International treaty

2025 UK-Portugal Double Taxation Convention — not in force

Updated 17 October 2025

UK/Portugal Double Taxation Convention

Signed in London on 15 September 2025 

This Convention has not yet entered into force 

This shall happen upon completion of the procedures required by the law of both countries for the bringing into force of this Convention 

An announcement will be made when these procedures have been completed

CONVENTION BETWEEN THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND THE PORTUGUESE REPUBLIC FOR THE ELIMINATION OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL GAINS AND THE PREVENTION OF TAX EVASION AND AVOIDANCE

The United Kingdom of Great Britain and Northern Ireland and the Portuguese Republic,

Desiring to further develop their economic relationship and to enhance their co‑operation in tax matters,

Intending to conclude a Convention for the elimination of double taxation with respect to taxes on income and on capital gains without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance (including through treaty-shopping arrangements aimed at obtaining reliefs provided in this Convention for the indirect benefit of residents of third States),

Have agreed as follows:

CHAPTER I

SCOPE OF THE CONVENTION

Article 1

Persons Covered

1. 1.         This Convention shall apply to persons who are residents of one or both of the Contracting States.
2. 2.         This Convention shall not affect the taxation, by a Contracting State, of its residents except with respect to the benefits granted under paragraph 2 of Article 9 and Articles 18, 19, 21, 22, 23 and 26.

Article 2

Taxes Covered

1. 1.         This Convention shall apply to taxes on income and on capital gains imposed on behalf of a Contracting State or of its political or administrative subdivisions or local authorities, irrespective of the manner in which they are levied.
2. 2.         There shall be regarded as taxes on income and on capital gains all taxes imposed on total income, or on elements of income, including taxes on gains from the alienation of movable or immovable property, as well as taxes on capital appreciation.
3. 3.         The existing taxes to which this Convention shall apply are in particular:
   1. a)       in Portugal:
      1. (i)      the personal income tax (Imposto sobre o Rendimento das Pessoas Singulares – IRS);
      2. (ii)     the corporate income tax (Imposto sobre o Rendimento das Pessoas Coletivas – IRC); and
      3. (iii)    the surtaxes on corporate income tax (derramas);
   2. (hereinafter referred to as “Portuguese tax”);
   3. b)      in the United Kingdom:
      1. (i)      the income tax;
      2. (ii)     the corporation tax; and
      3. (iii)    the capital gains tax;
   4. (hereinafter referred to as “United Kingdom tax”).
4. 4.         The Convention shall apply also to any identical or substantially similar taxes that are imposed after the date of signature of the Convention in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify each other of any significant changes that have been made in their taxation laws.

CHAPTER II

DEFINITIONS

Article 3

General Definitions

1. 1.         For the purposes of this Convention, unless the context otherwise requires:
   1. a)       the term “Portugal” when used in a geographical sense comprises the territory of the Portuguese Republic in accordance with both International Law and Portuguese legislation, including its territorial sea, as well as those maritime areas adjacent to the outer limit of the territorial sea, comprising the seabed and subsoil thereof, over which the Portuguese Republic exercises sovereign rights or jurisdiction;
   2. b)      the term “United Kingdom” means Great Britain and Northern Ireland but, when used in a geographical sense, means the territory and territorial sea of Great Britain and Northern Ireland and the areas beyond that territorial sea over which Great Britain and Northern Ireland exercise sovereign rights or jurisdiction in accordance with both their domestic law and international law;
   3. c)       the terms “a Contracting State” and “the other Contracting State” mean Portugal or the United Kingdom as the context requires;
   4. d)      the term “tax” means Portuguese tax or United Kingdom tax, as the context requires;
   5. e)       the term “person” includes an individual, a company and any other body of persons;
   6. f)       the term “company” means any body corporate or any entity that is treated as a body corporate for tax purposes;
   7. g)      the term “enterprise” applies to the carrying on of any business;
   8. h)      the terms “enterprise of a Contracting State” and “enterprise of the other Contracting State” mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State;
   9. i)       the term “international traffic” means any transport by a ship or aircraft  except when the ship or aircraft is operated solely between places in a Contracting State and the enterprise that operates the ship or aircraft is not an enterprise of that State;
   10. j)       the term “competent authority” means:
       1. (i)      in Portugal, the Minister of Finance, the Director General of the Tax and Customs Authority or their authorised representative;
       2. (ii)     in the United Kingdom, the Commissioners for His Majesty’s Revenue and Customs or their authorised representative;
   11. k)      the term “national” means:
       1. (i)      in relation to Portugal, any individual possessing Portuguese nationality; and any legal person, partnership or association deriving its status as such from the laws in force in Portugal;
       2. (ii)     in relation to the United Kingdom, any British citizen, or any British subject not possessing the citizenship of any other Commonwealth country or territory, provided he has the right of abode in the United Kingdom; and any legal person, partnership or association deriving its status as such from the laws in force in the United Kingdom;
   12. l)       the term “business” includes the performance of professional services and of other activities of an independent character.
2. 2.         As regards the application of the Convention at any time by a Contracting State, any term not defined therein shall, unless the context otherwise requires or the competent authorities agree to a different meaning pursuant to the provisions of paragraph 3 of Article 25, have the meaning that it has at that time under the law of that State for the purposes of the taxes to which the Convention applies, any meaning under the applicable tax laws of that State prevailing over a meaning given to the term under other laws of that State.

Article 4

Resident

1. 1.         For the purposes of this Convention, the term “resident of a Contracting State” means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management, place of incorporation or any other criterion of a similar nature, and also includes that State and any political or administrative subdivision or local authority thereof. This term, however, does not include any person who is liable to tax in that State in respect only of income or capital gains from sources in that State.
2. 2.         Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined as follows:
   1. a)       he shall be deemed to be a resident only of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident only of the State with which his personal and economic relations are closer (centre of vital interests);
   2. b)      if the State in which he has his centre of vital interests cannot be determined, or if he does not have a permanent home available to him in either State, he shall be deemed to be a resident only of the State in which he has an habitual abode;
   3. c)       if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident only of the State of which he is a national;
   4. d)      if he is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.
3. 3.         Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, the competent authorities of the Contracting States shall endeavour to determine by mutual agreement the Contracting State of which that person shall be deemed to be a resident for the purposes of this Convention.  In reaching agreement, due regard shall be had to that person’s place of effective management, its place of incorporation, the place of its head office, and any other relevant factors.  In the absence of such agreement, that person shall not be entitled to any benefits provided by this Convention, except those provided by Articles 21 (elimination of double taxation), 22 (non-discrimination), and 23 (mutual agreement procedure).

