Island Nations Agree to Share Financial Information with Portugal
A group of island nations has signed Tax Information Exchange Agreements (TIEAs) with Portugal, paving the way for automatic sharing of financial information between the two parties.
TIEAs Signed by Jurisdictions
The following jurisdictions have signed TIEAs with Portugal:
- Bermuda
- Cayman Islands
- Gibraltar
- Isle of Man
- Jersey
- Saint Lucia
These agreements will allow Portuguese authorities to access financial information of residents in these island nations, providing a crackdown on tax evasion and money laundering.
Reporting Requirements
Under the terms of the agreement, reporting financial institutions must report to the Portuguese Tax Authority (PTA) by July 31st each year. The reported information includes:
- Account holder details
- Account balance
- Income generated from assets held in the account
The reported information will cover accounts with balances or values exceeding €50,000 held by individuals or entities residing in Portugal.
DAC 7 Digital Platform Reporting Rule
A new digital platform reporting rule, known as DAC 7, has been implemented in Portugal. Under this regime, reporting platform operators must report specific information to the PTA by January 31st each year, covering transactions with reportable sellers.
Key Dates for DAC 7 Reporting
- First declaration: January 2024 (covering calendar year 2023)
- Tax administrations exchange information between member states: End of February 2024
Consequences of Non-Compliance
Non-compliance with DAC 7 reporting obligations may result in penalties imposed by the PTA.
Impact on Tax Evasion and Money Laundering
The agreement marks a significant step forward in Portugal’s efforts to combat tax evasion and money laundering, and is expected to increase transparency and cooperation between island nations.