Resolução da Assembleia da República n.º 206-A/2025 — Aprova a Convenção entre a República Portuguesa e o Reino Unido da Grã-Bretanha e Irlanda do Norte para Eliminar a…

3 - Caso a autoridade competente de um Estado Contratante não designe um membro da comissão arbitral nos termos e prazos estipulados no n.º 2 ou acordados pelas autoridades competentes dos Estados Contratantes, esse membro é designado, em nome dessa autoridade competente, pelo funcionário de escalão mais elevado do Centro de Política e Administração Fiscal da Organização para a Cooperação e Desenvolvimento Económico que não seja nacional de nenhum dos Estados Contratantes.

4 - Caso os dois membros iniciais da comissão arbitral não nomeiem o presidente nos termos e prazos estipulados no n.º 2 ou acordados pelas autoridades competentes dos Estados Contratantes, o presidente é nomeado pelo funcionário de escalão mais elevado do Centro de Política e Administração Fiscal da Organização para a Cooperação e Desenvolvimento Económico que não seja nacional de nenhum dos Estados Contratantes.

PARTE III — CONFIDENCIALIDADE DO PROCEDIMENTO ARBITRAL

1 - Unicamente para efeitos da aplicação das disposições do presente Protocolo e das disposições da Convenção e da legislação interna dos Estados Contratantes relativas à troca de informações, à confidencialidade e à assistência administrativa, os membros da comissão arbitral e um máximo de três colaboradores por cada membro (e os candidatos a árbitros unicamente na medida necessária a verificar a sua capacidade para satisfazer os requisitos necessários para exercer a função de árbitro) devem ser considerados como pessoas ou autoridades às quais podem ser comunicadas informações. As informações recebidas pela comissão arbitral ou pelos candidatos a árbitros e as informações que as autoridades competentes recebam da comissão arbitral são consideradas como informações trocadas ao abrigo das disposições da Convenção relativas à troca de informações e à assistência administrativa.

2 - As autoridades competentes dos Estados Contratantes devem assegurar que os membros da comissão arbitral e os seus colaboradores, anteriormente à sua participação num procedimento arbitral, aceitam, por escrito, tratar todas as informações relacionadas com o procedimento arbitral em conformidade com as obrigações de confidencialidade e de não divulgação previstas nas disposições da Convenção relativas à troca de informações e à assistência administrativa e de acordo com a legislação aplicável dos Estados Contratantes.

PARTE IV — RESOLUÇÃO DE UM CASO ANTES DA CONCLUSÃO DA ARBITRAGEM

Para efeitos do presente Protocolo e das disposições da Convenção que prevejam a resolução de casos no quadro do procedimento amigável, o procedimento amigável assim como o procedimento arbitral respeitante a um caso é encerrado se, em qualquer momento posterior à apresentação de um pedido de arbitragem e anterior à comunicação da decisão da comissão arbitral às autoridades competentes dos Estados Contratantes:

PARTE V — MÉTODO DE ARBITRAGEM

1 - Salvo na medida em que as autoridades competentes dos Estados Contratantes acordem entre si regras diferentes, as seguintes disposições aplicam-se a um procedimento arbitral:

2 - Anteriormente ao início do procedimento arbitral, as autoridades competentes dos Estados Contratantes devem assegurar que cada uma das pessoas que apresentou o caso, assim como os seus consultores, aceitam, por escrito, não divulgar, a qualquer outra pessoa, qualquer informação que recebam de qualquer das autoridades competentes ou da comissão arbitral, no decurso do procedimento arbitral. O procedimento amigável ao abrigo do artigo 23.º (Procedimento amigável) da Convenção, bem como o procedimento arbitral ao abrigo do presente Protocolo, relativos ao caso, são encerrados quando, em qualquer momento posterior à apresentação de um pedido de arbitragem e anterior à comunicação da decisão da comissão arbitral às autoridades competentes dos Estados Contratantes, uma pessoa que apresentou o caso ou um dos consultores dessa pessoa viole esse compromisso.

PARTE VI — ACORDO SOBRE UMA RESOLUÇÃO DIFERENTE

Não obstante o disposto no n.º 4 da Parte I (Arbitragem vinculativa obrigatória) do presente Protocolo, uma decisão arbitral em conformidade com o presente Protocolo não é vinculativa para os Estados Contratantes e não é aplicada se as autoridades competentes dos Estados Contratantes acordarem entre si uma resolução diferente que abarque todas as questões não resolvidas no prazo de três meses após lhes ter sido comunicada a decisão arbitral.

