Transfer Pricing guide: Portugal
Read below for more detailed information on transfer pricing regulations, document requirements, and other considerations for Portugal, as well as recent industry hot topics and key developments in the country's business landscape.
Page updated 1st July 2025
Transfer Pricing regulations
Is the jurisdiction part of OECD/G20 Inclusive Framework on BEPS?
Yes.
Relevant Transfer Pricing regulation
Article 63 of the Corporate Income Tax (CIT) Code; Ministerial Order No. 268/2021 of November 26; Ministerial Order No. 267/2021, of November 26; Article 130 of the CIT Code.
Is this regulation aligned with the OECD Guidelines
Yes.
Transfer Pricing documentation requirements
Documentation Threshold for Preparation of Local File/ TP Documentation
Mandatory for Portuguese taxpayers that have registered more than EUR 10,000,000 of revenues and at the same time register intercompany transactions amounting to EUR 100,000, per nature and related party, or in a global amount of EUR 500,000.
Documentation Threshold for Preparation of Master File
The same as for Local File (see above)
Documentation Threshold for Preparation of Country by Country Report
Group consolidated revenues equal to or higher than EUR 750,000,000.
Submission of Local File, Master File, and CbC Report Required? If so, when?
The Local File and Master File should be prepared until the 15th day of the 7th month after the fiscal year closing date.
It is only mandatory to submit TP Documentation to AT, for taxpayers belonging to the Large taxpayers unit or applying the tax consolidation regime in Portugal. So as a general rule Portuguese entities only have to prepare the TP documentation and maintain it to provide to AT in case of a tax audit.
In terms of CbC Report, there are to applicable Forms: 55 Form is the CbC Report and has to be submitted until 12 th month after the fiscal year closing date; 54 Form is to identify the reporting entity and has to be submitted until the 5th month after the fiscal year closing date.
If No Submission Required, any Other Deadline?
In case theres is no submission obligation, the TP Documentation should be prepared until the same deadline as previous answer.
Other Documentation Requirements
None.
Does TP documentation / Local file Need to be Prepared Contemporaneously with Tax Return Filing (i.e., before filing the return)?
No.
Transfer Pricing Specific Returns
Preparation of TP Return Required?
Yes, in appendix H of IES form.
Deadline for TP Return Filing
15th day of the 7th month after the fiscal year closing date.
Key information to be included in the TP Return
Controlled transactions amounts, related parties and TP methods used to define the intragroup prices.
Benchmarking - Local Tax Authority Preferences
Local vs Regional Comparables Set
Comparable entities from Iberian market are well acepted by AT.
Single-Year vs Multi-Year Analysis
Multi-year analysis.
Public vs Private Comparables
N/A
Interquartile Range or Full Range
Interquartile.
Transaction-Based or Aggregate Approach, or Both
Both.
How Often are Benchmarking Sets Renewed (financial update versus full scope BMS preparation)
Each benchmarking can be update two times, so should be renewed every 3 year period.
TP Penalties
In Case of Delayed Submission of Documentation
In terms of penalties regarding both compliance obligations (TP Documentation and CbC report), they can go up to EUR 10,000 per fiscal year where the obligation is not fulfilled.
In case of Income Adjustments in Course of a Tax audit
Normaly, a penalty is not applied in those situations.
Other Considerations
APA & MAP Availability
Yes.
Applicability of Safe Harbour Rules
In Portugal, the Advanced Pricing Agreement (APA) and Mutual Agreement Procedure (MAP) mechanisms serve as tools for managing transfer pricing disputes and ensuring compliance with tax regulations.
Critical Transfer Pricing Issues Prevailing in the Jurisdiction, if any
Unavailability of local comparables.
TP Method and comparables often challenged by Tax Authority, normally when prices/margins are not in the interquartile range.
Criteria/ Guidelines for Transfer Pricing Audit/ Assessments by Tax Authority
Periodically losing taxpayers are highly scrutinised by Tax Authority.
Relevant Regulations and Rulings with Respect to Thin Capitalisation or Debt Capacity in the Jurisdiction
Not applicable in Portugal.
On November 26, Ministerial Orders No. 267/2021 and No. 268/2021 were published, revising the framework governing advance pricing agreements (APAs) and regulating transfer pricing, respectively repealing Ordinances No. 620-A/2008, dated July 16, and No. 1446-C/2001, dated December 21.
