Portugal–Switzerland tax treaty in English
Convention between Portugal and Switzerland for the Avoidance of Double Taxation with respect to Taxes on Income and on Capital. Article by article, in English, with the Portuguese alongside: 217 aligned provisions.
Signature, entry into force and texts
- Signed
- 26 September 1974, Berne (with Additional Protocol)
- Approved by
- Decreto n.º 716/74, de 12 de Dezembro (Diário do Governo, I série, n.º 289, 12 December 1974), approving the Convention and Additional Protocol for ratification; Rectificação of 3 March 1975 (French text only)
- In force
- 17 December 1975
- Takes effect
- From 1 January 1976: Portugal – taxes withheld at source where the chargeable event arises after 31 December 1975, other taxes on income of calendar years beginning after that date; Switzerland – withholding taxes on income payable after 31 December 1975, other taxes for fiscal years beginning after that date (Art. 28(2)). Article 8, the last sentence of Article 13(2) and Article 22(3) apply from the calendar year 1963 (Art. 28(3)). The 2012 Protocol has effect from 1 January 2014 (see protocols).
- Authentic languages
- Portuguese, French
- Amending protocol
- 25 June 2012, Lisbon: Amended Articles 2(1) and 2(3)(a), 3(1)(b), 4 (heading; para. 4 deleted), 6(3), 9 (new para. 2), 10 (new paras. 2–6: 5%/15% and exemptions), 11 (beneficial owner, exemptions, associated-company exemption), 12 (definition, associated-company exemption), 13 (new para. 3 on real-estate companies), 16, 17 (new para. 2), 19, 23 (new para. 2; para. 3 sentence added; old para. 5 deleted), 24 (new para. 4); added Article 25 bis (exchange of information); replaced Article 27 (entitlement to benefits); amended the Additional Protocol (new paras. 2–4 and 6–10). Effective from 1 January 2014 (Art. XVIII(2)); Arts. 11(8) and 12(7) not before 1 July 2013; Art. 25 bis for requests made on or after 21 October 2013 concerning taxable periods beginning on or after 1 January 2014. Merged into the articles concerned. (in force 21 October 2013 (Aviso n.º 102/2013, Diário da República, 1.ª série, n.º 212, 1 November 2013; notes of 2 and 11 October 2013))
- English text
- Our translation of the Portuguese text, reviewed by a second tax translator
Treaty rates for dividends, interest and royalties
The maximum tax the State where the income arises may charge when the beneficial owner is resident in the other State. The article reference opens the provision.
| Income | Rate | Condition | Article |
|---|---|---|---|
| Dividends | 0% | Beneficial owner is the Banco de Portugal or the Swiss National Bank | 10(3)(a) |
| Dividends | 0% | Recipient company holds directly at least 25% of the capital of the paying company for at least two years; both companies subject to and not exempt from the taxes covered, neither resident in a third State under a treaty with that State, both in limited-company form (French text: société de capitaux) | 10(3)(b) |
| Dividends | 5% | Beneficial owner is a company (other than a partnership) holding directly at least 25% of the capital of the paying company | 10(2)(a) |
| Dividends | 5% | Beneficial owner is a recognised, supervised pension fund of the other State | P(3) |
| Dividends | 15% | All other cases | 10(2)(b) |
| Interest | 0% | Paid by the source State, its political or administrative subdivisions, local authorities or central bank, or beneficially owned by the other State, its subdivisions, local authorities or central bank | 11(3) |
| Interest | 0% | Paid between associated companies with a direct holding of at least 25% (or common 25% parent) for at least two years, resident in different Contracting States, not resident in a third State under a treaty, subject to corporate tax without exemption, in capital-company form | 11(8) |
| Interest | 10% | All other interest beneficially owned by a resident of the other State | 11(2) |
| Royalties | 0% | Paid between associated companies meeting the same 25%/two-year and other conditions as for interest | 12(7) |
| Royalties | 5% | All other royalties (no equipment rentals since 2014; some software payments included, Protocol para. 6) | 12(2) |
Treaty rates are maxima on the gross amount; domestic law may be more favourable. In Portugal, dividends paid to a Swiss parent may be exempt under Article 14(3) CIRC where its conditions are met (including at least a 10% holding for one year and taxation of the recipient at a rate not lower than 60% of the IRC rate), and Switzerland grants the participation reduction on Portuguese dividends (Art. 23(5)). The 0% rules in Arts. 10(3)(b), 11(8) and 12(7) mirror the Switzerland–EU agreement (originally Art. 15 of the 2004 Savings Agreement, now Art. 9 of the agreement on automatic exchange of financial account information). Art. 12(2) does not require beneficial ownership, but Art. 27(2) denies treaty benefits to a resident who is not the beneficial owner. The MLI does not yet apply; when it does, the principal purpose test will replace Art. 27(3), and Art. 8 MLI (365-day dividend holding period) will not apply because Portugal reserved it for treaties that already contain a holding period.
