Answer ... Decree-Law No. 219/2001 of 4 August 2001, as amended by Law No. 109-B/2001 of 27 December 2001, Decree-Law No. 303/2003 of 5 December 2003, Law No. 107-B/2003 of 31 December 2003, Law No. 53-A/2006 of 29 December 2006 and Decree-Law No. 53/2020 of 11 August 2020 (the “Securitisation Tax Law”), establishes the tax regime applicable to securitisation transactions carried out under the Securitisation Law. Its main goal was to ensure a tax-neutral treatment of securitisation transactions set up by each of the securitisation vehicle types provided for in the Securitisation Law. Therefore, under articles 2(5) and 3(5) of the Securitisation Tax Law, there is no withholding tax on:
- payments made by the purchaser (a securitisation company (STC) or a securitisation fund (FTC) to the seller in respect of the purchase of the receivables;
- payments made by the obligors under the loans; and
- the payment of collections by the servicer (who is usually also the seller) to the purchaser.
The nature or the characteristics of the receivables and the location of the seller have no influence on the tax regime referred to above.
However, the purchaser must be an STC or FTC resident in Portugal for tax purposes to benefit from the special tax regime. There is no risk of recharacterisation of the deferred purchase price, as payments of collections are not subject to withholding tax.
Under article 4(1) of the Securitisation Tax Law, income generated by the holding (distributions) or transfer (capital gains) of the notes and units is generally subject to the Portuguese tax regime established for debt securities.
According to Circular No. 4/2014 issued by the Portuguese Tax Authorities and the order issued by the Secretary of State for Tax Affairs, dated 14 July 2014, in connection with tax ruling No. 7949/2014 disclosed by the tax authorities, the general tax regime for debt securities (as established in Decree-Law No. 193/2005 of 7 November 2005, as amended) also applies to income generated by the holding or transfer of securitisation notes issued by STCs under securitisation transactions.
Decree-Law No. 193/2005, as amended, is therefore applicable to securitisation notes, notably regarding the requirements for registration of securitisation notes in the relevant clearing systems and the exemption applicable to income obtained by non-resident holders of such securitisation notes. In this regard, payments of interest and principal on securitisation notes are exempt from Portuguese income tax, including withholding tax, provided that the relevant noteholder qualifies as a non-Portuguese resident having no permanent establishment in Portugal. This exemption does not apply to non-resident individuals or companies whose country of residence is any jurisdiction listed as a tax haven in Ministerial Order No. 150/2004 of 13 February 2004 (as amended from time to time) and with which Portugal does not have a double tax treaty or tax information exchange agreement in force, provided that the requirements and procedures for evidencing non-residence status are complied with. To qualify for the exemption, noteholders will be required to provide the direct registry entity with adequate evidence of non-residence status prior to the relevant interest payment date, according to the procedures required under Decree-Law No. 193/2005.
No specific tax accounting requirements need to be complied with by the seller under the securitisation tax regime. However, CMVM Regulation No. 1/2002 of 5 February 2002 sets forth the specific accountancy regime for FTCs, while CMVM Regulation No. 12/2002 of 18 July 2002 establishes specific accountancy rules for STCs (although the accounting procedure of this type of corporate entity follows the general Portuguese Accountancy Standards).
Pursuant to the Securitisation Tax Law, no stamp duty is due on the sale of receivables being securitised or on the fees and commissions that fall under article 5 (i.e., referring to required acts to ensure good management of the receivables and, if applicable, of the respective guarantees, and to ensure collection services, the administrative services relating to the receivables, all relations with the debtors and also maintaining, modifying and extinguishing acts related to guarantees, if any) and under article 24 (i.e., as to any of the described attributions of the depositary), both of the Securitisation Law, which may be charged by the servicer to the purchaser. In addition, no documentary taxes are due in Portugal.
The sale of receivables is exempt from value added tax (VAT) under articles 9(27)(a) and (c) of the Portuguese VAT Code, in line with articles 135(b) and (d) of the VAT Directive (EC Directive 2006/112/EC). Pursuant to the Securitisation Tax Law, no VAT is due on the administration or management of securitisation funds nor on the fees and commissions regarding management services falling under article 5 and transactions undertaken by depositary entities pursuant to article 24 of the Securitisation Law, as described above.
Considering the above, it is important to highlight that the purchase of receivables is qualified as a true sale transaction under the Securitisation Law, the purchaser being the legal owner of the receivables and therefore subject to tax in Portugal (namely in respect of income arising from the receivables). However, despite being viewed as an ordinary taxpayer, to ensure a tax-neutral treatment of securitisation transactions, the taxable income of the purchaser tends to be equivalent to zero for tax purposes, as the income payments made to the noteholders are tax-deductible (though subject to the Portuguese interest barrier rule).