Tiago Marreiros Moreira, Partner of the Tax Practice, and Francisca de Landerset, Senior Associate in the same practice, are the authors of the article 'Management PEs in Portugal: finding a needle in a haystack?', published in the International Tax Review. In this piece, they examine the tax challenges involved in attributing profits to a management permanent establishment (PE) in Portugal.

Portugal has increasingly become a preferred destination for EU and non-EU nationals looking to relocate. This trend, which also includes directors and board members, raises an important tax question: a director’s move to Portugal may trigger the existence of a PE, even where the company has no physical presence or commercial activity in the country.

In the article, VdA’s lawyers highlight that strategic decision-making and the signing of contracts from Portugal can be decisive factors. They also note that profit attribution to a PE can be particularly complex in practice, especially in the absence of specific guidance from the Portuguese tax authorities. The authors therefore underline the importance of OECD guidance, supported by a robust functional analysis and thorough documentation, to ensure compliance and mitigate risk.

• Read the full article here.