PARTE VII — CUSTOS DO PROCEDIMENTO ARBITRAL

Num procedimento arbitral ao abrigo do presente Protocolo, as remunerações e as despesas dos membros da comissão arbitral, bem como os custos relacionados com os procedimentos arbitrais suportados pelos Estados Contratantes, são imputados aos Estados Contratantes de um modo a estabelecer através de acordo amigável entre as autoridades competentes dos Estados Contratantes. Na ausência desse acordo, cada Estado Contratante suporta as suas próprias despesas e as despesas do membro da comissão por si designado. Os custos com o presidente da comissão arbitral e outras despesas associadas à condução do procedimento arbitral são imputados aos Estados Contratantes em partes iguais.

PARTE VIII — COMPATIBILIDADE

1 - Uma questão não resolvida decorrente de um procedimento amigável abrangido pelo âmbito do procedimento arbitral previsto no presente Protocolo não deve ser submetida a arbitragem quando essa questão se insira no âmbito de um caso em relação ao qual tenha previamente sido constituída uma comissão arbitral ou órgão similar em conformidade com uma convenção bilateral ou multilateral que preveja a arbitragem obrigatória e vinculativa para as questões não resolvidas decorrentes de um procedimento amigável.

2 - O disposto no presente Protocolo não prejudica o cumprimento de obrigações mais amplas relativas à arbitragem de questões não resolvidas decorrentes de um procedimento amigável resultante de outras convenções de que os Estados Contratantes sejam ou venham a tornar-se Partes.

PARTE IX — CASOS ELEGÍVEIS PARA ARBITRAGEM

As disposições do presente Protocolo aplicam-se apenas às questões decorrentes das disposições dos artigos 5.º (Estabelecimento estável), 7.º (Lucros das empresas) e 9.º (Empresas associadas) da Convenção, com exclusão dos seguintes casos:

PARTE X — PRODUÇÃO DE EFEITOS

Não obstante o disposto no n.º 3 do artigo 28.º (Entrada em vigor) da Convenção, as disposições do presente Protocolo produzem efeitos unicamente em relação aos casos apresentados à autoridade competente de um Estado Contratante a partir da data de entrada em vigor da Convenção.

3 - Relativamente aos artigos 24.º (Troca de informações) e 25.º (Assistência em matéria de cobrança de impostos)

Os termos ou expressões «IVA», «direitos aduaneiros» e «impostos especiais de consumo» são definidos pelo artigo PVAT.3 do Protocolo relativo à cooperação administrativa e à luta contra a fraude no domínio do imposto sobre o valor acrescentado e à assistência mútua em matéria de cobrança de créditos respeitantes a impostos e direitos e a troca de informações respeitantes aos direitos aduaneiros é abrangida pelo Protocolo relativo à assistência administrativa mútua em matéria aduaneira, anexos ao Acordo de Comércio e Cooperação entre a União Europeia e a Comunidade Europeia da Energia Atómica, por um lado, e o Reino Unido da Grã-Bretanha e da Irlanda do Norte, por outro.

Em testemunho do qual, os signatários, devidamente autorizados para o efeito, assinaram o presente Protocolo.

Feito em Londres, aos 15 dias do mês de setembro de 2025, em dois originais, nas línguas portuguesa e inglesa, sendo ambos os textos igualmente válidos.

Pela República Portuguesa:

Paulo Artur dos Santos de Castro de Campos Rangel, Ministro de Estado e dos Negócios Estrangeiros.

Pelo Reino Unido da Grã-Bretanha e Irlanda do Norte:

Yvette Cooper, Ministra para os Negócios Estrangeiros, Commonwealth e Desenvolvimento.

CONVENTION BETWEEN THE PORTUGUESE REPUBLIC AND THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND FOR THE ELIMINATION OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL GAINS AND THE PREVENTION OF TAX EVASION AND AVOIDANCE.

The Portuguese Republic and The United Kingdom of Great Britain and Northern Ireland,

Desiring to further develop their economic relationship and to enhance their co-operation in tax matters,

Intending to conclude a Convention for the elimination of double taxation with respect to taxes on income and on capital gains without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance (including through treaty-shopping arrangements aimed at obtaining reliefs provided in this Convention for the indirect benefit of residents of third States),

Have agreed as follows:

CHAPTER I

SCOPE OF THE CONVENTION

Article 1

Persons covered

1 - This Convention shall apply to persons who are residents of one or both of the Contracting States.

2 - This Convention shall not affect the taxation, by a Contracting State, of its residents except with respect to the benefits granted under paragraph 2 of Article 9 and Articles 18, 19, 21, 22, 23 and 26.