Article 5

Permanent Establishment

1. 1.         For the purposes of this Convention, the term “permanent establishment” means a fixed place of business through which the business of an enterprise is wholly or partly carried on.
2. 2.         The term “permanent establishment” includes especially:
   1. a)       a place of management;
   2. b)      a branch;
   3. c)       an office;
   4. d)      a factory;
   5. e)       a workshop; and
   6. f)       a mine, an oil or gas well, a quarry or any other place of extraction of natural resources.
3. 3.         A building site or construction or installation project constitutes a permanent establishment only if it lasts more than 12 months.
4. 4.         Notwithstanding the preceding provisions of this Article, the term “permanent establishment” shall be deemed not to include:
   1. a)       the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise;
   2. b)      the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery;
   3. c)       the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;
   4. d)      the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting information, for the enterprise;
   5. e)       the maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise, any other activity of a preparatory or auxiliary character;
   6. f)       the maintenance of a fixed place of business solely for any combination of activities mentioned in sub-paragraphs a) to e), provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character.
5. 5.         Paragraph 4 shall not apply to a fixed place of business that is used or maintained by an enterprise if the same enterprise or a closely related enterprise carries on business activities at the same place or at another place in the same Contracting State and
   1. a)       that place or other place constitutes a permanent establishment for the enterprise or the closely related enterprise under the provisions of this Article, or
   2. b)      the overall activity resulting from the combination of the activities carried on by the two enterprises at the same place, or by the same enterprise or closely related enterprises at the two places, is not of a preparatory or auxiliary character,
6. provided that the business activities carried on by the two enterprises at the same place, or by the same enterprise or closely related enterprises at the two places, constitute complementary functions that are part of a cohesive business operation.
7. 6.         For the purposes of paragraph 5, an enterprise is closely related to an enterprise if, based on all the relevant facts and circumstances, one has control of the other or both are under the control of the same persons or enterprises. In any case, an enterprise shall be considered to be closely related to an enterprise if one possesses directly or indirectly more than 50 per cent of the beneficial interest in the other (or, in the case of a company, more than 50 per cent of the aggregate vote and value of the company’s shares or of the beneficial equity interest in the company) or if a person or another enterprise possesses directly or indirectly more than 50 per cent of the beneficial interest (or, in the case of a company, more than 50 per cent of the aggregate vote and value of the company’s shares or of the beneficial equity interest in the company) in the two enterprises.
8. 7.         Notwithstanding the provisions of paragraphs 1 and 2, where a person – other than an agent of an independent status to whom paragraph 8 applies – is acting on behalf of an enterprise and has, and habitually exercises, in a Contracting State an authority to conclude contracts on behalf of the enterprise, that enterprise shall be deemed to have a permanent establishment in that State in respect of any activities which that person undertakes for the enterprise, unless the activities of such person are limited to those mentioned in paragraph 4 which, if exercised through a fixed place of business, would not make this fixed place of business a permanent establishment under the provisions of that paragraph.
9. 8.         An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely because it carries on business in that State through a broker, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business.
10. 9.         The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other.

Chapter III

TAXATION OF INCOME

Article 6

Income from Immovable Property

1. 1.         Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other State.
2. 2.         The term “immovable property” shall have the meaning which it has under the law of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources; ships and aircraft shall not be regarded as immovable property.
3. 3.         The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immovable property.
4. 4.         The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise.
5. 5.         The provisions of this Article shall also apply to income from associated movable property and from the provision of services for the maintenance or operation of immovable property.

Article 7

Business Profits

1. 1.         The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that permanent establishment.
2. 2.         Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment.
3. 3.         In determining the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the permanent establishment, including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere.
4. 4.         No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.
5. 5.         For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary.
6. 6.         Where profits include items of income or capital gains which are dealt with separately in other Articles of this Convention, then the provisions of those Articles shall not be affected by the provisions of this Article.

Article 8

Shipping and Air Transport

1. 1.         Profits of an enterprise of a Contracting State from the operation of ships or aircraft in international traffic shall be taxable only in that State.
2. 2.         The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an international operating agency.

Article 9

Associated Enterprises

1. 1.         Where
   1. a)       an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, or
   2. b)      the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State,
2. and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly.
3. 2.         Where a Contracting State includes in the profits of an enterprise of that State – and taxes accordingly – profits on which an enterprise of the other Contracting State has been charged to tax in that other State and the profits so included are profits which would have accrued to the enterprise of the first-mentioned State if the conditions made between the two enterprises had been those which would have been made between independent enterprises, then that other State, if it agrees that the adjustment made by the first-mentioned State is justified both in principle and as regards the amount, shall make an appropriate adjustment to the amount of the tax charged therein on those profits. In determining such adjustment, due regard shall be had to the other provisions of this Convention and the competent authorities of the Contracting States shall if necessary consult each other.

Article 10

Dividends

1. 1.         Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State.
2. 2.         However, dividends paid by a company which is a resident of a Contracting State may also be taxed in that State according to the laws of that State, but if the beneficial owner of the dividends is a resident of the other Contracting State, the tax so charged shall not exceed:
   1. a)       10 per cent of the gross amount of the dividends, except as provided in sub-paragraph b);
   2. b)      15 per cent of the gross amount of the dividends where those dividends are paid out of income (including gains) derived directly or indirectly from immovable property within the meaning of Article 6 by an investment vehicle which distributes most of this income annually and whose income from such immovable property is exempted from tax.
3. 3.         Notwithstanding the provisions of paragraph 2 dividends paid by a company which is a resident of a Contracting State to a company which beneficially owns such dividends and which is a resident of the other Contracting State shall be taxable only in that other State if:
   1.  a)      the company which receives such dividends holds directly at least 10 per cent of the capital of the company paying the dividends for an uninterrupted period of at least one year containing the date on which the dividends are paid; and
   2. b)      each company is liable to the corporate income tax or, as the case may be, the corporation tax, without enjoying a general exemption from such liability.
4. 4.         The foregoing paragraphs shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.
5. 5.         The term “dividends” as used in this Article means income from shares, or other rights, not being debt-claims, participating in profits, as well as any other item which is treated as income from shares by the taxation laws of the Contracting State of which the company making the distribution is a resident. The term also includes profits attributed under an arrangement for participation in profits (“associação em participação”) within the meaning of Portuguese domestic law and income distributed by a “fundo de investimento imobiliário” or a “sociedade de investimento imobiliário” that is established and operates in accordance with the Portuguese domestic law and is taxed under Article 22 of the Tax Incentives Statute (Estatuto dos Benefícios Fiscais).
6. 6.         The provisions of paragraphs 1, 2 and 3 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment. In such case the provisions of Article 7 shall apply.
7. 7.         Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company, except insofar as such dividends are paid to a resident of that other State or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment situated in that other State, nor subject the company’s undistributed profits to a tax on the company’s undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in that other State.

