Negotiated outcome reached on tax agreement between Finland and Portugal

Minister of Finance Alexander Stubb today received a letter from Portugal’s Minister of Finance Mário Centeno confirming Portugal’s commitment to a new tax agreement. Consequently, a negotiated outcome has been reached on the taxation of pension income.

“It is through taxation that we build the funding base of our welfare society. Taxation must be implemented fairly and efficiently. The work on reforming the tax agreement with Portugal was a long process. Negotiations have been going on for many years, and last August I took the matter for the first time to the ministerial level. This spring, we were even prepared for the termination of the present agreement. I am very satisfied that this work has yielded a successful outcome and that a new agreement will arise,” says Minister of Finance Alexander Stubb.

The details of the new agreement will be announced in connection with the signing of the agreement. Preparations for the signing of the agreement are under way, and Finland’s aim is to sign the agreement as soon as possible.

The existing agreement between Finland and Portugal dates from 1970. The reform of the agreement has been Finland’s goal for over two decades. The agreement is in many respects out-dated. It no longer corresponds to the current OECD model tax agreement, nor to the tax agreement policy followed by Finland. The reform of the article on the taxation of pensions is particularly long overdue. Finland has also sought the taxation of private-sector pensions in the source country. Currently, it is only possible to tax public-sector pensions in Finland. Tax agreements also ensure, in principle, that double taxation does not take place.

Inquiries:

Antero Toivainen, Senior Government Adviser, tel. +358 2955 30098, [email protected]
Minna Ojala, Ministerial Adviser, tel. +358 2955 30291, [email protected]
Suvi Aherto, Special Adviser to the Minister (Communications), tel. +358 50 349 6121, [email protected]