To apply a treaty rate at source in Portugal, the recipient gives the Portuguese payer a form certified by its own tax authority before the tax is due (Article 98 CIRC); otherwise the excess tax can be reclaimed afterwards.
Has the MLI changed this treaty?
The Convention is a Covered Tax Agreement for both States: Portugal lists it at item lxix of Article 2(a) of Decreto do Presidente da República n.º 70/2019 (MLI approved by Resolução da Assembleia da República n.º 225/2019), and Switzerland lists it as agreement No. 10 in its MLI positions (RS 0.671.1). It is not yet modified, because Switzerland has not deposited the Article 35(7)(b) notification for the Portugal treaty. Matching the positions, the following changes are expected once it takes effect: the MLI preamble (Art. 6(1)) would be added to the existing preamble (Portugal notified the existing preamble under Art. 6(5) but Switzerland did not; Art. 6(3) does not apply because Portugal did not choose it); the principal purpose test (Art. 7(1)) would replace Art. 27(3) (both notified it); Switzerland’s choice of Option A of Art. 5 would apply to the Swiss exemption in Art. 23(3), while Portugal’s Option C is blocked by Switzerland’s Art. 5(9) reservation; Art. 16 would extend the MAP time limit in Art. 25(1) from two to three years (Portugal reserved the first sentence of Art. 16(1) and Switzerland the second sentence of Art. 16(2)); Art. 17(1) would replace Art. 9(2); and Part VI arbitration would become available, subject to both States’ reservations. Arts. 3, 4, 8, 9, 10 and 12 to 15 of the MLI would not apply because Switzerland (and, for Art. 8, Portugal) reserved them. No synthesised text has been published. Article notes on affected provisions are in the ‘future’ fields.
- From when
- Not yet in effect. The MLI entered into force for Switzerland on 1 December 2019 and for Portugal on 1 June 2020, but Switzerland reserved under Article 35(7)(a) the right to delay entry into effect until it notifies completion of its internal procedures for each covered agreement; as of October 2026 no such notification had been made for Portugal (Swiss notifications: Luxembourg 27.5.2020, Lithuania and Czechia 18.12.2020, Iceland 16.12.2022, Argentina 28.5.2026). Under Switzerland’s reservation, the date 30 days after the Depositary receives the later of the notifications replaces the entry-into-force date as the reference date in Article 35(1) and (4); the MLI would then have effect for withholding taxes from 1 January of the following calendar year and for other taxes for taxable periods beginning on or after six months (or a shorter period agreed) after that date.
- Provisions applied
- Art. 6(1) (preamble, added to the existing text) – pending
- Art. 7(1) (principal purpose test, replacing Art. 27(3)) – pending
- Art. 5 Option A (Switzerland only; exemption in Art. 23(3)) – pending
- Art. 16 (MAP: three-year time limit in Art. 25(1)) – pending
- Art. 17(1) (corresponding adjustments, replacing Art. 9(2)) – pending
- Part VI (mandatory binding arbitration) – pending, both States opted in
Every article of the treaty
- 6Income from immovable propertyRendimentos dos bens imobiliários
- 7Business profitsLucros das empresas
- 8Shipping and air transportNavegação marítima e aérea
- 9Associated enterprisesEmpresas associadas
- 10DividendsDividendos
- 11InterestJuros
- 12Royalties«Redevances»
- 13Capital gainsMais-valias
- 14Independent personal servicesProfissões independentes
- 15Dependent personal servicesProfissões dependentes
- 16Directors’ feesPercentagens de membros de conselhos
- 17Artistes and sportsmenArtistas e desportistas
- 18PensionsPensões
- 19Government serviceFunções públicas
- 20StudentsEstudantes
- 21Income not expressly mentionedRendimentos não expressamente mencionados
- 24Non-discriminationNão discriminação
- 25Mutual agreement procedureProcedimento amigável
- 25 bisExchange of informationTroca de informações
- 26Members of diplomatic missions and consular postsFuncionários diplomáticos e consulares
- 27Entitlement to benefits of the ConventionDireito aos benefícios da Convenção
How this edition is made
The Portuguese text
Reproduced from the official publication and compared line by line with it. Where a protocol replaced or added a provision, the article shows the wording in force and a note names the protocol.
The English text
Our translation of the Portuguese, in the wording of the OECD Model Tax Convention wherever the treaty follows it, checked by a second tax translator against the Portuguese and the partner State’s authentic text for rates, conditions and cross-references.
What it is not
Not tax advice. Whether a treaty rate applies depends on residence, beneficial ownership, anti-abuse rules and the paperwork; domestic law may give a better result.
Unofficial English translation prepared by BCA Portugal for reference. The Convention was done in Portuguese and French and only those texts are authentic. The Portuguese text is reproduced from the official publication. Editorial notes are ours and are not part of the Convention.
Treaty relief between Portugal and Switzerland, claimed correctly
Treaty rates are not automatic in Portugal: the recipient must give the payer a form certified by its own tax authority before the tax is due, or claim a refund afterwards. We check which article applies, the rate and the paperwork.