Article 2

Taxes covered

1 - This Convention shall apply to taxes on income and on capital gains imposed on behalf of a Contracting State or of its political or administrative subdivisions or local authorities, irrespective of the manner in which they are levied.

2 - There shall be regarded as taxes on income and on capital gains all taxes imposed on total income, or on elements of income, including taxes on gains from the alienation of movable or immovable property, as well as taxes on capital appreciation.

3 - The existing taxes to which this Convention shall apply are in particular:

(i) the personal income tax (Imposto sobre o Rendimento das Pessoas Singulares - IRS);

(ii) the corporate income tax (Imposto sobre o Rendimento das Pessoas Coletivas - IRC); and

(iii) the surtaxes on corporate income tax (derramas);

(hereinafter referred to as “Portuguese tax”);

(i) the income tax;

(ii) the corporation tax; and

(iii) the capital gains tax;

(hereinafter referred to as “United Kingdom tax”).

4 - The Convention shall apply also to any identical or substantially similar taxes that are imposed after the date of signature of the Convention in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify each other of any significant changes that have been made in their taxation laws.

CHAPTER II

DEFINITIONS

Article 3

General definitions

1 - For the purposes of this Convention, unless the context otherwise requires:

(i) in Portugal, the Minister of Finance, the Director General of the Tax and Customs Authority or their authorised representative;

(ii) in the United Kingdom, the Commissioners for His Majesty’s Revenue and Customs or their authorised representative;

(i) in relation to Portugal, any individual possessing Portuguese nationality; and any legal person, partnership or association deriving its status as such from the laws in force in Portugal;

(ii) in relation to the United Kingdom, any British citizen, or any British subject not possessing the citizenship of any other Commonwealth country or territory, provided he has the right of abode in the United Kingdom; and any legal person, partnership or association deriving its status as such from the laws in force in the United Kingdom;

2 - As regards the application of the Convention at any time by a Contracting State, any term not defined therein shall, unless the context otherwise requires or the competent authorities agree to a different meaning pursuant to the provisions of paragraph 3 of Article 25, have the meaning that it has at that time under the law of that State for the purposes of the taxes to which the Convention applies, any meaning under the applicable tax laws of that State prevailing over a meaning given to the term under other laws of that State.

Article 4

Resident

1 - For the purposes of this Convention, the term “resident of a Contracting State” means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management, place of incorporation or any other criterion of a similar nature, and also includes that State and any political or administrative subdivision or local authority thereof. This term, however, does not include any person who is liable to tax in that State in respect only of income or capital gains from sources in that State.

2 - Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined as follows:

3 - Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, the competent authorities of the Contracting States shall endeavour to determine by mutual agreement the Contracting State of which that person shall be deemed to be a resident for the purposes of this Convention. In reaching agreement, due regard shall be had to that person’s place of effective management, its place of incorporation, the place of its head office, and any other relevant factors. In the absence of such agreement, that person shall not be entitled to any benefits provided by this Convention, except those provided by Articles 21 (elimination of double taxation), 22 (non-discrimination), and 23 (mutual agreement procedure).

Article 5

Permanent establishment

1 - For the purposes of this Convention, the term “permanent establishment” means a fixed place of business through which the business of an enterprise is wholly or partly carried on.

2 - The term “permanent establishment” includes especially:

3 - A building site or construction or installation project constitutes a permanent establishment only if it lasts more than 12 months.

4 - Notwithstanding the preceding provisions of this Article, the term “permanent establishment” shall be deemed not to include:

5 - Paragraph 4 shall not apply to a fixed place of business that is used or maintained by an enterprise if the same enterprise or a closely related enterprise carries on business activities at the same place or at another place in the same Contracting State and

provided that the business activities carried on by the two enterprises at the same place, or by the same enterprise or closely related enterprises at the two places, constitute complementary functions that are part of a cohesive business operation.

6 - For the purposes of paragraph 5, an enterprise is closely related to an enterprise if, based on all the relevant facts and circumstances, one has control of the other or both are under the control of the same persons or enterprises. In any case, an enterprise shall be considered to be closely related to an enterprise if one possesses directly or indirectly more than 50 per cent of the beneficial interest in the other (or, in the case of a company, more than 50 per cent of the aggregate vote and value of the company’s shares or of the beneficial equity interest in the company) or if a person or another enterprise possesses directly or indirectly more than 50 per cent of the beneficial interest (or, in the case of a company, more than 50 per cent of the aggregate vote and value of the company’s shares or of the beneficial equity interest in the company) in the two enterprises.