Article 11

Interest

1. 1.         Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
2. 2.         However, interest arising in a Contracting State may also be taxed in that State according to the laws of that State, but if the beneficial owner of the interest is a resident of the other Contracting State, the tax so charged shall not exceed 10 per cent of the gross amount of the interest.
3. 3.         Notwithstanding the provisions of paragraph 2, the tax charged by a Contracting State on interest arising in that Contracting State shall not exceed 5 per cent of the gross amount of the interest if the interest is beneficially owned by a bank which is a resident of the other Contracting State and is established and regulated as such under the laws of that other Contracting State.
4. 4.         Notwithstanding the provisions of paragraphs 2 and 3, interest arising in a Contracting State shall be taxable only in the other Contracting State if the interest is beneficially owned by that other Contracting State, a political or administrative subdivision or local authority thereof, the central bank of that other Contracting State or any agency or instrumentality of any of the foregoing.
5. 5.         The term “interest” as used in this Article means income from debt-claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor’s profits, and in particular, income from government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures. Penalty charges for late payment shall not be regarded as interest for the purpose of this Article. The term shall not include any item which is treated as a dividend under the provisions of Article 10.
6. 6.         The provisions of paragraphs 1, 2, 3 and 4 shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises through a permanent establishment situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment. In such case the provisions of Article 7 shall apply.
7. 7.         Interest shall be deemed to arise in a Contracting State when the payer is a resident of that State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment, then such interest shall be deemed to arise in the State in which the permanent establishment is situated.
8. 8.         Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the interest exceeds, for whatever reason, the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention.

Article 12

Royalties

1. 1.         Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
2. 2.         However, royalties arising in a Contracting State may also be taxed in that State according to the laws of that State, but if the beneficial owner of the royalties is a resident of the other Contracting State, the tax so charged shall not exceed 5 per cent of the gross amount of the royalties.
3. 3.         The term “royalties” as used in this Article means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work including cinematograph films, any patent, trade mark, design or model, plan, secret formula or process, or for information (know-how) concerning industrial, commercial or scientific experience.
4. 4.         The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise through a permanent establishment situated therein, and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment. In such case the provisions of Article 7 shall apply.
5. 5.         Royalties shall be deemed to arise in a Contracting State when the payer is a resident of that State. Where, however, the person paying the royalties, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment in connection with which the liability to pay the royalties was incurred, and such royalties are borne by such permanent establishment, then such royalties shall be deemed to arise in the State in which the permanent establishment is situated.
6. 6.         Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the royalties exceeds, for whatever reason, the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention.

Article 13

Capital Gains

1. 1.         Gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 and situated in the other Contracting State may be taxed in that other State.
2. 2.         Gains derived by a resident of a Contracting State from the alienation of shares or comparable interests, such as interests in a partnership or trust, may be taxed in the other Contracting State if, at any time during the 365 days preceding the alienation, these shares or comparable interests derived more than 50 per cent of their value directly or indirectly from immovable property, as defined in Article 6, situated in that other State
3. 3.         Gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State, including such gains from the alienation of such a permanent establishment (alone or with the whole enterprise), may be taxed in that other State.
4. 4.         Gains that an enterprise of a Contracting State that operates ships or aircraft in international traffic derives from the alienation of such ships or aircraft, or of movable property pertaining to the operation of such ships or aircraft, shall be taxable only in that State.
5. 5.         Gains from the alienation of any property other than that referred to in paragraphs 1, 2, 3 and 4, shall be taxable only in the Contracting State of which the alienator is a resident.

Article 14

Income from Employment

1. 1.         Subject to the provisions of Articles 15, 17, 18 and 19, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.
2. 2.         Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if:
   1. a)       the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in any twelve month period commencing or ending in the fiscal year concerned, and
   2. b)      the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State, and
   3. c)       the remuneration is not borne by a permanent establishment which the employer has in the other State.
3. 3.         Notwithstanding the preceding provisions of this Article, remuneration derived by a resident of a Contracting State in respect of an employment exercised aboard a ship or aircraft operated in international traffic shall be taxable only in that State.

Article 15

Directors’ Fees

Directors’ fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors or supervisory board or of another similar organ of a company which is a resident of the other Contracting State may be taxed in that other State.

Article 16

Artistes and Sportsmen

1. 1.         Notwithstanding the provisions of Article 14, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as a sportsman, from his personal activities as such exercised in the other Contracting State, may be taxed in that other State.
2. 2.         Where income in respect of personal activities exercised by an entertainer or a sportsman in his capacity as such accrues not to the entertainer or sportsman himself but to another person, that income may, notwithstanding the provisions of Articles 7 and 14, be taxed in the Contracting State in which the activities of the entertainer or sportsman are exercised.

Article 17

Pensions

Subject to the provisions of paragraph 1 of Article 18, pensions and other similar remuneration paid to a resident of a Contracting State, shall be taxable only in that State.

Article 18

Government Service

1. 1.         Salaries, wages, pensions, and other similar remuneration paid by (or out of funds created by) a Contracting State (“the paying State”) or a political or administrative subdivision or a local authority thereof to an individual in respect of services rendered to the paying State or subdivision or authority thereof shall be taxable only in the paying State.  However, where that individual is a not a national of the paying State but is a national of the other Contracting State, such salaries, wages, pensions, and other similar remuneration may be taxed in both Contracting States.
2. 2.         The provisions of Articles 14, 15, 16, and 17 shall apply to salaries, wages, pensions, and other similar remuneration in respect of services rendered in connection with a business carried on by a Contracting State or a political or administrative subdivision or a local authority thereof.

Article 19

Students

Payments which a student or business apprentice who is or was immediately before visiting a Contracting State a resident of the other Contracting State and who is present in the first-mentioned State solely for the purpose of his education or training receives for the purpose of his maintenance, education or training shall not be taxed in that State, provided that such payments arise from sources outside that State.

