The Impact of Portugal’s Tax Blacklist
Portugal maintains a list of jurisdictions treated as having clearly more favourable tax regimes. Inclusion on this list triggers penalty provisions across six tax codes.
The list was approved in 2004 and has been amended four times. The Ministry of Finance has the power to identify privileged tax regimes by ministerial order. Also in 2004, the preamble to the law explained the drafting choice: the government adopted enumeration rather than a substantive test in the interests of legal certainty, while acknowledging that this approach would require periodic revision.
Listing operates by cross-reference, and there is no consolidated blacklist regime. Instead, individual provisions in the corporate income tax code, the personal income tax code, the property tax and property transfer tax codes, the stamp duty code and the tax benefits statute each refer to the list and attach their own consequences. A transaction may be unaffected under one code and heavily penalised under another.
The impact of being listed
Listing does not make transactions unlawful, as it is not a sanctions regime. Contracts with counterparties in listed jurisdictions are valid and enforceable.
This list should not be confused with the EU list of non-cooperative jurisdictions or with the broader reporting list maintained by the Bank of Portugal.
Furthermore, it is distinct from anti-money-laundering designations, although the lists overlap in places. A jurisdiction may be listed for Portuguese tax purposes while presenting no elevated AML risk, and the converse also occurs. It has no effect on VAT, and supplies to and from listed jurisdictions follow ordinary place-of-supply and reverse-charge rules.
Finally, it does not displace double tax treaties, and where a treaty is in force and residence is properly evidenced, treaty withholding rates apply notwithstanding the listing.
Current composition of the blacklist
The list contains seventy-seven entries following the removal of Hong Kong, Liechtenstein and Uruguay with effect from 1 January 2026. The full schedule is at Annex A.
The list includes treaty partners, European and near-European centres, conventional economies without an offshore financial centre, regimes rather than states, and territories of EU and allied states.
Amendment history
2011 – Removed Cyprus and the Luxembourg 1929 holding company regime
2016 – Removed Jersey, the Isle of Man and Uruguay from 1 January 2017
2017 – Repealed the 2016 ordinance. All three reinstated from 1 January 2018
2020 – Removed Andorra from 1 January 2021
2025 – Removed Hong Kong, Liechtenstein and Uruguay from 1 January 2026
The 2016 amendment and its reversal illustrate the instrument’s character. The government removed the three jurisdictions on technical grounds: all were Global Forum members with satisfactory ratings, Jersey and the Isle of Man had signed information exchange agreements with Portugal, Uruguay had a treaty in force, and all had joined the multilateral competent authority agreement on automatic exchange.
Twelve months later, a parliamentary amendment to the 2018 Budget repealed the ordinance and reinstated all three. Uruguay was removed again in 2025, eight years after its first delisting.
Listing status is therefore a political variable as much as a technical one, and it can move adversely within a single Budget cycle.
Removal proceeds either on the government’s initiative or on a formal request from the jurisdiction. The tax authority issues an opinion, and where the criteria are no longer satisfied, the Secretary of State for Tax Affairs signs an ordinance. Hong Kong, Liechtenstein and Uruguay used this route in 2025, and the resulting ordinance recorded that none of the three appeared on the EU list of non-cooperative jurisdictions.
An overview of the impact of being listed
Payments out of Portugal
Payments to a listed jurisdiction may be deemed not deductible for tax purposes, with a 35% penalty tax applying in addition (55% for exempt entities). The charge is usually avoidable where the taxpayer demonstrates that the payment corresponded to a real transaction at a fair price. That evidence must exist before an audit rather than be assembled in response to one.
Separately, the general withholding tax rate on dividends, interest and royalties is 25%, rising to 35% for a listed recipient absent a treaty. Where a treaty is in force, the treaty rate applies instead, provided a residence certificate is filed before payment. Absent the certificate, the payer withholds at 35% and the recipient recovers the excess through a refund claim. Treaty relief addresses withholding tax alone and has no effect on the deductibility position or the penalty tax described above.
Shareholdings and group structures
Capital gains and dividends from a subsidiary in a listed jurisdiction do not qualify for the participation exemption and are taxed in full.
Any counterparty in a listed jurisdiction is automatically treated as a related party for transfer pricing purposes, irrespective of the actual commercial relationship. Full transfer pricing documentation follows, with no exemption available for smaller companies.
A holding of 25% or more in a company resident in a listed jurisdiction (10% where Portuguese residents together hold a majority) results in that company’s profits being taxed in Portugal as earned, whether or not any distribution is made.
Real estate
Property held through a company attracts 7.5% annual property tax and 10% property transfer tax where the company is controlled by a person resident in a listed jurisdiction.
The tax authority’s position is that control by an individual resident in such a jurisdiction is sufficient to trigger the rate, even where the company itself has no other connection to a listed place.
Financing
Intra-group loans ordinarily exempt from stamp duty lose that exemption where any lender, borrower or shareholder is resident in a listed jurisdiction.
Individuals
Investment income from a listed-jurisdiction entity is taxed at 35% rather than 28%.