7 - Notwithstanding the provisions of paragraphs 1 and 2, where a person - other than an agent of an independent status to whom paragraph 8 applies - is acting on behalf of an enterprise and has, and habitually exercises, in a Contracting State an authority to conclude contracts on behalf of the enterprise, that enterprise shall be deemed to have a permanent establishment in that State in respect of any activities which that person undertakes for the enterprise, unless the activities of such person are limited to those mentioned in paragraph 4 which, if exercised through a fixed place of business, would not make this fixed place of business a permanent establishment under the provisions of that paragraph.

8 - An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely because it carries on business in that State through a broker, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business.

9 - The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other.

CHAPTER III

TAXATION OF INCOME

Article 6

Income from immovable property

1 - Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State.

2 - The term “immovable property” shall have the meaning which it has under the law of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources; ships and aircraft shall not be regarded as immovable property.

3 - The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immovable property.

4 - The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise.

5 - The provisions of this Article shall also apply to income from associated movable property and from the provision of services for the maintenance or operation of immovable property.

Article 7

Business profits

1 - The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that permanent establishment.

2 - Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment.

3 - In determining the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the permanent establishment, including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere.

4 - No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.

5 - For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary.

6 - Where profits include items of income or capital gains which are dealt with separately in other Articles of this Convention, then the provisions of those Articles shall not be affected by the provisions of this Article.

Article 8

Shipping and air transport

1 - Profits of an enterprise of a Contracting State from the operation of ships or aircraft in international traffic shall be taxable only in that State.

2 - The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an international operating agency.

Article 9

Associated enterprises

1 - Where:

and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly.

2 - Where a Contracting State includes in the profits of an enterprise of that State - and taxes accordingly - profits on which an enterprise of the other Contracting State has been charged to tax in that other State and the profits so included are profits which would have accrued to the enterprise of the first-mentioned State if the conditions made between the two enterprises had been those which would have been made between independent enterprises, then that other State, if it agrees that the adjustment made by the first-mentioned State is justified both in principle and as regards the amount, shall make an appropriate adjustment to the amount of the tax charged therein on those profits. In determining such adjustment, due regard shall be had to the other provisions of this Convention and the competent authorities of the Contracting States shall if necessary consult each other.

Article 10

Dividends

1 - Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State.

2 - However, dividends paid by a company which is a resident of a Contracting State may also be taxed in that State according to the laws of that State, but if the beneficial owner of the dividends is a resident of the other Contracting State, the tax so charged shall not exceed:

3 - Notwithstanding the provisions of paragraph 2 dividends paid by a company which is a resident of a Contracting State to a company which beneficially owns such dividends and which is a resident of the other Contracting State shall be taxable only in that other State if:

4 - The foregoing paragraphs shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.

5 - The term “dividends” as used in this Article means income from shares, or other rights, not being debt-claims, participating in profits, as well as any other item which is treated as income from shares by the taxation laws of the Contracting State of which the company making the distribution is a resident. The term also includes profits attributed under an arrangement for participation in profits (“associação em participação”) within the meaning of Portuguese domestic law and income distributed by a “fundo de investimento imobiliário” or a “sociedade de investimento imobiliário” that is established and operates in accordance with the Portuguese domestic law and is taxed under Article 22 of the Tax Incentives Statute (Estatuto dos Benefícios Fiscais).

6 - The provisions of paragraphs 1, 2 and 3 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment. In such case the provisions of Article 7 shall apply.

7 - Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company, except insofar as such dividends are paid to a resident of that other State or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment situated in that other State, nor subject the company’s undistributed profits to a tax on the company’s undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in that other State.

ARTICLE 11

Interest

1 - Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

2 - However, interest arising in a Contracting State may also be taxed in that State according to the laws of that State, but if the beneficial owner of the interest is a resident of the other Contracting State, the tax so charged shall not exceed 10 per cent of the gross amount of the interest.

3 - Notwithstanding the provisions of paragraph 2, the tax charged by a Contracting State on interest arising in that Contracting State shall not exceed 5 per cent of the gross amount of the interest if the interest is beneficially owned by a bank which is a resident of the other Contracting State and is established and regulated as such under the laws of that other Contracting State.

4 - Notwithstanding the provisions of paragraphs 2 and 3, interest arising in a Contracting State shall be taxable only in the other Contracting State if the interest is beneficially owned by that other Contracting State, a political or administrative subdivision or local authority thereof, the central bank of that other Contracting State or any agency or instrumentality of any of the foregoing.

