On December 11, 2017, the Portuguese government issued Order 367/2017 approving the model declaration, “Communication of the Identification of the Declarant Entity – Financial and Tax Declaration by Country” (Model 54), under Article 121-A(4) of the Income Tax Code (ITC). The declaration, which represents a notification for country-by-country (CbC) reporting purposes, must be submitted electronically for tax periods beginning on or after January 1, 2016. See BEPS Action 13.
Article 121-A(4) of the ITC says that any person that is a Portuguese resident, or is a non-resident with a permanent establishment in Portugal, and is part of a group in which any entity is required to submit a CbC report, must communicate electronically by the end of tax period on the data to be reported, as well as the identification and jurisdiction of the reporting entity.
Under Article 121-A(1), Portuguese resident entities should submit annually for each tax period a CbC report where all of the following conditions apply:
- Required to prepare consolidated financial statements.
- Hold or control, directly or indirectly, one or more entities whose tax residence or permanent establishment is located outside Portugal.
- Amount of income in the financial consolidated statements for the previous annual accounting period is at least €750M.
- Not held by one or more Portuguese resident entities that are required to submit the CbC report, or by one or more non-resident entities which are required to submit the CbC report in a jurisdiction which has an effective agreement with Portugal to exchange the report.
Model 54 requires the entity completing the form to include the following information:
- Group reporting period.
- Identification of reporting entity.
- Identification of ultimate parent entity.
- Identification of surrogate / designated entity.
- Whether the conditions referred to in Article 121A-2 are satisfied, including the following:
- Foreign parent entity is not required to submit the CbC report.
- Qualified competent authority agreement is not in force.
- Systemic failure in ultimate parent entity’s tax residence and the constituent entity has been notified.
- Identification of legal representative and certified accountant.
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