Tax benefits resulting from investment in Venture Capital / Private Equity Funds

Written by Verónica de Brito

According to Article 2 of the Tax Benefits Code, tax benefits are an exceptional measure implemented to safeguard relevant extra-fiscal public interests, involving a tax advantage or tax reduction when compared to the normal taxation regime. In this sense, tax benefits refer to advantages or incentives granted by the Government to reduce applied taxes. There are also other tax mechanisms focused on the promotion of tax exemptions and tax credits, among other forms of tax relief.

Pursuant to the Portuguese tax legislation, Venture Capital / Private Equity funds are covered by a set of tax benefits. One of the main benefits associated with this type of investment consists on exempting these instruments from Corporate Income Tax (CIT), provided that these are established and operated by national legislation, as stipulated in Article 23 of the Tax Benefits Code. 

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