Amendments to the Advance Pricing Agreements
EA BriefFiscalTax
30 November, 2021Order no. 268/2021, of 26 November was published, which revises the regulation of the procedures to enter into advance pricing agreements (APA), under article 138 of the Corporate Income Tax Code (CIT) Code.
This revision implements the changes already introduced in article 138 of the CIT Code, regarding the maximum term of validity of an APA, which is now 4 years and, on the other hand, it defines more clearly the several stages of the process of its execution.
Bilateral or multilateral agreements may only be concluded with States with which Portugal has concluded a tax treaty that includes a mutual agreement procedure provision, as provided for in Article 25(3) of the OECD Model Tax Convention or in Article 16 of the Multilateral Convention for the Modernization of Tax Treaties. The negotiation process for such agreements includes a phase of consultations between the tax authorities of the countries involved, carried out under that procedure.
We also highlight the following changes:
- The request for a preliminary assessment will have to be submitted in writing no later than 3 months before the deadline for submission of the proposed agreement;
- The maximum term of the APA is now 4 years;
- The agreement may cover tax periods for which the taxpayer has already submitted the periodic tax return (Mod. 22), provided that the relevant facts and circumstances verified in these periods are identical or similar and that no more than two years have elapsed since the deadline for submission of the respective tax return at the time of conclusion of the agreement.
- The monitoring and verification of compliance of the APPT will now be the responsibility of the Large Taxpayers Unit (“UGC”).