Article 20

Other Income

1. 1.         Items of income beneficially owned by a resident of a Contracting State, wherever arising, not dealt with in the foregoing Articles of this Convention shall be taxable only in that State.
2. 2.         Notwithstanding the provisions of paragraph 1, where an amount of income is paid to a resident of Portugal out of income received by trustees or personal representatives administering the estates of deceased persons and those trustees or personal representatives are residents of the United Kingdom, that amount shall be treated as arising from the same sources, and in the same proportions, as the income received by the trustees or personal representatives out of which that amount is paid.
3. Any tax paid by the trustees or personal representatives in respect of the income paid to the beneficiary shall be treated as if it had been paid by the beneficiary.
4. 3.         The provisions of paragraph 1 shall not apply to income, other than income from immovable property as defined in paragraph 2 of Article 6, if the beneficial owner of such income, being a resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein, and the right or property in respect of which the income is paid is effectively connected with such permanent establishment. In such case the provisions of Article 7 shall apply.
5. 4.         Where, by reason of a special relationship between the resident referred to in paragraph 1 and some other person, or between both of them and some third person, the amount of the income referred to in that paragraph exceeds the amount (if any) which would have been agreed upon between them in the absence of such a relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such a case, the excess part of the income shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention.

CHAPTER IV

METHODS FOR ELIMINATION OF DOUBLE TAXATION

Article 21

Elimination of Double Taxation

1. 1.         Subject to the provisions of Portuguese law regarding the elimination of international double taxation (which shall not affect the general principle hereof), where a resident of Portugal derives income or capital gains which may be taxed in the United Kingdom in accordance with the provisions of this Convention (except to the extent that these provisions allow taxation by the United Kingdom solely because the income or capital gains are also income or capital gains derived by a resident of the United Kingdom), Portugal shall allow, as a deduction from the tax on the income of that resident, an amount equal to the tax on the income or capital gains paid in the United Kingdom. Such deduction shall not, however, exceed that part of the income tax, as computed before the deduction is given, which is attributable to the income or capital gains which may be taxed in the United Kingdom.
2. 2.         Subject to the provisions of the law of the United Kingdom regarding the allowance as a credit against United Kingdom tax of tax payable in a territory outside the United Kingdom or, as the case may be, regarding the exemption from United Kingdom tax of a dividend arising in a territory outside the United Kingdom or of the profits of a permanent establishment situated in a territory outside the United Kingdom (which shall not affect the general principle hereof):
   1. a)       Portuguese tax payable under the laws of Portugal and in accordance with this Convention, whether directly or by deduction, on profits, income or chargeable gains from sources within Portugal (excluding in the case of a dividend tax payable in respect of the profits out of which the dividend is paid) shall be allowed as a credit against any United Kingdom tax computed by reference to the same profits, income or chargeable gains by reference to which the Portuguese tax is computed;
   2. b)      a dividend which is paid by a company which is a resident of Portugal to a company which is a resident of the United Kingdom shall be exempted from United Kingdom tax when the exemption is applicable and the conditions for exemption under the law of the United Kingdom are met;
   3. c)       the profits of a permanent establishment in Portugal of a company which is a resident of the United Kingdom shall be exempted from United Kingdom tax when the exemption is applicable and the conditions for exemption under the law of the United Kingdom are met;
   4. d)      in the case of a dividend not exempted from tax under sub-paragraph b) above (because the conditions for exemption under the law of the United Kingdom are not met) which is paid by a company which is a resident of Portugal to a company which is a resident of the United Kingdom and which controls directly or indirectly at least 10 per cent of the voting power in the company paying the dividend, the credit mentioned in sub-paragraph a) above shall also take into account the Portuguese tax payable by the company in respect of its profits out of which such dividend is paid.
3. 3.         For the purposes of paragraphs 1 and 2, profits, income and gains owned by a resident of a Contracting State which may be taxed in the other Contracting State in accordance with this Convention shall be deemed to arise from sources in that other Contracting State.
4. 4.         The provisions of paragraph 2 shall not apply where the Portuguese tax payable is in accordance with the provisions of this Convention solely because the income referred to in that paragraph is also income derived by a resident of Portugal.
5. 5.         Where in accordance with any provisions of this Convention income or gains derived by a resident of a Contracting State are exempt from tax in that State, such State may nevertheless, in calculating the amount of tax on the remaining income or gains of such resident, take into account the exempted income or gains.

CHAPTER V

SPECIAL PROVISIONS

Article 22

Non-discrimination

1. 1.         Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances, in particular with respect to residence, are or may be subjected.
2. 2.         The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities.
3. 3.         Except where the provisions of paragraph 1 of Article 9, paragraph 8 of Article 11, paragraph 6 of Article 12, paragraph 4 of Article 20, or Article 27 apply, interest, royalties and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of the first-mentioned State.
4. 4.         Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of the first-mentioned State are or may be subjected.
5. 5.         Nothing contained in this Article shall be construed as obliging either Contracting State to grant to individuals not resident in that State any of the personal allowances, reliefs and reductions for tax purposes which are granted to individuals so resident or to its nationals.

Article 23

Mutual Agreement Procedure

1. 1.         Where a person considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with the provisions of this Convention, he may, irrespective of the remedies provided by the domestic law of those States, present his case to the competent authority of the Contracting State of which he is a resident or, if his case comes under paragraph 1 of Article 22, to that of the Contracting State of which he is a national. The case must be presented within three years from the first notification of the action resulting in taxation not in accordance with the provisions of the Convention.
2. 2.         The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation which is not in accordance with the Convention. Any agreement reached shall be implemented notwithstanding any time limits in the domestic law of the Contracting States.
3. 3.         The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Convention. They may also consult together for the elimination of double taxation in cases not provided for in the Convention.
4. 4.         The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs.
5. 5.         The Protocol to this Convention includes provisions for the arbitration of cases presented under paragraph 1.

