Portuguese government imposes 15% minimum tax on large multinationals

Portugal’s government is moving ahead with a minimum 15% taxation mechanism for multinational and national groups, according to the package of measures approved at Thursday’s cabinet meeting.

This is one of the 60 measures in the government’s package to boost the Portuguese economy, but it is also the implementation of a EU directive on minimum taxation of the profits of multinational companies and large national groups.

Portugal has been late in implementing the directive, and the European Commission has launched infringement proceedings.

As Finance Minister Joaquim Miranda Sarmento pointed out at the press conference following the cabinet meeting, the implementation “should have been done by the end of 2022. It’s already a year and a half late”.

As a result, the government is “doing something that the Portuguese state should have already done and requiring multinationals to pay the fair minimum of their taxes,” he added.

EU legislation came into force on 1 January to introduce a minimum effective tax rate of 15% for large companies operating in EU member states, covering multinationals and large national groups with combined financial income of more than €750 million a year.

The EU directive followed the global agreement reached by the G20 and the OECD and aims to create “greater fairness and stability in the tax landscape in the EU and globally by limiting the race to the bottom in corporate tax rates and reducing the incentive for companies to shift profits to low-tax jurisdictions”, as the European Commission signalled when it approved the directive.

(Mariana Espirito Santo,Lusa.pt)

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