The crypto holding-period exemption, which ordinarily exempts gains after twelve months, does not apply where the exchange is incorporated in a listed jurisdiction.
The IFICI foreign-income exemption contains a corresponding carve-out, taxing such income at 35%.
Reporting and time limits
Banks and payment service providers report cross-border transfers to the tax authority each year.
More important is the assessment period. The tax authority normally has four years to issue an assessment. That extends to twelve years where the matter concerns a listed jurisdiction and something that should have been declared was not.
Litigation position
Portugal maintains double tax treaties with eight jurisdictions it lists as tax havens, and those treaties contain exchange of information articles.
A number of listed jurisdictions participate in the OECD Convention on Mutual Administrative Assistance and in automatic exchange of financial account information, and several hold a “largely compliant” Global Forum rating, which is the rating Portugal holds.
That inconsistency has begun to produce adverse decisions for the tax authority.
Pending reform
On 25 June 2026, the Council of Ministers approved a bill, now before Parliament, seeking parliamentary authorisation to amend the listing requirements. It would automatically add every EU-blacklisted jurisdiction to the Portuguese list, bringing in Russia and Vietnam. It would also introduce a Pillar Two minimum-tax criterion capable of supporting the removal of some current entries.
More information is available here.
Practical points
Most issues arise from decisions made before a transaction is signed.
When investing and divesting, proper planning matters at both ends. A structure that works for the acquisition can be the wrong one for the exit when control changes.
For Portuguese corporate groups, exposure tends to appear during expansion, when new counterparties, financing arrangements or subsidiaries bring listed jurisdictions into the group without anyone flagging it.
Where old structures are concerned, the twelve-year assessment window means arrangements going back to 2014 may still be open.
For individuals, most exposure comes from ordinary portfolios that happen to include a fund, trust or crypto exchange based in a listed jurisdiction. We review portfolios, handle the reporting, and advise on property held through companies.
Finally, assessments based purely on where a counterparty is registered are increasingly vulnerable. Where an assessment rests solely on a counterparty’s listed status and a treaty is in force, advice should be obtained before payment. A number of these have been annulled on EU free movement of capital grounds, with refunds and interest.
The list as at August 2026
Anguilla
Antigua and Barbuda
Netherlands Antilles
Aruba
Ascension
Bahamas
Bahrain
Barbados
Belize
Bermuda
Bolivia
Brunei
Channel Islands (Alderney, Guernsey, Jersey, Great Sark, Herm, Little Sark, Brecqhou, Jethou, Lihou)
Cayman Islands
Cocos and Keeling Islands
Cook Islands
Costa Rica
Djibouti
Dominica
United Arab Emirates
Falkland Islands
Fiji Islands
Gambia
Grenada
Gibraltar
Guam
Guyana
Honduras
Jamaica
Jordan
Qeshm Islands
Kiribati
Kuwait
Labuan
Lebanon
Liberia
Maldives
Isle of Man
Northern Mariana Islands
Marshall Islands
Mauritius
Monaco
Montserrat
Nauru
Christmas Island
Niue
Norfolk Island
Sultanate of Oman
Pacific Islands not covered by other entries
Palau Islands
Panama
Pitcairn Island
French Polynesia
Puerto Rico
Qatar
Solomon Islands
American Samoa
Western Samoa
Saint Helena
Saint Lucia
Saint Kitts and Nevis
San Marino
Saint Pierre and Miquelon
Saint Vincent and the Grenadines
Seychelles
Eswatini
Svalbard (Spitsbergen archipelago and Bjørnøya)
Tokelau
Tonga
Trinidad and Tobago
Tristan da Cunha
Turks and Caicos Islands
Tuvalu
Vanuatu
British Virgin Islands
United States Virgin Islands
Yemen Arab Republic
Our comments
For groups paying dividends, interest or royalties abroad, for individuals holding assets through offshore entities and for owners of Portuguese property held via foreign structures, the listing rules translate directly into cost.
For assistance with the impact of the new rules or with future changes to the list, our tax team is available.
The subject matter addressed here is deliberately presented at a high level. The rules attaching to the list are spread across several tax codes and each carries conditions, thresholds, exceptions and anti-abuse provisions that are not set out in full, or in some cases at all.
Rates, thresholds and filing requirements are those understood to be in force at the date of publication and are subject to change, including under successive Budget legislation.
The composition of the list itself changes by ministerial order and should be verified against the consolidated text at the date of any transaction. Amending legislation is pending before Parliament and may alter the position described. Treaty positions differ between treaties and require verification case by case. Any decisions referred to are arbitral and bind only the parties to the proceedings in question.
Disclaimer
This publication or document contains general information and is not intended to be comprehensive nor to provide legal or tax advice or services. It should not be acted upon, relied upon, or used as a basis for any decision or action that may affect you or your business. Professional legal advice should be requested for specific cases. We do not undertake any continuing obligation to advise on future legal amendments or of the impact on the conclusions herein. Prior results do not guarantee a similar outcome. The contents of this publication or document may not be reproduced, in whole or in part, without the express consent of GFDL Advogados.
