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Municipal Property Transfer Tax (IMT) on VAT in real estate transactions
On 27 August 2009, the Portuguese Directorate-General of Taxation (DGCI) approved Circular no. 21/2009, revoking the previous administrative instructions concerning VAT as a basis for charging Municipal Property Transfer Tax (IMT), whenever the parties waive that tax in real estate transactions.
The issue in question dates back to the time of the previous property transfer tax, known as SISA, and focused on the interpretation of the IMT Code and the provision which states that IMT is charged on the contract price, including all charges that the buyer is obliged to pay, statutorily or contractually.
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