5 - The term “interest” as used in this Article means income from debt-claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor’s profits, and in particular, income from government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures. Penalty charges for late payment shall not be regarded as interest for the purpose of this Article. The term shall not include any item which is treated as a dividend under the provisions of Article 10.

6 - The provisions of paragraphs 1, 2, 3 and 4 shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises through a permanent establishment situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment. In such case the provisions of Article 7 shall apply.

7 - Interest shall be deemed to arise in a Contracting State when the payer is a resident of that State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment, then such interest shall be deemed to arise in the State in which the permanent establishment is situated.

8 - Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the interest exceeds, for whatever reason, the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention.

Article 12

Royalties

1 - Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

2 - However, royalties arising in a Contracting State may also be taxed in that State according to the laws of that State, but if the beneficial owner of the royalties is a resident of the other Contracting State, the tax so charged shall not exceed 5 per cent of the gross amount of the royalties.

3 - The term “royalties” as used in this Article means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work including cinematograph films, any patent, trade mark, design or model, plan, secret formula or process, or for information (know-how) concerning industrial, commercial or scientific experience.

4 - The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise through a permanent establishment situated therein, and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment. In such case the provisions of Article 7 shall apply.

5 - Royalties shall be deemed to arise in a Contracting State when the payer is a resident of that State. Where, however, the person paying the royalties, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment in connection with which the liability to pay the royalties was incurred, and such royalties are borne by such permanent establishment, then such royalties shall be deemed to arise in the State in which the permanent establishment is situated.

6 - Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the royalties exceeds, for whatever reason, the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention.

Article 13

Capital gains

1 - Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 and situated in the other Contracting State may be taxed in that other State.

2 - Gains derived by a resident of a Contracting State from the alienation of shares or comparable interests, such as interests in a partnership or trust, may be taxed in the other Contracting State if, at any time during the 365 days preceding the alienation, these shares or comparable interests derived more than 50 per cent of their value directly or indirectly from immovable property, as defined in Article 6, situated in that other State.

3 - Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State, including such gains from the alienation of such a permanent establishment (alone or with the whole enterprise), may be taxed in that other State.

4 - Gains that an enterprise of a Contracting State that operates ships or aircraft in international traffic derives from the alienation of such ships or aircraft, or of movable property pertaining to the operation of such ships or aircraft, shall be taxable only in that State.

5 - Gains from the alienation of any property other than that referred to in paragraphs 1, 2, 3 and 4, shall be taxable only in the Contracting State of which the alienator is a resident.

Article 14

Income from employment

1 - Subject to the provisions of Articles 15, 17, 18 and 19, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.

2 - Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if:

3 - Notwithstanding the preceding provisions of this Article, remuneration derived by a resident of a Contracting State in respect of an employment exercised aboard a ship or aircraft operated in international traffic shall be taxable only in that State.

Article 15

Directors’ fees

Directors’ fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors or supervisory board or of another similar organ of a company which is a resident of the other Contracting State may be taxed in that other State.

Article 16

Artistes and sportsmen

1 - Notwithstanding the provisions of Article 14, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as a sportsman, from his personal activities as such exercised in the other Contracting State, may be taxed in that other State.

2 - Where income in respect of personal activities exercised by an entertainer or a sportsman in his capacity as such accrues not to the entertainer or sportsman himself but to another person, that income may, notwithstanding the provisions of Articles 7 and 14, be taxed in the Contracting State in which the activities of the entertainer or sportsman are exercised.

Article 17

Pensions

Subject to the provisions of paragraph 1 of Article 18, pensions and other similar remuneration paid to a resident of a Contracting State, shall be taxable only in that State.

Article 18

Government service

1 - Salaries, wages, pensions, and other similar remuneration paid by (or out of funds created by) a Contracting State (“the paying State”) or a political or administrative subdivision or a local authority thereof to an individual in respect of services rendered to the paying State or subdivision or authority thereof shall be taxable only in the paying State. However, where that individual is a not a national of the paying State but is a national of the other Contracting State, such salaries, wages, pensions, and other similar remuneration may be taxed in both Contracting States.

2 - The provisions of Articles 14, 15, 16, and 17 shall apply to salaries, wages, pensions, and other similar remuneration in respect of services rendered in connection with a business carried on by a Contracting State or a political or administrative subdivision or a local authority thereof.

Article 19

Students

Payments which a student or business apprentice who is or was immediately before visiting a Contracting State a resident of the other Contracting State and who is present in the first-mentioned State solely for the purpose of his education or training receives for the purpose of his maintenance, education or training shall not be taxed in that State, provided that such payments arise from sources outside that State.

