Changes to the Double Taxation Treaty between U.K. and Portugal

Changes to the Double Taxation Treaty between U.K. and Portugal

On 29 December 2025, the Portuguese Parliament formally approved, through Parliamentary Resolution No. 206-A/2025, the Convention for the Elimination of Double Taxation on Income and Capital Gains and the Prevention of Tax Evasion and Avoidance between Portugal and the United Kingdom (UK). Further, the Convention was ratified by Presidential Decree No. 124-A/2025, dated 29 December 2025. Portugal and the UK had signed the Convention in London on 15 September 2025.

Once in force, the new Convention will replace the one originally concluded in 1968. The new Convention shall enter into force on the date of receipt of the last written notification, through diplomatic channels, confirming that the internal legal requirements of the Contracting States necessary for this purpose have been fulfilled.

Details of the changes can be found here: https://share.google/W0qlILcFL3gmXIKE9

The new Convention incorporates the latest international standards on tax transparency and anti-abuse and introduces a number of significant changes compared to the existing framework. This Tax Alert highlights and summarizes the most relevant amendments.

 A summary of the Key differences between the OLD Treaty and the NEW Treaty are listed below:

Summary of Key Differences

Specific detail can be found on this link https://share.google/W0qlILcFL3gmXIKE9 and detailed guidance and advice should be sought from your lawyer or fiscal representative.

Practical Implications

• The new treaty will likely lower withholding taxes, improve clarity on cross-border investment returns, and reduce opportunities for treaty avoidance.
• Enhanced transparency and administrative cooperation will require stronger compliance and reporting for multinational enterprises and individuals.

Tax planning based on the old regime should be re-evaluated once the new treaty enters into force.