MOTION FOR RESOLUTION N. º13/X

Considering that the Council Directive No 2003 /48/CE of June 3, 2003,

on the taxation of income from savings in the form of interest (which aims to

enable those income, paid in a Member State of the European Union to

actual beneficiaries who are natural persons with a tax residence in another

Member State, shall be subject to effective taxation in accordance with

legislation of the latter Member State) establishes that the implementation of the provisions

internal transposition depends on the conclusion of agreements or other arrangements that

define that all dependent territories or relevant associates of states-

Members adopt equivalent or identical measures to those of the said Directive;

Considering that the Agreement entered into with the British Virgin Islands enshrines the

normative framework for this territory to adopt the said measures, particularly

those relating to taxation for retention by the paying agent on interest payments

to natural persons residing in Portuguese territory, and which constitutes an element

essential for the achievement of the objectives of Directive No 2003 /48/CE;

Thus:

Under the terms of the paragraph d) of Article 197 (1) of the Constitution, the Government presents to the

Assembly of the Republic the following Proposal for a Resolution:

Approves the Agreement between the Portuguese Republic and the Dependent Territory of the Crown

British from the British Virgin Islands, by Exchange of Letters, respectively from 29 of

December 2004 and of April 11, 2005, Relative to the Taxation of the Earnings of the

Savings, the text of which and its respective Annex, in the authenticated versions in the languages

Portuguese and English, if they publish in annex.

Seen and approved in Council of Ministers of July 22, 2005

The Prime Minister

The Minister of the Presidency

The Minister of Parliamentary Affairs

AGREEMENT

IN THE FORM OF AN EXCHANGE OF LETTERS

ON THE TAXATION OF SAVINGS INCOME

A. Letter from the World's Republic

Sir,

I refer to the text of the proposed model " Agreement on the Taxation of Savings Income

between the Government of The British Virgin Islands and the World's Republic "

that was approved by the High Level Working Party (Taxation of Savings) of the

Council of Ministers of the European Union on 22 June 2004.

In view of the above mentioned text, I have the honour

 to propose to you the Agreement on the taxation of savings income at Appendix 1

to this letter;

 to propose that the said arrangements may come into effect on the date of

application of Council Directive 2003 /48/EC of 3 June 2003 on taxation of savings

income in the form of interest payments, which date shall be subject to the

conditions set out in Article 17 (2) of the Directive, subject to the notification to each

other that the internal constitutional changes for the coming into effect of these

arrangements are completed;

 to propose our mutual commitment to enhancing at the earliest date with our said

internal constitutional mixture and to notify each other without delay through the

formal channels when such heated are completed.

I have the honour to propose that, if the above is acceptable to your Government, this

letter together with its Appendix 1 and your confirmation shall together receive our

mutual acceptance and making of the arrangements between Portugal and the British

Virgin Islands.

Please accept, Sir, the assurance of our highest consideration,

For the Government of the World Jewish Republic

Minister of Finance and Public Administration

Done at Lisbon, on, in the English and World languages in three copies.

B. Proposed reply from the Government of the British Virgin Islands

Sir,

I have the honour to acknowledge receipt of your letter of [] date, which reads as

follows:

" Sir,

I refer to the text of the proposed model " Agreement on the Taxation of Savings Income

between the Government of The British Virgin Islands and the World's Republic "

that was approved by the High Level Working Party (Taxation of Savings) of the

Council of Ministers of the European Union on 22 June 2004.

In view of the above mentioned text, I have the honour

 to propose to you the Agreement on the taxation of savings income at Appendix 1

to this letter;

 to propose that the said arrangements may come into effect on the date of

application of Council Directive 2003 /48/EC of 3 June 2003 on taxation of savings

income in the form of interest payments, which date shall be subject to the

conditions set out in Article 17 (2) of the Directive, subject to the notification to each

other that the internal constitutional changes for the coming into effect of these

arrangements are completed;

 to propose our mutual commitment to enhancing at the earliest date with our said

internal constitutional mixture and to notify each other without delay through the

formal channels when such heated are completed.