Key updates introduced by Ministerial Order No. 268/2021, relating to transfer pricing regulations for transactions between a personal or corporate income tax taxpayer and any other entity:
- Detailed definition of the application of transfer pricing methods and the comparability analysis process, aligned with the OECD Transfer Pricing Guidelines (July 2017 edition);
- Determination of the median as the reference value for potential adjustments to be made by the Portuguese Tax and Customs Authority (Autoridade Tributária e Aduaneira – AT);
- Amendment of the thresholds that exempt taxpayers from preparing transfer pricing documentation, by introducing a dual criterion: (i) Taxpayers whose total annual income is below EUR 10,000,000 (previously EUR 3,000,000) for the relevant period (instead of the previous fiscal year); and (ii) Exemption from reporting related-party transactions below €100,000 per transaction per counterparty, and EUR 500,000 in aggregate amount;
- Introduction of a two-tier documentation model – Master File and Local File – with documentation considered compliant if it contains all relevant elements listed in Annex I of the Ministerial Order;
- Introduction of the concept of “Simplified File”, to be used by micro, small, and medium-sized enterprises, as defined by Decree-Law No. 372/2007, of November 6, that are required to prepare transfer pricing documentation. The Simplified File includes the following information: identification of the taxpayer and related parties, full description and details on the related party transactions, the transfer pricing method selected and comparable and arm’s length range;
- Incorporation of the three-year validity rule for comparability studies, as set out in the OECD Guidelines, while still requiring annual updates of financial data;
- Introduction of specific regulations for the application of the arm’s length principle to transactions related to intangibles and restructurings, considering the technical complexity of these transactions as well as the need to obtain certainty in the application of the arm’s length principle to these transactions and to avoid tax disputes.
- Requirement for third-party entities to state responsibility for the information and methods used in technical studies prepared at the taxpayer's request;
- Reaffirmation of the requirement to translate into Portuguese any documents submitted to the AT that are written in a foreign language, unless otherwise exempted;
- Expansion of the documentation requirements related to cost-sharing agreements and intragroup service arrangements;
- Introduction of specific requirements and procedures to be followed when submitting requests for mutual agreement procedures, in line with international best practices.
This Ministerial Order entered into force on November 27, except for Chapter IV, regarding documentation obligations, which applies to fiscal years beginning on or after January 1, 2021.
Main updates introduced by Ministerial Order No. 267/2021, of November 26, regarding the procedures for concluding Advance Pricing Agreements (APAs):
- Clarification and detailing of the various phases of the APA process (two phases: preliminary phase and proposal phase);
- Alignment of the maximum term of APAs with the amendments introduced to Article 138 of the Corporate Income Tax Code (four years);
- Possibility for the APA to cover prior fiscal years, provided that the relevant facts and circumstances of those periods are identical or similar, and no more than two years have passed since the legal deadline for submission;
- Establishment of a maximum period of three months before the deadline for submitting the agreement proposal to submit the preliminary assessment request, which should be made six months before the start of the first fiscal year to be covered by the agreement;
- Introduction of the possibility to terminate the APA evaluation procedure in the cases set out in the ordinance. In some of these cases, AT may be required to refund 25% of the agreement fee to the taxpayer;
- A 25% reduction in the agreement fee for micro, small, and medium-sized enterprises (SMEs).
This Ministerial Order entered into force on November 27, 2021.
The transfer pricing audit environment in Portugal is becoming increasingly complex and rigorous, reflecting a global trend towards heightened scrutiny of intercompany transactions. Audits are typically conducted as part of broader corporate income tax or VAT audits, with AT employing a framework established by the Income Tax Law and various regulations.
Portugal’s approach to transfer pricing enforcement is increasingly rigorous and aligned with international best practices.
Businesses with cross-border operations should ensure robust TP documentation and economic justification for all intercompany dealings.
AT has increasingly targeted intercompany transactions, especially:
- Intragroup services and cost allocations;
- Royalties and management fees;
- Financial transactions; and,
- Business restructurings and intangibles.
In terms of audit trends, TP audits have become more frequent and detailed, often involving:
- Requests for extensive documentation;
- Re-evaluation of comparables and profit allocation methods; and,
- Challenges to the economic substance of transactions.
AT typically uses the median of the arm’s length range as the reference point for adjustments.
Companies may be subject to adjustments, penalties, and interest if insufficient documentation or non-compliance is detected.
In Portugal, the Advanced Pricing Agreement (APA) and Mutual Agreement Procedure (MAP) mechanisms serve as tools for managing transfer pricing disputes and ensuring compliance with tax regulations.
An APA is a proactive agreement between a taxpayer and AT that establishes the transfer pricing methodology to be employed for specified transactions over a set period, thereby providing certainty and minimising the risk of double taxation.
To enter into an APA, taxpayers must demonstrate the relevance and appropriateness of their proposed transfer pricing methods and provide comprehensive documentation to support their application.
On the other hand, the MAP is designed to resolve disputes arising from the interpretation or application of tax treaties, particularly concerning transfer pricing adjustments.
Under the MAP, affected taxpayers can seek assistance from AT to negotiate and resolve issues with foreign tax authorities, ensuring that any double taxation resulting from differing interpretations of transfer pricing laws is mitigated. Both mechanisms require thorough documentation and adherence to specific procedural guidelines, thereby fostering transparency and cooperation between taxpayers and tax authorities in Portugal.
