The Portuguese Budget Law for 2016 has been approved on 16 March 2016. The approved Budget Law implements country-by-country reporting requirements.
Country-by-Country (CbC) reporting requirement will be applicable for domestic entities with consolidated group revenue of €750 million or more for an accounting period. The CbC report is a new requirement for the Portuguese parent company of a multinational enterprise (MNE) group, provided that the parent company is not itself owned by a foreign related party that is obliged to submit the CbC report. The regulations will apply to multinational groups for accounting periods beginning on or after 1 January 2016.
The Country-by-Country (CbC) report must be submitted by a company resident in Portugal that is the parent company of a corporate group. A parent company is a company that is not a subsidiary of any other company in Portugal.
The report must cover group revenue, distinguishing between related and unrelated parties; accounting results before corporate income tax (or similar taxes); and corporate tax (or similar taxes) paid or accrued, including withholding tax. The average number of employees in each entity will have to be reported.
The CbC report must be submitted within twelve months after the end of the tax year.
Failure to submit the CbC reporting before the due date defined by the Tax and Customs Authority will result in a penalty which can reach €20,000 per year and per company.
