New stamp duty exemption foreseen in regard to cash pooling in Portugal

International Tax Review is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

New stamp duty exemption foreseen in regard to cash pooling in Portugal

Sponsored by

cuatrecasas-logo-vector.png
Cash-pooling arrangements should increasingly become the preferred way to manage the treasury

As the final version of the State Budget Law for 2020 has finally been approved, Diogo Ortigão Ramos and João Pedro Russo of Cuatrecasas explain the changes made to stamp duty on the taxation cash pooling mechanisms.

Recently approved, the Portuguese State Budget Law for 2020 (the State Budget) introduced some changes to the stamp duty (SD) code. It foresees, among other minor amendments and clarifications, for a new exemption specifically applicable to cash pooling arrangements (i.e., arrangements in which two or more companies comprising a group, the participants, agree on the centralisation of their treasury management functions with a third party, usually a bank, which will be in charge of balancing the accounts of each entity in the cash pool).

Indeed, the State Budget introduces a new exemption applicable to any loans with a maturity period of up to one year and granted within a cash pooling arrangement, provided that, among the participants, there is a dominant or group relationship, defined by the SD Code as a relationship in place between (i) a parent company and the subsidiaries in which the former entity owns, directly or indirectly, a minimum shareholding percentage of at least 75% of share capital and 50% voting rights, and (ii) the same subsidiaries themselves.



By introducing this new exemption with respect to cash pooling arrangements, the lawmaker seems to have struck a compromising balance between the need to ensure taxable income at the level of SD and the need to not fiscally burden Portuguese companies’ treasury functions. 



Pursuant to these changes, cash pooling arrangements deserve a fresh new look by corporate groups seeking for a tax efficient solution addressing their treasury needs, overcoming the uncertainty that still exists around the Portuguese tax authorities’ conservative approach to the tax treatment applicable to the provision of short-term loans. In a nutshell, this new exemption should be seen as good news to all stakeholders, as it will allow for greater levels of security in intra-group financing arrangements. Cash-pooling arrangements should increasingly become the preferred way to manage the treasury needs of corporate groups. 



Therefore, it is of the utmost importance to make sure that such arrangements are properly drafted and implemented, and that they are coherently aligned and compliant with the group’s transfer pricing policies.





Diogo Ortigão Ramos

T: +351 21 355 38 00

E: dortigaoramos@cuatrecasas.com



João Pedro Russo

T: +351 21 355 38 00

E: joao.russo@cuatrecasas.com

more across site & shared bottom lb ros

More from across our site

Levine, who served under the Joe Biden administration, led the US’s negotiations on the OECD’s two-pillar solution
The deal to acquire ITR's parent company is expected to complete by the end of May 2025
JBS, the biggest meat company in the world, allegedly used Luxembourgian ‘mailbox companies’ to avoid taxes between 2019 and 2022
Despite the conviction of Jessa Dabalos, the Tax Practitioners’ Board’s investigative work continues with five outstanding PwC scandal probes
Heads of tax need to push their teams forward as strategic business advisers to add value across their organisations, says Sandy Markwick
Scott Bessent reportedly felt undermined by Musk naming Gary Shapley as acting IRS commissioner; in other news, Baker Tilly will combine with a top 15 US firm
The promise of nine years’ tax certainty and a ‘rational and pragmatic’ government process makes APAs a no-brainer, Indian tax advisers tell ITR
Despite garnering significant revenues from multinationals, Italy’s digital services tax presents pressing double taxation issues, say Stefano Simontacchi and Francesco Saverio Scandone of BonelliErede
ITR’s research shows that in-house tax counsel in Asia also feel underserved by their advisers’ international networks
World Tax global head of research Jon Moore tells ITR how his team spots standout submissions, and gives early statistical insights into this year’s entries
Gift this article