Article 20

Other income

1 - Items of income beneficially owned by a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of this Convention shall be taxable only in that State.

2 - Notwithstanding the provisions of paragraph 1, where an amount of income is paid to a resident of Portugal out of income received by trustees or personal representatives administering the estates of deceased persons and those trustees or personal representatives are residents of the United Kingdom, that amount shall be treated as arising from the same sources, and in the same proportions, as the income received by the trustees or personal representatives out of which that amount is paid.

Any tax paid by the trustees or personal representatives in respect of the income paid to the beneficiary shall be treated as if it had been paid by the beneficiary.

3 - The provisions of paragraph 1 shall not apply to income, other than income from immovable property as defined in paragraph 2 of Article 6, if the beneficial owner of such income, being a resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein, and the right or property in respect of which the income is paid is effectively connected with such permanent establishment. In such case the provisions of Article 7 shall apply.

4 - Where, by reason of a special relationship between the resident referred to in paragraph 1 and some other person, or between both of them and some third person, the amount of the income referred to in that paragraph exceeds the amount (if any) which would have been agreed upon between them in the absence of such a relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such a case, the excess part of the income shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention.

CHAPTER IV

METHODS FOR ELIMINATION OF DOUBLE TAXATION

Article 21

Elimination of double taxation

1 - Subject to the provisions of Portuguese law regarding the elimination of international double taxation (which shall not affect the general principle hereof), where a resident of Portugal derives income or capital gains which may be taxed in the United Kingdom in accordance with the provisions of this Convention (except to the extent that these provisions allow taxation by the United Kingdom solely because the income or capital gains are also income or capital gains derived by a resident of the United Kingdom), Portugal shall allow, as a deduction from the tax on the income of that resident, an amount equal to the tax on the income or capital gains paid in the United Kingdom. Such deduction shall not, however, exceed that part of the income tax, as computed before the deduction is given, which is attributable to the income or capital gains which may be taxed in the United Kingdom.

2 - Subject to the provisions of the law of the United Kingdom regarding the allowance as a credit against United Kingdom tax of tax payable in a territory outside the United Kingdom or, as the case may be, regarding the exemption from United Kingdom tax of a dividend arising in a territory outside the United Kingdom or of the profits of a permanent establishment situated in a territory outside the United Kingdom (which shall not affect the general principle hereof):

3 - For the purposes of paragraphs 1 and 2, profits, income and gains owned by a resident of a Contracting State which may be taxed in the other Contracting State in accordance with this Convention shall be deemed to arise from sources in that other Contracting State.

4 - The provisions of paragraph 2 shall not apply where the Portuguese tax payable is in accordance with the provisions of this Convention solely because the income referred to in that paragraph is also income derived by a resident of Portugal.

5 - Where in accordance with any provisions of this Convention income or gains derived by a resident of a Contracting State are exempt from tax in that State, such State may nevertheless, in calculating the amount of tax on the remaining income or gains of such resident, take into account the exempted income or gains.

CHAPTER V

SPECIAL PROVISIONS

Article 22

Non-discrimination

1 - Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances, in particular with respect to residence, are or may be subjected.

2 - The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities.

3 - Except where the provisions of paragraph 1 of Article 9, paragraph 8 of Article 11, paragraph 6 of Article 12, paragraph 4 of Article 20, or Article 27 apply, interest, royalties and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of the first-mentioned State.

4 - Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of the first-mentioned State are or may be subjected.

5 - Nothing contained in this Article shall be construed as obliging either Contracting State to grant to individuals not resident in that State any of the personal allowances, reliefs and reductions for tax purposes which are granted to individuals so resident or to its nationals.

Article 23

Mutual agreement procedure

1 - Where a person considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with the provisions of this Convention, he may, irrespective of the remedies provided by the domestic law of those States, present his case to the competent authority of the Contracting State of which he is a resident or, if his case comes under paragraph 1 of Article 22, to that of the Contracting State of which he is a national. The case must be presented within three years from the first notification of the action resulting in taxation not in accordance with the provisions of the Convention.

2 - The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation which is not in accordance with the Convention. Any agreement reached shall be implemented notwithstanding any time limits in the domestic law of the Contracting States.

3 - The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Convention. They may also consult together for the elimination of double taxation in cases not provided for in the Convention.

4 - The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs.

5 - The Protocol to this Convention includes provisions for the arbitration of cases presented under paragraph 1.

