in Art. 1 No. 3 CIS and, in addition to land and buildings, only include movable items if they are entered in public registers (motor vehicles are entered in a vehicle register in Portugal). The goods also include: equity and financial assets, company shares, businesses, intangible property rights and the like. According to the type of tax, it does not extend to foreign assets.
Exemptions
Legal transactions between spouses or partners who have actually lived together for more than two years (in what is known as a união de facto - factual community, regardless of whether they are of different or same sex) and with descendants (children, grandchildren, etc.) and relatives of the ascending line (parents, grandparents etc.) are generally exempt from stamp duty (Art. 6 lit. 3 CIS). From this it follows that the stamp duty of 10% is not levied on inheritance or gift transfers between members of the named group of people. Other relatives as well as third parties are subject to stamp duty.
completion
In the event of an inheritance, the stamp tax is owed by the estate administrator ( Cabeça-de-Casal , literally translated as head of household , some also translated as inheritance administrator ) for the entire estate. Who is Cabeça de Casal is regulated by the law: first the surviving spouse, then an appointed executor, the legal heirs, the testamentary heirs, within a group of those closest to the testator, otherwise the eldest (Art. 2080 Código Civil). The administrator of the estate and each beneficiary is obliged to report the death to the responsible tax office and to provide the information specified in the form (which is already possible online today). The notification must be made by the end of the third month following the inheritance or transfer. The tax lapses eight years from the date of inheritance or transfer. For their payment from a total amount of 1000 euros, payment of up to ten monthly installments is generally approved.
Notification requirement for gifts
Subsequently, an obligation to notify was introduced for gifts over 500 euros for everyone, including those who are actually exempt from stamp tax. The reason for this was the evasion of the Portuguese capital appreciation tax on real estate. Since every change of ownership under Portuguese law triggers a new valuation of the property for tax purposes, the practice quickly established itself after the abolition of the gift tax that the owner gave the property to a close relative who was exempt from stamp duty before the intended sale of a property. As a result of this legal transaction, the property has now been promptly valued by the tax offices. In the subsequent sale of the property to a third party by the recipient of the gift, the increase in value tax is calculated based on the difference between the purchase price and the new, real-time taxable property value, so that there was hardly any taxable increase in value. In order to curb this development, a general obligation to notify gifts of all kinds and a holding period of two years for property donations were introduced.
Credit against the German inheritance tax
Due to the territoriality principle of the Portuguese stamp duty, a double tax burden can only arise if the purchaser is subject to general German tax liability and also in Germany the property acquired in Portugal due to death has to be taxed under inheritance tax law. Section 21 ErbStG provides that a foreign tax paid abroad for assets located there, which corresponds to the German inheritance tax, can be offset against the German inheritance tax due for the same acquisition. This is based on the reason for the foreign tax collection, which in the case of the Portuguese stamp tax is also triggered by the death of the testator and the transfer of his assets to the heir, so that the tax is comparable despite the different overall context.
outlook
Since the abolition of inheritance and gift taxes, their reintroduction has been discussed and demanded again and again at the political level, so that their abolition could not yet become a normal political reality.
See also
Individual evidence
- ↑ ( page no longer available , search in web archives: taxes on land acquisition )
- ↑ Geral do Imposto do Selo ( Memento from September 13, 2012 in the web archive archive.today )
- ↑ BFH March 6, 1990 BStBl. 1990II 786
literature
- Erhard Huzel, Burckhardt Löber, Ines Wollmann: Inheriting and inheriting in Portugal , Edition for international economics, Frankfurt / Main 2009, ISBN 978-3-921326-58-9 , pages 122ff.
