Tax treaty · signed 2025

Portugal–United Kingdom tax treaty in English (official text)

Convention between the United Kingdom of Great Britain and Northern Ireland and the Portuguese Republic for the elimination of double taxation with respect to taxes on income and on capital gains and the prevention of tax evasion and avoidance. Article by article, in the authentic English text, with the Portuguese alongside: 286 aligned provisions.

Withholding ratesDividends: Article 10
English, Portuguese or side by side30 articles and the protocolFree, no sign-up
Maximum tax at source
Dividends0%: company holding at least 10% for 1 year; 15%: property investment vehicles0% · 10% · 15%
Interest5%: banks; 0%: the State and central bank0% · 5% · 10%
Royaltiesbeneficial owner resident in the other State5%
Multilateral Instrument (MLI): not applicable: the 2025 treaty has its own principal purpose test. Without the treaty, Portugal taxes these payments to non-resident companies at 25% (Article 87(4) CIRC).
Key facts

Signature, entry into force and texts

Signed
15 September 2025, London
Approved by
Resolução da Assembleia da República n.º 206-A/2025, de 29 de dezembro (approved 19 December 2025), DR n.º 249/2025, Suplemento, Série I, 2025-12-29; ratified by Decreto do Presidente da República n.º 124-A/2025, de 29 de dezembro (same DR issue). United Kingdom: The Double Taxation Relief and International Tax Enforcement (Portuguese Republic) Order 2025 (SI 2025/1300).
In force
29 December 2025 (Aviso n.º 1/2026/1)
Takes effect
Portugal: from 1 January 2026, for taxes withheld at source (taxable event on or after that date) and for other taxes (taxable periods beginning on or after that date). United Kingdom: taxes withheld at source on amounts paid or credited from 1 January 2026; income tax and capital gains tax from 6 April 2026; corporation tax for financial years beginning on or after 1 April 2026. Articles 23–25 (MAP, exchange of information, collection assistance) from 29 December 2025; Protocol arbitration for cases presented on or after 29 December 2025. The 1968 Convention continues to apply to income arising before these dates (Art. 28(4)).
Authentic languages
Portuguese, English
Replaces
Convention between the United Kingdom of Great Britain and Northern Ireland and Portugal for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income – Ceases to have effect for each tax from the date the 2025 Convention takes effect for that tax (2026) and terminated on the last such date; still applies to income arising before that date (Art. 28(4) of the 2025 Convention). The 1961 UK–Portugal agreement on sea and air transport income is replaced on the same terms.
English text
Authentic, reproduced from the text published on GOV.UK by HM Revenue & Customs
Withholding tax

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.

IncomeRateConditionArticle
Dividends0%Beneficial owner is a company resident in the other State that holds directly at least 10% of the capital of the paying company for an uninterrupted period of at least one year including the payment date, and each company is liable to IRC / corporation tax without a general exemption (dividends taxable only in the State of residence)10(3)
Dividends10%All other dividends beneficially owned by a resident of the other State10(2)(a)
Dividends15%Dividends paid out of income (including gains) derived directly or indirectly from immovable property by an investment vehicle that distributes most of that income annually and whose income from that property is exempt from tax (e.g. REIT-type vehicles)10(2)(b)
Interest0%Interest beneficially owned by the other Contracting State, its political or administrative subdivisions or local authorities, its central bank or any agency or instrumentality of these11(4)
Interest5%Interest beneficially owned by a bank resident in the other State and established and regulated as such under that State’s laws11(3)
Interest10%All other interest beneficially owned by a resident of the other State11(2)
Royalties5%Royalties beneficially owned by a resident of the other State (gross amount)12(2)

Rates are the maximum source-State rates under the 2025 Convention, in effect from 1 January 2026 for taxes withheld at source in both States. All reductions are subject to the principal purpose test in Art. 27. Domestic law may give a lower rate. The United Kingdom does not withhold tax on ordinary dividends under its domestic law; property income distributions by UK REITs are the main exception and are the case Art. 10(2)(b) (15%) addresses. In Portugal, the domestic exemption on outbound dividends for qualifying holdings by companies resident in a treaty State (Art. 14 CIRC) can also apply to UK parents, subject to its own holding-period and subject-to-tax conditions. The EU directives (parent-subsidiary, interest and royalties) no longer apply to UK recipients. Relief at source in Portugal requires form Mod. 21-RFI and a separate UK residence certificate, held by the payer by the 20th of the month after payment; otherwise a refund can be claimed. Capital gains: shares in Portuguese land-rich companies (>50% value from Portuguese immovable property in the previous 365 days) may be taxed in Portugal (Art. 13(2)). The 1968 Convention rates still apply to income arising before the 2026 effective dates.

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.

Multilateral Instrument

Has the MLI changed this treaty?

The 2025 Convention is not a Covered Tax Agreement. Both States notified the earlier 1968 Convention as a Covered Tax Agreement: the UK MLI position lists it as agreement no. 85, and Portugal’s list annexed to Resolução da Assembleia da República n.º 225/2019 lists it at item lxxv. The MLI entered into force for the UK on 1 October 2018 and for Portugal on 1 June 2020, so under Article 35(1) of the MLI it had effect for the 1968 Convention for taxes withheld at source from 1 January 2021 and for other taxes for taxable periods beginning on or after 1 December 2020. That Convention has now been replaced. The 2025 Convention was negotiated after the BEPS project and builds the minimum standard and most MLI options directly into its text: the preamble (cf. MLI Art. 6), a principal purpose test in Art. 27 (cf. MLI Art. 7), the dual-resident entity rule in Art. 4(3) (cf. MLI Art. 4), the anti-fragmentation and closely related enterprise rules in Art. 5(5)–(6) (cf. MLI Arts. 13(4) and 15; the Art. 5(4) exceptions keep the pre-BEPS wording), the 365-day immovable-property-company test in Art. 13(2) (cf. MLI Art. 9(4)), the one-year holding requirement for the dividend exemption in Art. 10(3) (cf. MLI Art. 8), a MAP that meets the BEPS minimum standard in Art. 23 (cf. MLI Art. 16) and mandatory binding arbitration in the Protocol (cf. MLI Part VI). The dependent-agent rule (Art. 5(7)) keeps the pre-BEPS wording. No synthesised MLI text has been published for UK–Portugal, and none is needed for the 2025 Convention.

From when
Not applicable to the 2025 Convention. The MLI modified the 1968 Convention (a Covered Tax Agreement for both States) until that Convention ceased to have effect in 2026.
Contents

Every article of the treaty

  • PreTitle and preambleTítulo e preâmbulo
    • Chapter I · Scope of the conventionÂmbito de aplicação da convenção
    1. 1Persons CoveredPessoas visadas
    2. 2Taxes CoveredImpostos visados
    Chapter IV · Methods for elimination of double taxationMétodos de eliminação da dupla tributação
    1. 21Elimination of Double TaxationEliminação da dupla tributação
    Sources and method

    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

    An authentic text of the Convention, copied from the text published on GOV.UK by HM Revenue & Customs and aligned with the Portuguese paragraph by paragraph. Obvious printing errors are corrected only where another authentic text confirms the reading, and each correction is noted.

    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.

    The English column is an authentic text of the Convention, reproduced from the text published on GOV.UK by HM Revenue & Customs. The Convention was done in Portuguese and English, each text being authentic. The Portuguese text is reproduced from the official publication. Editorial notes are ours and are not part of the Convention.

    Applying the law

    Treaty relief between Portugal and the United Kingdom, 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.

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