Article 24

Exchange of Information

1. 1.         The competent authorities of the Contracting States shall exchange such information as is foreseeably relevant for carrying out the provisions of this Convention or to the administration or enforcement of the domestic laws concerning taxes of every kind and description imposed on behalf of the Contracting States, or of their political or administrative subdivisions or local authorities, insofar as the taxation thereunder is not contrary to the Convention. The exchange of information is not restricted by Articles 1 and 2. However, the exchange of information in relation to VAT and customs duties shall be excluded from the scope of this Article.
2. 2.         Any information received under paragraph 1 by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, the determination of appeals in relation to the taxes referred to in paragraph 1, or the oversight of the above. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions. Notwithstanding the foregoing, information received by a Contracting State may be used for other purposes when such information may be used for such other purposes under the laws of both States and the competent authority of the supplying State authorises such use.
3. 3.         In no case shall the provisions of paragraphs 1 and 2 be construed so as to impose on a Contracting State the obligation:
   1. a)       to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State;
   2. b)      to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State;
   3. c)       to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information the disclosure of which would be contrary to public policy.
4. 4.         If information is requested by a Contracting State in accordance with this Article, the other Contracting State shall use its information gathering measures to obtain the requested information, even though that other State may not need such information for its own tax purposes. The obligation contained in the preceding sentence is subject to the limitations of paragraph 3 but in no case shall such limitations be construed to permit a Contracting State to decline to supply information solely because it has no domestic interest in such information.
5. 5.         In no case shall the provisions of paragraph 3 be construed to permit a Contracting State to decline to supply information solely because the information is held by a bank, other financial institution, nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership interests in a person.

Article 25

Assistance in the Collection of Taxes

1. 1.         The Contracting States shall lend assistance to each other in the collection of revenue claims. This assistance is not restricted by Articles 1 and 2. However, claims related to VAT, customs duties and excise duties shall be excluded from the scope of this Article. The competent authorities of the Contracting States may by mutual agreement settle the mode of application of this Article.
2. 2.         The term “revenue claim” as used in this Article means an amount owed in respect of taxes of every kind and description (other than VAT, customs duties and excise duties) imposed on behalf of the Contracting States, or of their political or administrative subdivisions or local authorities, insofar as the taxation thereunder is not contrary to this Convention or any other instrument to which the Contracting States are parties, as well as interest, administrative penalties and costs of collection or conservancy related to such amount.
3. 3.         When a revenue claim of a Contracting State is enforceable under the laws of that State and is owed by a person who, at that time, cannot, under the laws of that State, prevent its collection, that revenue claim shall, at the request of the competent authority of that State, be accepted for purposes of collection by the competent authority of the other Contracting State. That revenue claim shall be collected by that other State in accordance with the provisions of its laws applicable to the enforcement and collection of its own taxes as if the revenue claim were a revenue claim of that other State.
4. 4.         When a revenue claim of a Contracting State is a claim in respect of which that State may, under its law, take measures of conservancy with a view to ensure its collection, that revenue claim shall, at the request of the competent authority of that State, be accepted for purposes of taking measures of conservancy by the competent authority of the other Contracting State. That other State shall take measures of conservancy in respect of that revenue claim in accordance with the provisions of its laws as if the revenue claim were a revenue claim of that other State even if, at the time when such measures are applied, the revenue claim is not enforceable in the first-mentioned State or is owed by a person who has a right to prevent its collection.
5. 5.         Notwithstanding the provisions of paragraphs 3 and 4, a revenue claim accepted by a Contracting State for purposes of paragraph 3 or 4 shall not, in that State, be subject to the time limits or accorded any priority applicable to a revenue claim under the laws of that State by reason of its nature as such. In addition, a revenue claim accepted by a Contracting State for the purposes of paragraph 3 or 4 shall not, in that State, have any priority applicable to that revenue claim under the laws of the other Contracting State.
6. 6.         Proceedings with respect to the existence, validity or the amount of a revenue claim of a Contracting State shall not be brought before the courts or administrative bodies of the other Contracting State.
7. 7.         Where, at any time after a request has been made by a Contracting State under paragraph 3 or 4 and before the other Contracting State has collected and remitted the relevant revenue claim to the first-mentioned State, the relevant revenue claim ceases to be
   1. a)       in the case of a request under paragraph 3, a revenue claim of the first-mentioned State that is enforceable under the laws of that State and is owed by a person who, at that time, cannot, under the laws of that State, prevent its collection, or
   2. b)      in the case of a request under paragraph 4, a revenue claim of the first-mentioned State in respect of which that State may, under its laws, take measures of conservancy with a view to ensure its collection
8. the competent authority of the first-mentioned State shall promptly notify the competent authority of the other State of that fact and, at the option of the other State, the first-mentioned State shall either suspend or withdraw its request.
9. 8.         In no case shall the provisions of this Article be construed so as to impose on a Contracting State the obligation:
   1. a)       to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State;
   2. b)      to carry out measures which would be contrary to public policy;
   3. c)       to provide assistance if the other Contracting State has not pursued all reasonable measures of collection or conservancy, as the case may be, available under its laws or administrative practice;
   4. d)      to provide assistance in those cases where the administrative burden for that State is clearly disproportionate to the benefit to be derived by the other Contracting State;
   5. e)       to provide assistance if that State considers that the taxes with respect to which assistance is requested are imposed contrary to generally accepted taxation principles.

Article 26

Members of Diplomatic Missions and Consular Posts

Nothing in this Convention shall affect the fiscal privileges of members of diplomatic missions or consular posts under the general rules of international law or under the provisions of special agreements.

Article 27

Entitlement to Benefits

Notwithstanding the other provisions of this Convention, a benefit under this Convention shall not be granted in respect of an item of income or a capital gain if it is reasonable to conclude, having regard to all relevant facts and circumstances, that obtaining that benefit was one of the principal purposes of any arrangement or transaction that resulted directly or indirectly in that benefit, unless it is established that granting that benefit in these circumstances would be in accordance with the object and purpose of the relevant provisions of this Convention.

CHAPTER VI

FINAL PROVISIONS

Article 28

Entry into Force

1. 1.         This Convention shall enter into force on the date of receipt of the later of the notifications, in writing, through diplomatic channels, conveying the completion of the internal procedures of each Contracting State required for that purpose.
2. 2.         The provisions of this Convention shall have effect:
   1. a)       in Portugal:
      1. (i)      in respect of taxes withheld at source, where the event giving rise to them occurs on or after the first day of January next following the date on which this Convention enters into force; and
      2. (ii)     in respect of other taxes, for taxable periods beginning on or after the first day of January next following the date on which this Convention enters into force;
   2. b)      in the United Kingdom:
      1. (i)      in respect of taxes withheld at source, for amounts paid or credited on or after the first day of January next following the date on which this Convention enters into force;
      2. (ii)     in respect of income tax and capital gains tax, for any year of assessment beginning on or after the sixth day of April next following the date on which this Convention enters into force; and
      3. (iii)    in respect of corporation tax, for any financial year beginning on or after the first day of April next following the date on which this Convention enters into force.
3. 3.         Notwithstanding the provisions of paragraph 2, the provisions of Article 23 (mutual agreement procedure), Article 24 (exchange of information) and Article 25 (assistance in the collection of taxes) shall have effect from the date of entry into force of this Convention, without regard to the taxable period to which the matter relates.
4. 4.         The Convention between the United Kingdom of Great Britain and Northern Ireland and Portugal for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, signed at Lisbon on 27 March 1968 (“the prior Convention”) and the Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of Portugal for the avoidance of double taxation on income derived from sea and air transport signed at Lisbon on 31 July 1961 (“the Agreement”) shall cease to have effect in respect of any tax with effect from the date upon which this Convention has effect in respect of that tax in accordance with the provisions of paragraph 2 of this Article and the prior Convention and the Agreement shall terminate on the last such date.  However, the prior Convention shall continue to have effect in respect of income arising before that date.