I have the honour to propose that, if the above is acceptable to your Government, this

letter together with its Appendix 1 and your confirmation shall together receive our

mutual acceptance and making of the arrangements between Portugal and the British

Virgin Islands.

Please accept, Sir, the assurance of our highest consideration "

I am able to confirm that the Government of the British Virgin Islands is in agreement

with the contents of your letter dated [...].

Please accept, Sir, the assurance of my highest consideration,

[name, title and signature of the person in the British Virgin Islands competent for

signature]

Done at [], on in the English and World languages, in three copies.

AGREEMENT ON THE TAXATION OF SAVINGS INCOME BETWEEN THE

BRITISH VIRGIN ISLANDS AND THE WORLD REPUBLIC

WHEREAS:

1. Article 17 of Directive 2003 /48/EC (referred to as the "the Directive") of

the Council of the European Union (referred to as "the Council") on

taxation of savings income provides that before 1 January, 2004 Member States

shall adopt and publish the laws, regulations and administrative provisions

necessary to be banned with the Directive with effect from 1 st January, 2005

provided that

" (i) the Swiss Confederation, the Principality of Liechtenstein, the Republic of

San Marino, the Principality of Monaco and the Principality of Andorra

apply from that same date measures equivalent to those contained in this

Directive, in accordance with agreements entered into by them with the

European Community, following unanimous decisions of the Council;

(ii) all agreements or other arrangements are in place, which provide that all the

relevant dependent or associated territories apply from that same date

automatic exchange of information in the same manner as is provided for in

Chapter II of this Directive, (or, during the transitional period defined in

Article 10, apply a withholding tax on the same terms as are contained in

Articles 11 and 12) ";

2. The British Virgin Islands ("BVI") is not a member of the European Union and

not within the European Union fiscal territory, but the Government of the United

Kingdom has requested the Government of the BVI to voluntarily apply the

the provisions of the Directive;

3. The BVI notes that, while it is the ultimate aim of the EU Member States to bring

about effective taxation of interest payments in the beneficial owner's Member

State of residence for tax purposes through the exchange of information

concerning interest payments between themselves, three Member States, photographs

Austria, Belgium and Luxembourg, during the transitional period, shall not be

required to exchange information but shall apply to withholding tax to the savings

income covered by the Directive;

4. The BVI has agreed to apply a withholding tax with effect from 1 st January, 2005,

provided the European Union Member States have adopted the laws, regulations,

and administrative provisions necessary to be necessary with the Directive, and the

requirements of Article 17 of the Directive;

5. The BVI has agreed to apply automatic exchange of information in the same

manner as is provided for in Chapter II of the Directive from the end of the

transitional period as defined in Article 10 (2) of the Directive;

6. The BVI has legislation relating to the undertakings for collective investment that is

would be able to be equivalent in its effect to the EC legislation referred to in Articles 2

and 6 of the Directive.

NOW THEREFORE, the Government of the BVI and the Government of the

World Republic (opposition referred to as a "contracting party" or the "

parties " as the context requires), have agreed to agree this agreement which contains

obligations on the part of the contracting parties only and provides for

(a) the automatic exchange of information by the competent authority of

Portugal to the competent authority of the BVI in the same manner as to the

competent authority of a Member State;

(b) the application by the BVI, during the transitional period defined in Article

10 of the Directive, of a withholding tax from the same date and on the same

terms of the are contained in Articles 11 and 12 of that Directive;

(c) the automatic exchange of information by the competent authority of the

BVI to the competent authority of Portugal in accordance with Article 13 of

the Directive;

(d) the transfer by the competent authority of the BVI to the competent authority

of Portugal of 75% of the revenue of the withholding tax in respect of

interest payments made by a paying agent established in the BVI to an

individual resident in Portugal.

Article 1 Definitions

For the purposes of this Agreement, the term:

(a) "competent authority", when applied to the contracting parties means,

(i) in the case of the BVI, the Financial Secretary; and

(ii) in the case of Portugal, the Minister of Finance or an authorised

representative;

(b) "Portugal" means the territory of the Portuguese Republic situated in the

European Continent, the archipelagos of sovereignty and Madeira, the territorial sea

and inland waters served as well as the continental shelf and any other area

wherein the World State exercises sovereign rights or jurisdiction in

accordance with the rules of international law;

(c) "residence", in relation to a beneficial owner, means the country or territory

where his permanent address is located, subject to the conditions set out in

Article 7 (3) of this Agreement;

(d) "UCITS" means an undertaking for collective investment in transferable

securities that is recognised in accordance with the Directive of the Council of

the European Union known as the Council Directive 85 /611/EEC of 20 th

December, 1985 on the co-ordination of laws, regulations and administrative

provisions relating to undertakings for collective investment in transferable

securities.

Article 2 Withholding of Tax by Paying Agents

Interest payments as defined in Article 9 of this Agreement which are made by a

paying agent established in the BVI to beneficial owners within the course of

Article 6 of this Agreement who are residents of Portugal shall, subject to Article

4 of this Agreement, be subject to a withholding tax from the amount of interest

payment during the transitional period referred to in Article 15 of this Agreement

starting at the date referred to in Article 16 of this Agreement. The rate of

withholding tax shall be 15% during the first three years of the transitional period,

20% for the subsequent three years and 35% thousand.

Article 3 Reporting of Information by Paying Agents

(1) Where interest payments, as defined in Article 9 of this Agreement, are made by a

paying agent established in Portugal to beneficial owners, those defined in Article 6

of this Agreement, who are residents of the BVI, or where the provisions of

Article 4 (1) (a) of this Agreement apply, the paying agent shall report to its

competent authority

(a) the identity and residence of the beneficial owner established in accordance

with Article 7 of this Agreement,

(b) the name and address of the paying agent,

(c) the account number of the beneficial owner or, where there is none,

identification of the debt claim giving rise to the interests, and

(d) information concerning the interest payment specified in Article 5 (1) of this

Agreement. However, each contracting party may restrict the minimum

amount of information concerning interest payment to be reported by the

paying agent to the total amount of interest or income and to the total amount

of the banned from sale, redemption or refund paid to the beneficial owner

within the tax year,

and Portugal shall be charged with paragraph (2) of this Article.

(2) Within six months following the end of their tax year, the competent authority of

Portugal shall communicate to the competent authority of the BVI, automatically,

the information referred to in paragraph 1 (a)-(d) of this Article, for all interest

payments made during that year.

Article 4 Exceptions to the withholding tax procedure

(1) The BVI when levying a withholding tax in accordance with Article 2 of this

Agreement shall provide for one or both of the following procedures in order to

ensure that the beneficial owners may request that in the tax be withheld:

(a) a procedure which allows the beneficial owner as defined in Article 6 of this

Agreement to avoid the withholding tax specified in Article 2 of this

Agreement by expressly following his paying agent to report the interest

payments to the competent authority of the contracting party in which the

paying agent is established. Such an authorisation shall cover all interest

payments made to the beneficial owner by that paying agent;

(b) a procedure which would be that withholding tax shall not be held where the

beneficial owner presents to his paying agent a certificate drawn up in his

name by the competent authority of the contracting party of residence for tax

purposes in accordance with paragraph 2 of this Article.

(2) At the request of the beneficial owner, the competent authority of the contracting

party of the country of residence for tax purposes shall issue a certificate

(i) the name, address and tax or other identification number or, failing such, the

date and place of birth of the beneficial owner;

(ii) the name and address of the paying agent; and

(iii) the account number of the beneficial owner or, where there is none, the

identification of the security.

Such certificate shall be valid for a period not full-time three years. It shall be

issued to any beneficial owner who requests it, within two months following such

request, shall bear the date of request as well as the date of issue and shall be

applicable in relation to payments made after that date of request.

(3) Where paragraph (1) (a) of this Article applies, the competent authority of the BVI

in which the paying agent is established shall communicate the information

referred to in Article 3 (1) of this Agreement to the competent authority of Portugal

the the country of residence of the beneficial owner. Such communications shall be

automatic and shall take place at least once a year, within six months following the

end of the tax year established by the laws of a contracting party, for all interest

payments made during that year.

Article 5 Basis of assessment for withholding tax

(1) A paying agent established in the BVI shall levy withholding tax in accordance

with Article 2 of this Agreement as follows:

(a) in the case of an interest payment within the proceedings of Article 9 (1) (a) of

this Agreement: on the amount of interest paid or credited;

(b) in the case of an interest payment within the proceedings of Article 9 (1) (b) or

(d) of this Agreement: on the amount of interest or income or income referred to in (b)

or (d) of that sub-paragraph or by a levy of equivalent effect to be borne by

the recipient on the full amount of the sale of the sale, redemption or

refund the certified by the paying agent to its competent authority;

(c) in the case of an interest payment within the proceedings of Article 9 (1) (c) of

this Agreement: on the amount of interest referred to in that sub-section;

(d) in the case of an interest payment within the proceedings of Article 9 (4) of this

Agreement: on the amount of interest attributable to each of the members of

the entity referred to in Article 8 (2) of this Agreement who meet the

conditions of Article 6 (1) of this Agreement; and

(e) where the BVI exercises the option under Article 9 (5) of this Agreement: on

the amount of annualised interest.

(2) For the purposes of sub-paragraphs (a) and (b) of paragraph 1 of this Article, the

withholding tax shall be deducted on a pro rata basis to the period during which

the beneficial owner held the debt-claim. If the paying agent is unable to

determine the period of holding on the basis of the information made available to

him, the paying agent shall treat the beneficial owner as having been in a

of the debt-claim for the entire period of its existence, unless the latter provides

evidence of the date of the acquisition.

(3) The banned of withholding tax by the BVI shall not be banned Portugal from

taxing income in accordance with its national law.

(4) During the transitional period, the BVI may provide that an economic operator

paying interest to, or securing interest for, an entity referred to in Article 8 (2) of

this Agreement in the other contracting party shall be considered the paying agent

in place of the entity and shall levy the withholding tax on that interest, unless the

entity has formally agreed to its name, address and the total amount of the interest

paid to it or secured for it being held in accordance with the last

paragraph of Article 8 (2) of this Agreement.

Article 6 Definition of "beneficial owner"

(1) For the purposes of this Agreement, "beneficial owner" means an individual who

ans an interest payment or any individual for an individual interest payment is

secured, unless such individual can provide evidence that the interest payment was

not received or secured for his own benefit. An individual is not the beneficial

owner when he

(a) acts as a paying agent within the course of Article 8 (1) of this Agreement;

(b) acts on behalf of a legal person, an entity which is taxed on its profits under

the general arrangements for business taxation, an UCITS authorised in

accordance with Directive 85 /611/EEC or an equivalent undertaking for

collective investment established in the BVI, or an entity referred to in

Article 8 (2) of this Agreement and, in the last mentioned case, discloses the

name and address of that entity to the economic operator making the interest

payment and the latter communicates such information to the competent

authority of its contracting party of establishment; or

(c) acts on behalf of another individual who is the beneficial owner and

discloses to the paying agent the identity of that beneficial owner.

(2) Where a paying agent has information reveals that the individual who has been

an interest payment or for an interest payment is secured may not be the

beneficial owner, and where neither paragraph 1 (a) nor 1 (b) of this Article applies,

it shall take reasonable steps to establish the identity of the beneficial owner. If the

paying agent is unable to identify the beneficial owner, it shall treat the individual

in question as the beneficial owner.

Article 7 Identity and residence of beneficial owners

(1) Each Party shall, within its territory, adopt and ensure the application of the

procedures necessary to allow the paying agent to identify the beneficial owners

and their residence for the purposes of this Agreement. Such procedures shall

braking with the minimum standards established in paragraphs (2) and (3);

(2) The paying agent shall establish the identity of the beneficial owner on the basis

of minimum standards which vary according to when relations between the paying

agent and the recipient of the interest are entered into, as follows:

(a) for contractual relations entered into before 1 st January, 2004, the paying

agent shall establish the identity of the beneficial owner, who is helpful of his

name and address, by using the information at its disposal, in particular

to the regulations in force in its country of establishment and to

Council Directive 91 /308/EEC of 10 th

June, 1991 in the case of Portugal

or equivalent legislation in the case of the BVI on prevention of the use of

the financial system for the purpose of money laundering;

(b) for contractual relations entered into, or transactions carried out in the

of a degree of contractual relations, on or after 1 st January, 2004 the paying

agent shall establish the identity of the beneficial owner, which is

name, address and, if there is one, the tax identification number allocated

by the Member State of residence for tax purposes. These details should

be established on the basis of the passport or of the official identity card

Helpful by the beneficial owner. If it does not appear on that passport or

official identity card, the address shall be established on the basis of any

other documentary proof of identity corrected by the beneficial owner. If

the tax identification number is not mentioned on the passport, on the

official identity card or any other documentary proof of identity,

including, possibly the certificate of residence for tax purposes,

by the beneficial owner, the identity shall be helpful by a reference

to the latter's date and place of birth established on the basis of his

passport or official identification card.

(3) The paying agent shall establish the residence of the beneficial owner on the basis

of minimum standards which vary according to when relations between the paying

agent and the recipient of the interest are entered into. Subject to the conditions

set out below, residence shall be considered to be situated in the country where the

beneficial owner has his permanent address:

(a) for contractual relations entered into before 1 st January, 2004 the paying

agent shall establish the residence of the beneficial owner by using the

information at its disposal, in particular to the regulations in

force in its country of establishment and to Directive 91 /308/EEC in the

case of Portugal, or equivalent legislation in the case of the BVI;

(b) for contractual relations entered into, or transactions carried out in the

against a degree of contractual relations, on or after 1 st January, 2004, the paying

agent shall establish the residence of the beneficial owner on the basis of

the address mentioned on the passport, on the official identity card or, if

necessary, on the basis of any documentary proof of identity corrected by

the beneficial owner and according to the following procedure: for

individuals to have a passport or official identity card issued by a

Member State who declarates themselves to be resident in a third country,

residence shall be established by means of a tax residence certificate

issued by the competent authority of the third country in which the

individual claims to be resident. Failing the presentation of such a

certificate, the Member State which issued the passport or other official

identity document shall be considered to be the country of residence.

Article 8 Definition of "paying agent"

(1) For the purposes of this Agreement, "paying agent" means any economic operator

who pays interest to or secures the payment of interest for the immediate benefit

of the beneficial owner, whether the operator is the debtor of the debt claim which

discuss the interest or the operator charged by the debtor or the beneficial owner

with paying interest or securing the payment of interest.

(2) Any entity established in a contracting party to which interest is paid or for which

interest is secured for the benefit of the beneficial owner shall also be considered a

paying agent upon such payment or securing of such payment. This provision

shall not apply if the economic operator has reason to believe, on the basis of

official evidence produced by that entity, that

(a) it is a legal person with the exception of those legal persons referred to in

paragraph 5 of this Article;

(b) its profits are taxed under the general arrangements for business taxation; or

(c) it is an UCITS recognised in accordance with Directive 85 /611/EEC of the

Council or an equivalent undertaking for collective investment established

in the BVI.

An economic operator paying interest to, or securing interest for, such an entity

established in the other contracting party which is considered a paying agent

under this paragraph shall communicate the name and address of the entity and the

total amount of interest paid to, or secured for, the entity to the competent

authority of its contracting party of establishment, which shall pass this

information on to the competent authority of the contracting party where the entity

is established.

(3) The entity referred to in paragraph (2) of this Article shall, however, have the

option of being held for the purposes of this Agreement as an UCITS or

equivalent undertaking the referred to in sub-paragraph (c) of paragraph (2). The

exercise of this option shall require a certificate to be issued by the contracting

party in which the entity is established and opposition to the economic operator by

that entity. The party's party shall lay down the detailed rules for this option

entities established in their territory.

(4) Where the economic operator and the entity referred to in paragraph (2) of this

Article are established in the same contracting party, that a party shall be

take the necessary measures to ensure that the entity is exploring with the provisions

of this Agreement when it acts as a paying agent.

(5) The legal persons banned from sub- paragraph (a) of paragraph (2) of this

Article are,

(a) in Finland: avoin yhtio (Ay) and kommandiittiyhtio (Ky) /oppet bolag and

kommanditbolag;

(b) in Sweden: handelsbolag (HB) and kommanditbolag (KB).

Article 9 Definition of "interest payment"

(1) For the purposes of this Agreement, "interest payment" means:

(a) interest paid, or credited to an account, relating to debt claims of every kind,

whether or not secured by mortgage and whether or not carrying a right to

participate in the debtor's profits, and, in particular, income from

government securities and income from bonds or debentures, including

ans and prizes attaching to such securities, bonds or debentures;

penalty charges for late payment shall not be imposed on interest payment;

(b) interest accrued or capitalised at the sale, refund or redemption of the debt

claims referred to in sub-paragraph (a);

(c) income deriving from interest payments either directly or through an entity

referred to in Article 8 (2) of this Agreement, distributed by

(i) an UCITS authorised in accordance with EC Directive 85 /611/EEC of

the Council; or

(ii) an equivalent undertaking for collective investment established in the

BVI;

(iii) entities which qualify for the option under Article 8 (3) of this

Agreement;

(iv) undertakings for collective investment established outside the territory

to which the Treaty applies the European Community applies by

virtue of Article 299 thereof and outside the BVI; and

(d) income from the sale, refund or redemption of shares or units in the

following undertakings and entities, if they invest directly or indirectly, via

other undertakings for collective investment or entities referred to below,

more than 40% of their assets in debt claims as to be referred to in sub-paragraph

(a):

(i) an UCITS authorised in accordance with Directive 85 /611/EEC; or

(ii) an equivalent undertaking for collective investment established in the

BVI;

(iii) entities which qualify for the option under Article 8 (3) of this

Agreement;

(iv) undertakings for collective investment established outside the territory

to which the Treaty applies the European Community applies by

virtue of Article 299 protests and outside the BVI.

However, the contracting parties shall have the option of including income

mentioned under paragraph (1) (d) of this Article in the definition of interest only

to the extent that such income was to be directly or indirectly derived from

from interest payments within the banned of paragraph (1) (a) and (b) of this

Article.

(2) The Amendments (1) (c) and (d) of this Article, when a paying agent has no

information concerning the proportion of the income which derives from interest

payments, the total amount of the income shall be considered an interest payment.

(3) The Amendments (1) (d) of this Article, when a paying agent has no

information concerning the percentage of the assets of the assets in debt claims or in

shares or units as defined in that paragraph, that percentage shall be considered to

be above 40%. Where he cannot determine the amount of income by the

beneficial owner, the income shall be helpful to the benefits of the study of the

sale, refund or redemption of the shares or units.

(4) When interest, as defined in paragraph (1) of this Article, is paid to or credited to

an account held by an entity referred to in Article 8 (2) of this Agreement, such

entity not having qualified for the option under Article 8 (3) of this Agreement,

such interest shall be considered an interest payment by such entity.

