Published on July 26 and entered into force yesterday, the expected Law 15/2010, of July 26, amends the Personal Income Tax Code, creating a new taxation regime for capital gains on securities, regardless of how long the securities were held for, at a tax rate of 20%.

We point out the new regime which considers only 50% of the positive balance of gains that is applicable to micro (a company that employs less than 10 people and which has an annual turnover or balance sheet not exceeding 2 million euros) and small companies (a company that employs less than 50 people and which has an annual turnover or balance sheet not exceeding 10 million euros) that are not listed nor publicly traded. 

The Tax Benefits Act was also amended to foresee an exemption regime to small investors residing in Portugal, whose annual positive balance resulting from the transmission of securities, bonds and other debt instruments, is less than EUR 500,00. 

The new tax rate of 20% applies at the date of capital gains or at the balance of capital gains on December 31, 2010? 

Unfortunately, this issue is not yet clarified. 

This Law is only available in the portuguese language. 

Abreu Advogados