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Tax Amnesty Gives Portugal Revenue Boost

by Ulrika Lomas, Tax-News.com, Brussels

20 August 2012


Portugal's recently-completed tax amnesty campaign appears to have been one of the most successful ever, according to published figures.

Amid an urgent need additional tax revenue, Portugal has recently proceeded to a third tax amnesty campaign (RERT III). This allowed individuals with undeclared foreign income to repatriate funds to Portugal free from penalties and interest in return for paying a 7.5% withholding tax on the funds. Under the amnesty's previous incarnations, RERT I and RERT II, the final withholding tax was 2.5% and 5% respectively.

An estimated EUR3.4bn (USD4.2bn) was returned to Portugal under the scheme, resulting in exceptional tax revenue of EUR258m for the Portuguese government. By way of comparison, RERT I had yielded EUR43m and RERT II EUR83m.

Portugal has intended to send a message through the latest amnesty programme that, with a higher rate of withholding for repatriated funds, it has become more aggressive than it used to be when it comes to cracking down on offshore tax evasion.

Paulo Núncio, State Secretary for Fiscal Affairs, has confirmed that no further tax amnesties are planned before at least the end of the current legislature.

TAGS: tax | Portugal | tax avoidance | interest | offshore | withholding tax | penalties

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