Article 29

Termination

1. This Convention shall remain in force until terminated by one of the Contracting States. Either Contracting State may terminate this Convention, through diplomatic channels, by giving notice of termination at least six months before the end of any calendar year beginning after the expiry of five years from the date of entry into force of this Convention.  In such event, this Convention shall cease to have effect:
   1. a)       in Portugal:
      1. (i)      in respect of taxes withheld at source, where the event giving rise to them occurs on or after the first day of January next following the date specified in the notice of termination; and
      2. (ii)     in respect of other taxes, for taxable periods beginning on or after the first day of January next following the date specified in the notice of termination;
   2. b)      in the United Kingdom:
      1. (i)      in respect of taxes withheld at source, for amounts paid or credited on or after the first day of January next following the date specified in the notice of termination;
      2. (ii)     in respect of income tax and capital gains tax, for any year of assessment beginning on or after the sixth day of April next following the date specified in the notice of termination; and
      3. (iii)    in respect of corporation tax, for any financial year beginning on or after the first day of April next following the date specified in the notice of termination.

Article 30

Registration

The Contracting State in whose territory this Convention is signed shall transmit it to the Secretariat of the United Nations for registration, in accordance with Article 102 of the Charter of the United Nations, as soon as possible after its entry into force, and shall notify the other Contracting State of the completion of this procedure, as well as of its registration number.

IN WITNESS WHEREOF the undersigned, duly authorised thereto, have signed this Convention.

DONE at London on this 15th day of September 2025, in two originals, in the English and Portuguese languages, both texts being equally authoritative.

For the United Kingdom of Great Britain and Northern Ireland: Yvette Cooper

For the Portuguese Republic: Paulo Artur dos Santos de Castro de Campos Rangel

PROTOCOL TO THE CONVENTION BETWEEN THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND THE PORTUGUESE REPUBLIC FOR THE ELIMINATION OF DOUBLE TAXATION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL GAINS AND THE PREVENTION OF TAX EVASION AND AVOIDANCE

At the signing of the Convention between the United Kingdom of Great Britain and Northern Ireland and the Portuguese Republic for the elimination of double taxation with respect to taxes on income and on capital gains and the prevention of tax evasion and avoidance (hereinafter referred to as “the Convention”), the United Kingdom of Great Britain and Northern Ireland and the Portuguese Republic have agreed upon the following provisions, which shall form an integral part of the Convention:

1.         With reference to paragraph 2 of Article 13 (Capital Gains):

It is understood that the term “comparable interest” includes, in the case of Portugal, participation units in an undertaking for collective investment within the scope of Portugal’s domestic law.

2.         With reference to Article 23 (Mutual agreement procedure):

It is understood that:

