Portugal–UAE treaty Article 27: Entitlement to the…

1 - It is understood that the provisions of the Convention shall not be interpreted so as to prevent the application by a Contracting State of the anti-avoidance provisions provided for in its domestic law.

1 - Entende-se que as disposições da Convenção não serão interpretadas de modo a impedir a aplicação por um Estado Contratante das disposições antiabuso previstas na sua legislação interna.

2 - It is understood that the benefits foreseen in the Convention shall not be granted to a resident of a Contracting State which is not the beneficial owner of the income derived from the other Contracting State.

2 - Entende-se que os benefícios previstos na Convenção não serão concedidos a um residente de um Estado Contratante que não seja o beneficiário efectivo dos rendimentos obtidos no outro Estado Contratante.

3 - The provisions of the Convention shall not apply if it was the main purpose or one of the main purposes of any person concerned with the creation or assignment of the property or right in respect of which the income is paid to take advantage of those provisions by means of such creation or assignment.

3 - As disposições da Convenção não serão aplicáveis se o objectivo principal ou um dos objectivos principais de qualquer pessoa associada à criação ou à atribuição de um bem ou direito em relação com o qual o rendimento é pago for o de beneficiar das referidas disposições por meio dessa criação ou atribuição.

Editorial note

Paragraph 3 (main-purpose rule for the creation or assignment of rights) is replaced by Article 7(1) of the MLI (principal purpose test), with effect from 1 January 2021 for taxes withheld at source and for taxable periods beginning on or after 1 December 2020 for other taxes. Both States notified Article 27(3) as a provision described in MLI Art. 7(2). The PPT text reads: 'Notwithstanding any provisions of a Covered Tax Agreement, a benefit under the Covered Tax Agreement shall not be granted in respect of an item of income or capital 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 the Covered Tax Agreement.' The discretionary relief rule in MLI Art. 7(4) does not apply: the UAE chose it, but Portugal did not. Paragraphs 1 (domestic anti-abuse rules) and 2 (beneficial ownership) are unaffected. Source: MLI positions of Portugal (Decreto do Presidente da República n.º 70/2019, deposited 28 February 2020) and of the United Arab Emirates (deposited 29 May 2019); no synthesised text for this Convention has been published by either State as far as could be found.

Paying or receiving income between Portugal and the United Arab Emirates? Article 27 may decide where it is taxed.

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The English column is an authentic text of the Convention, reproduced from the Diário da República publication (Resolution of the Assembly of the Republic No. 47/2012). The Convention was done in Portuguese, Arabic and English, each text being authentic; the English text prevails in case of divergence. The Portuguese text is reproduced from the official publication. Editorial notes are ours and are not part of the Convention.

Article 27 Entitlement to the benefits foreseen in the Convention

Treaty relief between Portugal and the United Arab Emirates, claimed correctly