On 19 July 2019, the Portuguese parliament approved Law No. 180/2019, which includes amendments to the country’s transfer pricing (TP) rules. The new law changes the following rules:
- Abolishing the hierarchy in the selection of the transfer pricing method, and taxpayers may adopt methods other than those set out in the current transfer pricing rules for transactions with unique characteristics or where there is a lack of information about comparable transactions between unrelated parties;
- Large taxpayers will be required to prepare and submit transfer pricing documentation to the Portuguese tax authorities by the 15th day of the seventh month following the end of the tax year;
- The transfer pricing rules will be aligned with the new reporting obligations specified in Ministerial Order No. 35/2019, specifically appendix H, which requires transfer pricing information;
- The extension of penalties for failing to submit transfer pricing documentation and CbC reports to also apply for CbC notifications, which include penalties of EUR 1,000 to EUR 20,000 plus 5% per day of delay; and
- An increase in the maximum validity period of advance pricing agreements (APAs) from 3 years to 4 years, as well as related provisions for the exchange of information on APAs with other jurisdictions.
The new rules will apply as from 1 October 2019.
