tax-law portugal
Maltese company with CEO living in Portugal. Where to pay corporate tax?
<p>An investor asked me this question a few days ago and I couldn't answer:</p>
<p>If a company based (thus paying taxes) in Malta has the CEO and some employees living in Portugal, is there any legal ground for Portugal to pretend company taxes to be paid in Portugal?</p>
<p>The investor was wondering if the fact that the decision-making part of the company (and some employees) are based in the country will cause problems.</p>

<p>International allocation of corporate taxes is a complex and technical issue. Normally, a firm hires a specialist international accounting firm to handle this issue for them.</p>
<p>Generally speaking, a corporation owes taxes where it does business, and not necessarily where it is incorporated or has its headquarters. One needs to consider all of the places where the corporation does business.</p>
<p>But, there are a variety of formulas for allocating a corporation's taxes between countries (based on sales, costs, employees, property ownership, transfer pricing, etc.), and frequently there is a rough justice formula established by tax treaty that applies.</p>
<p>The <a href="http://www.fbsmalta.com/docs/Portugal.pdf" rel="nofollow noreferrer">Malta-Portugal Tax Treaty</a> is obviously relevant. But, if the company also does business in countries other than Malta and Portugal, that may not be enough to resolve the question.</p>
<p>Far more facts than those found in the question would be relevant.</p>
<p>On the other hand, owing corporate taxes in more than one country is not normally something that a business would consider to be &quot;a problem.&quot; It is just the normal reality of daily life in a multi-national business, and it does not imply that the company will be paying taxes twice on the same income - sometimes it does, but often it doesn't or even results of fewer combined taxes than if the business was only in one country.</p>
