There are two types of Investment Funds:
- securities– invest in stocks, bonds, or other real estate values
- real estate– invest in real estate
These funds can be divided into units, that can be:
- subscribed or bought;
- redeemed or sold.
These also result in distributed income.
Thus, there are three types of income that result from these funds:
- distributed income;
- edemption or liquidation of units;
- disposal of units.
National Securities Investment Funds
RESIDENT
- the distribution by these funds of income to resident individuals, earned out of a commercial activity, is income of Category E (capital income). It is subject to a withholding tax at a rate of 28% (or 22,4% in the case of a taxpayer resident in the Autonomous Region of the Azores). They do not have to be declared, but if they are aggregated, they must be declared.
Where to declare?
This income doesn’t need to be declared, since it is subject to withholding. They only need to be declared in the IRS declaration if you choose to aggregate. In this situation, you must declare it in Annex E, Table 4.B, Code E31.
- redemption (capital gains) - income of resident individuals, earned out of a commercial activity; income of Category G (capital gains and other increases in assets). It is subject to a special withholding tax at a fixed rate of 28% (or 22,4% if the taxpayer is resident in the Autonomous Region of the Azores). It doesn’t need to be declared, but if it is aggregated, it needs to be declared.
Where to declare?
You don’t have to declare it on the annual IRS declaration. However, if you choose to aggregate, you must declare it in Annex G, Table 10, Code G31; the option for the respective aggregation is made in Table 15 of the same annex.
You can opt for the aggregation in Table 15 of the same annex.
If the resident taxpayer opts for the aggregation, the negative balance between the capital gains and losses determined in a given year may be reported for the following five years and may be deducted from income of the same nature that the holder obtains during these five years.
onerous transfer or disposal of units – this income of resident individuals, earned out of a commercial activity; is subject to a definitive special rate of 28% and is a Category G income.
It’s mandatory to declare it in Annex G, Table 9, Code G22