Article 24

Exchange of information

1 - The competent authorities of the Contracting States shall exchange such information as is foreseeably relevant for carrying out the provisions of this Convention or to the administration or enforcement of the domestic laws concerning taxes of every kind and description imposed on behalf of the Contracting States, or of their political or administrative subdivisions or local authorities, insofar as the taxation thereunder is not contrary to the Convention. The exchange of information is not restricted by Articles 1 and 2. However, the exchange of information in relation to VAT and customs duties shall be excluded from the scope of this Article.

2 - Any information received under paragraph 1 by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, the determination of appeals in relation to the taxes referred to in paragraph 1, or the oversight of the above. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions. Notwithstanding the foregoing, information received by a Contracting State may be used for other purposes when such information may be used for such other purposes under the laws of both States and the competent authority of the supplying State authorises such use.

3 - In no case shall the provisions of paragraphs 1 and 2 be construed so as to impose on a Contracting State the obligation:

4 - If information is requested by a Contracting State in accordance with this Article, the other Contracting State shall use its information gathering measures to obtain the requested information, even though that other State may not need such information for its own tax purposes. The obligation contained in the preceding sentence is subject to the limitations of paragraph 3 but in no case shall such limitations be construed to permit a Contracting State to decline to supply information solely because it has no domestic interest in such information.

5 - In no case shall the provisions of paragraph 3 be construed to permit a Contracting State to decline to supply information solely because the information is held by a bank, other financial institution, nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership interests in a person.

Article 25

Assistance in the collection of taxes

1 - The Contracting States shall lend assistance to each other in the collection of revenue claims. This assistance is not restricted by Articles 1 and 2. However, claims related to VAT, customs duties and excise duties shall be excluded from the scope of this Article. The competent authorities of the Contracting States may by mutual agreement settle the mode of application of this Article.

2 - The term “revenue claim” as used in this Article means an amount owed in respect of taxes of every kind and description (other than VAT, customs duties and excise duties) imposed on behalf of the Contracting States, or of their political or administrative subdivisions or local authorities, insofar as the taxation thereunder is not contrary to this Convention or any other instrument to which the Contracting States are parties, as well as interest, administrative penalties and costs of collection or conservancy related to such amount.

3 - When a revenue claim of a Contracting State is enforceable under the laws of that State and is owed by a person who, at that time, cannot, under the laws of that State, prevent its collection, that revenue claim shall, at the request of the competent authority of that State, be accepted for purposes of collection by the competent authority of the other Contracting State. That revenue claim shall be collected by that other State in accordance with the provisions of its laws applicable to the enforcement and collection of its own taxes as if the revenue claim were a revenue claim of that other State.

4 - When a revenue claim of a Contracting State is a claim in respect of which that State may, under its law, take measures of conservancy with a view to ensure its collection, that revenue claim shall, at the request of the competent authority of that State, be accepted for purposes of taking measures of conservancy by the competent authority of the other Contracting State. That other State shall take measures of conservancy in respect of that revenue claim in accordance with the provisions of its laws as if the revenue claim were a revenue claim of that other State even if, at the time when such measures are applied, the revenue claim is not enforceable in the first-mentioned State or is owed by a person who has a right to prevent its collection.

5 - Notwithstanding the provisions of paragraphs 3 and 4, a revenue claim accepted by a Contracting State for purposes of paragraph 3 or 4 shall not, in that State, be subject to the time limits or accorded any priority applicable to a revenue claim under the laws of that State by reason of its nature as such. In addition, a revenue claim accepted by a Contracting State for the purposes of paragraph 3 or 4 shall not, in that State, have any priority applicable to that revenue claim under the laws of the other Contracting State.

6 - Proceedings with respect to the existence, validity or the amount of a revenue claim of a Contracting State shall not be brought before the courts or administrative bodies of the other Contracting State.

7 - Where, at any time after a request has been made by a Contracting State under paragraph 3 or 4 and before the other Contracting State has collected and remitted the relevant revenue claim to the first-mentioned State, the relevant revenue claim ceases to be

8 - In no case shall the provisions of this Article be construed so as to impose on a Contracting State the obligation:

Article 26

Members of diplomatic missions and consular posts

Nothing in this Convention shall affect the fiscal privileges of members of diplomatic missions or consular posts under the general rules of international law or under the provisions of special agreements.

Article 27

Entitlement to benefits

Notwithstanding the other provisions of this Convention, a benefit under this Convention shall not be granted in respect of an item of income or a capital gain if it is reasonable to conclude, having regard to all relevant facts and circumstances, that obtaining that benefit was one of the principal purposes of any arrangement or transaction that resulted directly or indirectly in that benefit, unless it is established that granting that benefit in these circumstances would be in accordance with the object and purpose of the relevant provisions of this Convention.