Part I - Mandatory binding arbitration

1. 1.         Where:
   1. a)       under paragraph 1 of Article 23 (Mutual agreement procedure) of the Convention, a person has presented a case to the competent authority of a Contracting State on the basis that the actions of one or both of the Contracting States have resulted for that person in taxation not in accordance with the provisions of the Convention; and
   2. b)         the competent authorities are unable to reach an agreement to resolve that case pursuant to paragraph 2 of Article 23 (Mutual agreement procedure) of the Convention, within a period of three years beginning on the start date referred to in paragraph 8 or 9, as the case may be (unless, prior to the expiration of that period the competent authorities of the Contracting States have agreed to a different time period with respect to that case and have notified the person who presented the case of such agreement),
2. any unresolved issues arising from the case shall, if the person so requests in writing, be submitted to arbitration in the manner described in this Protocol, according to any rules or procedures agreed upon by the competent authorities of the Contracting States pursuant to the provisions of paragraph 10.
3. 2.         Where a competent authority has suspended the mutual agreement procedure referred to in paragraph 1 because a case with respect to one or more of the same issues is pending before court or administrative tribunal, the period provided in subparagraph b) of paragraph 1 will stop running until either a final decision has been rendered by the court or administrative tribunal or the case has been suspended or withdrawn. In addition, where a person who presented a case and a competent authority have agreed to suspend the mutual agreement procedure, the period provided in subparagraph b) of paragraph 1 will stop running until the suspension has been lifted.
4. 3.         Where both competent authorities agree that a person directly affected by the case has failed to provide in a timely manner any additional material information requested by either competent authority after the start of the period provided in subparagraph b) of paragraph 1, the period provided in subparagraph b) of paragraph 1 shall be extended for an amount of time equal to the period beginning on the date by which the information was requested and ending on the date on which that information was provided.
5. 4. The following rules shall apply to the arbitration decision:          
   1. a)       the arbitration decision with respect to the issues submitted to arbitration shall be implemented through the mutual agreement concerning the case referred to in paragraph 1. The arbitration decision shall be final;
   2. b)      the arbitration decision shall be binding on both Contracting States except in the following cases:
      1. (i)      if a person directly affected by the case does not accept the mutual agreement that implements the arbitration decision. In such a case, the case shall not be eligible for any further consideration by the competent authorities. The mutual agreement that implements the arbitration decision on the case shall be considered not to be accepted by a person directly affected by the case if any person directly affected by the case does not, within 60 days after the date on which notification of the mutual agreement is sent to the person, withdraw all issues resolved in the mutual agreement implementing the arbitration decision from consideration by any court or administrative tribunal or otherwise terminate any pending court or administrative proceedings with respect to such issues in a manner consistent with that mutual agreement;
      2. (ii)     if a final decision of the courts of one of the Contracting States holds that the arbitration decision is invalid. In such a case, the request for arbitration under paragraph 1 shall be considered not to have been made, and the arbitration process shall be considered not to have taken place (except for the purposes of Parts III (Confidentiality of arbitration proceedings) and VII (Costs of arbitration proceedings) of this Protocol. In such a case, a new request for arbitration may be made unless the competent authorities agree that such a new request should not be permitted;
      3. (iii)    if a person directly affected by the case pursues litigation on the issues which were resolved in the mutual agreement implementing the arbitration decision in any court or administrative tribunal.
6. 5.         The competent authority that received the initial request for a mutual agreement procedure as described in subparagraph a) of paragraph 1 shall, within two calendar months of receiving the request:
   1. a)       send a notification to the person who presented the case that it has received the request; and
   2. b)      send a notification of that request, along with a copy of the request, to the competent authority of the other Contracting State.
7. 6.         Within three calendar months after a competent authority receives the request for a mutual agreement procedure (or a copy thereof from the competent authority of the other Contracting State) it shall either:
   1. a)       notify the person who has presented the case and the other competent authority that it has received the information necessary to undertake substantive consideration of the case; or
   2. b)      request additional information from that person for that purpose.
8. 7.         Where pursuant to subparagraph b) of paragraph 6, one or both of the competent authorities have requested from the person who presented the case additional information necessary to undertake substantive consideration of the case, the competent authority that requested the additional information shall, within three calendar months of receiving the additional information from that person, notify that person and the other competent authority either:
   1. a)       that it has received the requested information; or
   2. b)      that some of the requested information is still missing.
9. 8.         Where neither competent authority has requested additional information pursuant to subparagraph b) of paragraph 6, the start date referred to in paragraph 1 shall be the earlier of:
   1. a)       the date on which both competent authorities have notified the person who presented the case pursuant to subparagraph a) of paragraph 6; and
   2. b)      the date that is three calendar months after the notification to the competent authority of the other Contracting State pursuant to subparagraph b) of paragraph 5.
10. 9.         Where additional information has been requested pursuant to subparagraph b) of paragraph 6, the start date referred to in paragraph 1 shall be the earlier of:
    1. a)       the latest date on which the competent authorities that requested additional information have notified the person who presented the case and the other competent authority pursuant to subparagraph a) of paragraph 7; and
    2. b)      the date that is three calendar months after both competent authorities have received all information requested by either competent authority from the person who presented the case.
11. If, however, one or both of the competent authorities send the notification referred to in subparagraph b) of paragraph 7, such notification shall be treated as a request for additional information under subparagraph b) of paragraph 6.
12. 10.       The competent authorities of the Contracting States shall by mutual agreement, pursuant to Article 23 (Mutual agreement procedure) of the Convention, settle the mode of application of the provisions contained in this Protocol, including the minimum information necessary for each competent authority to undertake substantive consideration of the case. Such an agreement shall be concluded before the date on which unresolved issues in a case are first eligible to be submitted to arbitration and may be modified from time to time thereafter.
13. 11.       Notwithstanding the provisions of the preceding paragraphs:
    1. a)       any unresolved issue arising from a mutual agreement procedure case otherwise within the scope of the arbitration process provided for by this Protocol shall not be submitted to arbitration, if a decision on this issue has already been rendered by a court or administrative tribunal of either Contracting State;
    2. b)      if, at any time after a request for arbitration has been made and before the arbitration panel has delivered its decision to the competent authorities of the Contracting States, a decision concerning the issue is rendered by a court or administrative tribunal of one of the Contracting States, the arbitration process shall terminate.

Part II - Appointment of arbitrators

1. 1.         Except to the extent that the competent authorities of the Contracting States mutually agree on different rules, paragraphs 2 through 4 shall apply for the purposes of this Protocol.
2. 2.         The following rules shall govern the appointment of the members of an arbitration panel:
   1. a)       the arbitration panel shall consist of three individual members with expertise or experience in international tax matters;
   2. b)      each competent authority shall appoint one panel member within 60 days of the date of the request for arbitration under paragraph 1 of Part I (Mandatory binding arbitration) of this Protocol. The two panel members so appointed shall, within 60 days of the latter of their appointments, appoint a third member who shall serve as Chair of the arbitration panel. The Chair shall not be a national or resident of either Contracting State;
   3. c)       each member appointed to the arbitration panel must be impartial and independent of the competent authorities, tax administrations, and ministries of finance of the Contracting States and of all persons directly affected by the case (as well as their advisors) at the time of accepting an appointment, maintain his or her impartiality and independence throughout the proceedings, and avoid any conduct for a reasonable period of time thereafter which may damage the appearance of impartiality and independence of the arbitrators with respect to the proceedings.
3. 3.         In the event that the competent authority of a Contracting State fails to appoint a member of the arbitration panel in the manner and within the time periods specified in paragraph 2 or agreed to by the competent authorities of the Contracting States, a member shall be appointed on behalf of that competent authority by the highest ranking official of the Centre for Tax Policy and Administration of the Organisation for Economic Co-operation and Development that is not a national of either Contracting State.
4. 4.         If the two initial members of the arbitration panel fail to appoint the Chair in the manner and within the time periods specified in paragraph 2 or agreed to by the competent authorities of the Contracting States, the Chair shall be appointed by the highest ranking official of the Centre for Tax Policy and Administration of the Organisation for Economic Co-operation and Development that is not a national of either Contracting State.

Part III – Confidentiality of arbitration proceedings

1.         Solely for the purposes of the application of the provisions of this Protocol and of the provisions of the Convention and of the domestic laws of the Contracting States related to the exchange of information, confidentiality, and administrative assistance, members of the arbitration panel and a maximum of three staff per member (and prospective arbitrators solely to the extent necessary to verify their ability to fulfil the requirements of arbitrators) shall be considered to be persons or authorities to whom information may be disclosed. Information received by the arbitration panel or prospective arbitrators and information that the competent authorities receive from the arbitration panel shall be considered information that is exchanged under the provisions of the Convention related to the exchange of information and administrative assistance.

2.         The competent authorities of the Contracting States shall ensure that members of the arbitration panel and their staff agree in writing, prior to their acting in an arbitration proceeding, to treat any information relating to the arbitration proceeding consistently with the confidentiality and nondisclosure obligations described in the provisions of the Convention related to the exchange of information and administrative assistance and under the applicable laws of the Contracting States.

Part IV – Resolution of a case prior to the conclusion of the arbitration

1. For the purposes of this Protocol and the provisions of the Convention that provide for resolution of cases through mutual agreement, the mutual agreement procedure, as well as the arbitration proceeding, with respect to a case shall terminate if, at any time after a request for arbitration has been made and before the arbitration panel has delivered its decision to the competent authorities of the Contracting States:
   1. a)       the competent authorities of the Contracting States reach a mutual agreement to resolve the case; or
   2. b)      the person who presented the case withdraws the request for arbitration or the request for a mutual agreement procedure.

Part V – Type of arbitration process

1. 1.         Except to the extent that the competent authorities of the Contracting States mutually agree on different rules, the following rules shall apply with respect to an arbitration proceeding:
   1. a)       after a case is submitted to arbitration, the competent authority of each Contracting State shall provide any information that may be necessary for the arbitration decision to all panel members without undue delay. Unless the competent authorities of the Contracting States agree otherwise, any information that was not available to both competent authorities before the request for arbitration was received by both of them shall not be taken into account for purposes of the decision;
   2. b)      the arbitration panel shall decide the issues submitted to arbitration in accordance with the applicable provisions of the Convention and, subject to these provisions, of those of the domestic laws of the Contracting States. The panel members shall also consider any other sources which the competent authorities of the Contracting States may by mutual agreement expressly identify;
   3. c)       the arbitration decision shall be delivered to the competent authorities of the Contracting States in writing and shall indicate the sources of law relied upon and the reasoning which led to its result. The arbitration decision shall be adopted by a simple majority of the panel members. The arbitration decision shall have no precedential value.
2. 2.         Prior to the beginning of arbitration proceedings, the competent authorities of the Contracting States shall ensure that each person that presented the case and their advisors agree in writing not to disclose to any other person any information received during the course of the arbitration proceedings from either competent authority or the arbitration panel. The mutual agreement procedure under Article 23 (Mutual agreement procedure) of the Convention, as well as the arbitration proceeding under this Protocol, with respect to the case shall terminate if, at any time after a request for arbitration has been made and before the arbitration panel has delivered its decision to the competent authorities of the Contracting States, a person that presented the case or one of that person’s advisors materially breaches that agreement.

Part VI – Agreement on a different resolution

Notwithstanding paragraph 4 of Part I (Mandatory binding arbitration) of this Protocol, an arbitration decision pursuant to this Protocol shall not be binding on the Contracting States and shall not be implemented if the competent authorities of the Contracting States agree on a different resolution of all unresolved issues within three calendar months after the arbitration decision has been delivered to them.

Part VII – Costs of arbitration proceedings

In an arbitration proceeding under this Protocol, the fees and expenses of the members of the arbitration panel, as well as any costs incurred in connection with the arbitration proceedings by the Contracting States, shall be borne by the Contracting States in a manner to be settled by mutual agreement between the competent authorities of the Contracting States. In the absence of such agreement, each Contracting State shall bear its own expenses and those of its appointed panel member. The cost of the chair of the arbitration panel and other expenses associated with the conduct of the arbitration proceedings shall be borne by the Contracting States in equal shares.

Part VIII – Compatibility

1.         Any unresolved issue arising from a mutual agreement procedure case otherwise within the scope of the arbitration process provided for in this Protocol shall not be submitted to arbitration if the issue falls within the scope of a case with respect to which an arbitration panel or similar body has previously been set up in accordance with a bilateral or multilateral convention that provides for mandatory binding arbitration of unresolved issues arising from a mutual agreement procedure case.

2.         Nothing in this Protocol shall affect the fulfilment of wider obligations with respect to the arbitration of unresolved issues arising in the context of a mutual agreement procedure resulting from other conventions to which the Contracting States are or will become parties.

Part IX – Cases eligible for arbitration

1. The provisions of this Protocol shall apply only to issues arising under the provisions of Articles 5 (Permanent establishment), 7 (Business profits) and 9 (Associated enterprises) of the Convention, excluding:
   1. a)       cases concerning items of income or capital gains that are not taxed by a Contracting State either because they are not included in the taxable base in that Contracting State or because they are subject to an exemption or zero tax rate provided only under the domestic tax law of that Contracting State;
   2. b)      cases involving the conduct of a person directly affected by the case that, by final ruling resulting from legal or administrative proceedings, has been subject to a penalty for tax fraud, wilful default or gross negligence; for this purpose, penalties for tax fraud, wilful default or gross negligence shall include the penalties for tax crimes as well as for other serious tax infringements as defined by Article 23(3) of RGIT (Regime Geral das Infrações Tributárias), enacted by the Law 15/2001, of 5 June 2001. Any subsequent provisions replacing, amending or updating these provisions would also be comprehended;
   3. c)       cases involving the application of domestic general anti-avoidance rules or anti-abuse rules contained in the Convention. For this purpose, the Portuguese Republic´s domestic general anti-avoidance rules shall include Articles 38 and 39 of LGT (Lei Geral Tributária) enacted by the Decree‑Law 398/98, of 17 December 1998. Any subsequent rules replacing, amending or updating these anti-avoidance rules would also be comprehended;
   4. d)      cases eligible for arbitration under the Convention on the Elimination of Double Taxation in Connection with the Adjustment of Profits of Associated Enterprises (90/436/EEC), as amended, or under any other instrument of the European Union.

Part X – Entry into effect

Notwithstanding the provisions of paragraph 3 of Article 28 (Entry into force) of the Convention, the provisions of this Protocol shall have effect only with respect to cases presented to the competent authority of a Contracting State on or after the date of entry into force of the Convention.

3.         With reference to Articles 24 (Exchange of information) and 25 (Assistance in the collection of taxes)

The terms “VAT”, “customs duties” and “excise duties” are as defined by Article PVAT.3 of the Protocol on administrative cooperation and combating fraud in the field of value added tax and on mutual assistance for the recovery of claims relating to taxes and duties and the exchange of information for customs duties is covered by the Protocol on mutual administrative assistance in customs matters, attached to the Trade and Cooperation Agreement between the European Union and the European Atomic Energy Community, of the one part, and the United Kingdom of Great Britain and Northern Ireland, of the other part.

IN WITNESS WHEREOF the undersigned, duly authorised thereto, have signed this Protocol.

DONE at London on this 15th day of September 2025, in two originals, in the English and Portuguese languages, both texts being equally authoritative.

For the United Kingdom of Great Britain and Northern Ireland: Yvette Cooper

For the Portuguese Republic: Paulo Artur dos Santos de Castro de Campos Rangel