The Double Taxation Agreement (DTA) between Portugal and Australia was signed in 2003 and came into effect in both countries in 2004. The agreement is intended to eliminate the double taxation of income and property that may arise for residents of one country when they have income or property in the other country.
Under the DTA, residents of Portugal who have income or property in Australia are subject to tax in Australia as non-residents. This means that they are subject to Australian tax only on income earned or property owned in Australia, and are not subject to tax in Portugal on the same income or property. Likewise, Australian residents with income or property in Portugal are taxed only in Portugal and are not subject to Australian tax on the same income or property.
The DTA also provides rules for determining the residence of individuals and companies for tax purposes. These rules help ensure that individuals and companies are not subject to tax in both countries on the same income or property.
In addition, the DTA includes provisions for the exchange of information between tax authorities in Portugal and Australia. This exchange of information helps to prevent tax evasion and ensure that taxes are correctly paid in the appropriate country.
Overall, the DTA between Portugal and Australia is an important agreement that helps to promote trade and investment between the two countries by eliminating double taxation of income and property. If you have income or property in either country, it is important to be aware of the rules and provisions of the DTA in order to ensure that you are paying the correct amount of tax in the appropriate country.