CHAPTER VI

FINAL PROVISIONS

Article 28

Entry into force

1 - This Convention shall enter into force on the date of receipt of the later of the notifications, in writing, through diplomatic channels, conveying the completion of the internal procedures of each Contracting State required for that purpose.

2 - The provisions of this Convention shall have effect:

(i) in respect of taxes withheld at source, where the event giving rise to them occurs on or after the first day of January next following the date on which this Convention enters into force; and

(ii) in respect of other taxes, for taxable periods beginning on or after the first day of January next following the date on which this Convention enters into force;

(i) in respect of taxes withheld at source, for amounts paid or credited on or after the first day of January next following the date on which this Convention enters into force;

(ii) in respect of income tax and capital gains tax, for any year of assessment beginning on or after the sixth day of April next following the date on which this Convention enters into force; and

(iii) in respect of corporation tax, for any financial year beginning on or after the first day of April next following the date on which this Convention enters into force.

3 - Notwithstanding the provisions of paragraph 2, the provisions of Article 23 (mutual agreement procedure), Article 24 (exchange of information) and Article 25 (assistance in the collection of taxes) shall have effect from the date of entry into force of this Convention, without regard to the taxable period to which the matter relates.

4 - The Convention between Portugal and the United Kingdom of Great Britain and Northern Ireland for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, signed at Lisbon on 27 March 1968 (“the prior Convention”) and the Agreement between the Government of Portugal and the Government of the United Kingdom of Great Britain and Northern Ireland for the avoidance of double taxation on income derived from sea and air transport signed at Lisbon on 31 July 1961 (“the Agreement”) shall cease to have effect in respect of any tax with effect from the date upon which this Convention has effect in respect of that tax in accordance with the provisions of paragraph 2 of this Article and the prior Convention and the Agreement shall terminate on the last such date. However, the prior Convention shall continue to have effect in respect of income arising before that date.

Article 29

Termination

This Convention shall remain in force until terminated by one of the Contracting States. Either Contracting State may terminate this Convention, through diplomatic channels, by giving notice of termination at least six months before the end of any calendar year beginning after the expiry of five years from the date of entry into force of this Convention. In such event, this Convention shall cease to have effect:

(i) in respect of taxes withheld at source, where the event giving rise to them occurs on or after the first day of January next following the date specified in the notice of termination; and

(ii) in respect of other taxes, for taxable periods beginning on or after the first day of January next following the date specified in the notice of termination;

(i) in respect of taxes withheld at source, for amounts paid or credited on or after the first day of January next following the date specified in the notice of termination;

(ii) in respect of income tax and capital gains tax, for any year of assessment beginning on or after the sixth day of April next following the date specified in the notice of termination; and

(iii) in respect of corporation tax, for any financial year beginning on or after the first day of April next following the date specified in the notice of termination.

Article 30

Registration

The Contracting State in whose territory this Convention is signed shall transmit it to the Secretariat of the United Nations for registration, in accordance with Article 102 of the Charter of the United Nations, as soon as possible after its entry into force, and shall notify the other Contracting State of the completion of this procedure, as well as of its registration number.

In witness whereof the undersigned, duly authorized thereto, have signed this Convention

Done at London on 15^th, in two originals, in the Portuguese and English languages, both texts being equally authoritative.

For the Portuguese Republic:

Paulo Artur dos Santos de Castro de Campos Rangel, Minister of State and Foreign Affairs.

For the United Kingdom of Great Britain and Northern Ireland:

Yvette Cooper, Foreign Secretary.

PROTOCOL TO THE CONVENTION BETWEEN THE PORTUGUESE REPUBLIC AND THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND FOR THE ELIMINATION OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL GAINS AND THE PREVENTION OF TAX EVASION AND AVOIDANCE.

At the signing of the Convention between the Portuguese Republic and the United Kingdom of Great Britain and Northern Ireland for the elimination of double taxation with respect to taxes on income and on capital gains and the prevention of tax evasion and avoidance (hereinafter referred to as “the Convention”), the Portuguese Republic and the United Kingdom of Great Britain and Northern Ireland have agreed upon the following provisions, which shall form an integral part of the Convention:

1 - With reference to paragraph 2 of Article 13 (Capital Gains):

It is understood that the term “comparable interest” includes, in the case of Portugal, participation units in an undertaking for collective investment within the scope of Portugal’s domestic law.

2 - With reference to Article 23 (Mutual agreement procedure):

It is understood that:

PART I

MANDATORY BINDING ARBITRATION

1 - Where: