Portugal has enacted a global minimum tax regime aligned with the OECD’s Pillar II initiative through Law no. 41/2024 of 8 November. This framework introduces the Global Minimum Tax Regime (RIMG) for multinational and large national groups with a consolidated turnover of €750 million or more in two of the last four tax periods. The regime ensures a minimum 15% effective tax rate per jurisdiction, reflecting Portugal’s commitment to combating profit shifting and tax base erosion.
The RIMG operates through three mechanisms: (i) The Income Inclusion Rule (IIR) ensures the ultimate parent entity collects complementary tax if subsidiaries have an effective tax rate under 15%. It applies at the parent company’s jurisdiction level. If the parent company is in a country without an IIR, the (ii) Undertaxed Payments Rule (UTPR) may allocate the residual additional tax to another jurisdiction where the group operates, assuming those jurisdictions have the UTPR rule, as in Portugal. Additionally, (iii) the Qualified Domestic Top-Up Tax (Imposto Complementar Nacional Qualificado, ICNQ-PT) which, in accordance with OECD rules, is applied prior to the IIR and the UTPR, ensures that top-up taxation is first allocated to the jurisdiction where the low-taxed income arises.
The RIMG includes a de minimis exclusion, exempting jurisdictions where: (i) the average admissible income is less than €10 million; and (ii) the average admissible net income does not reach 1 million euros. Exemptions also apply to entities such as public bodies, pension funds and qualifying investment vehicles. The regime offers a de minimis exclusion for low-revenue jurisdictions and temporary relief for newly expanded groups in six or fewer jurisdictions.
Special rules in line with the OECD GloBE Model Rules allow for the exclusion of profits and losses from international shipping, provided the strategic and commercial management of the ships is carried out in Portugal. This exclusion does not apply to inland waterway transport within a single jurisdiction.
The European Union has adopted the DAC 9 Directive, requiring implementation of a supplementary tax return, to ensure the automatic exchange of information on the effective tax rate and top-up tax computations. Portugal must transpose the Directive into domestic law by 31 December 2025, with first reports due by 30 June 2026.
Non-compliance with the RIMG results in fines from €5,000 to €100,000, plus daily penalties. Transitional relief from penalties is available for entities acting in good faith during the initial implementation years.
OECD Administrative Guidance clarifies the treatment of deferred tax assets, which could be relevant under Portuguese tax rules, and of qualified refundable tax credits, which would in principle have limited application in Portugal under the current tax incentives framework. The guidance also lists jurisdictions whose transitional legislation qualifies under the GloBE framework. The United States’ withdrawal from the global tax agreement raises questions about these rules in cross-border structures, including the regime’s interaction with Bilateral Investment Treaties and M&A transactions.
Companies operating in or through Portugal should assess their structures and alignment with the regime.
Authors : Rogério Fernandes Ferreira, Álvaro Silveira de Meneses & Romy Afredo Bouery, www.rfflawyers.com
