Taxation of Financial Products

WARRANTS

Income from warrant transactions – sale and exercise – is considered capital gain for IRS purposes.


In the case of the sale of warrants, the income subject to taxation is the positive difference between the sale value and the acquisition value.


The investor may choose to tax the positive balance of capital gains and losses at a withholding tax of 28% or to aggregate the capital gains of the remaining income.


RESIDENT

Capital gains

the positive annual balance of capital gains and losses resulting from transactions related to covered warrants will be taxed at a special rate of 28% (or 22,4% in the case of a taxpayer resident in the Autonomous Region of the Azores), without prejudice to the holder’s ability to opt for aggregation.

if the resident taxpayer opts for 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 the income of the same nature received by the holder during those five years.

if the taxpayer chooses to aggregate this income with all other accrued income, including it in the IRS declaration, the value of the gain is added to the remaining income to determine the applicable IRS rate.

Where to declare?

National assets – Annex G, Table 13, Code G52

Anexo G quadro 13 código G52

International assets – Annex J, Table 9.2B, Code G31

Anexo J quadro 9.2B código G31

NOT RESIDENT

Capital gains

The capital gains generated by the onerous transfer of covered warrants issued and negotiated in the Portuguese territory are exempt from IRS.


This exemption is not applicable if the non-resident holder is resident in a jurisdiction subject to a clearly more favorable tax regime, as included in the ordinance approved by the Minister of Finance that lists the TAX HAVEN

Back

Information of the responsibility of LexPoint – Informação Jurídica On-Line © Copyright 2022
All rights reserved by LexPoint, Lda
This text is purely informative and does not constitute or dispense consultation or support from specialized professionals.