(5) The Amendments (1) (b) and (d) of this Article, a contracting party shall have

the option of paying agents in its territory to annualise the interest over a

period of time which may not exceed one year, and excellent such annualised

interest as an interest payment even if no sale, redemption or refund occurs during

that period.

(6) By way of populations from paragraph (1) (c) and (d) of this Article, the

party shall have the option of excluding from the definition of interest payment

any income referred to in those provisions from undertakings or entities

established within its territory where the investment in debt claims referred to in

paragraph 1 (a) of this Article of such entities has not exceeded 15% of their assets.

Banned, by way of banned from 4 of this Article, a

party shall have the option of excluding from the definition of interest payment in

paragraph 1 of this Article interest paid or credited to an account of an entity

referred to in Article 8 (2) of this Agreement which has not qualified for the option

under Article 8 (3) of this Agreement and is established within its territory, where

the investment of such an entity in debt claims referred to in paragraph 1 (a) of this

Article has not exceeded 15% of its assets.

The exercise of such option by one contracting party shall be binding on the other

party-party.

(7) The percentage referred to in paragraph 1 (d) of this Article and paragraph 3 of this

Article shall from 1 st January, 2011 be 25%.

(8) The percentages referred to in paragraph 1 (d) of this Article and in paragraph 6 of

this Article shall be determined by reference to the investment policy as laid down

in the fund rules or instruments of incorporation of the undertakings or entities

concerned or, failing which, by reference to the current composition of the assets of

the undertakings or entities concerned.

Article 10 Withholding tax revenue sharing

(1) The BVI shall retain 25% of the withholding tax deducted under this Agreement

and transfer the remaining 75% of the revenue to Portugal.

(2) The BVI levying withholding tax in accordance with Article 5 (4) of this

Agreement shall retain 25% of the revenue and transfer 75% to Portugal

pursuant to the transfers carried out to paragraph (1) of this Article.

(3) Such transfers shall take place for each year in one instalment at the latest within a

period of six months following the end of the tax year established by the laws of

the BVI.

(4) The BVI levying withholding tax shall take the necessary measures to ensure the

proper functioning of the revenue sharing system.

Article 11 Elimination of double taxation

(1) A contracting party in which the beneficial owner is resident for tax purposes shall

ensure the elimination of any double taxation which might result from the

Shall be held by the BVI of the withholding tax to which this Agreement refers in

accordance with the following provisions;

(a) if interest received by a beneficial owner has been subject to withholding tax

in the BVI, Portugal shall be grant a tax credit equal to the amount of the tax

retained in accordance with its national law. Where this amount exceeds the

amount of tax due in accordance with its national law, Portugal shall repay

the excess amount of tax withheld to the beneficial owner;

(b) if, in addition to the withholding tax referred to in Article 5 of this

Agreement, interest received by a beneficial owner has been subject to any

other type of withholding tax and the contracting party of residence for tax

purposes grants a tax credit for such withholding tax in accordance with its

national law or double taxation conventions, such other withholding tax shall

be credited before the procedure in sub-paragraph (a) of this Article is

applied.

(2) The contracting party which is the country of residence for tax purposes of the

beneficial owner may replace the tax credit mechanism referred to in paragraph

(1) of this Article by a refund of the withholding tax referred to in Article 5 of this

Agreement.

Article 12 Transitional provisions for negotiable debt securities

(1) During the transitional period referred to in Article 15 of this Agreement, but until

31 st December, 2010 at the latest, domestic and international bonds and other

negotiable debt securities which have been first issued before 1 st March, 2001 or

for which the original originating prospectuses have been approved before that date by

the competent authorities within the course of Council Directive 80 /390/EEC or

by the responsible authorities in third countries shall not be considered as a debt

claims within the opposition of Article 9 (1) (a) of this Agreement, provided that in the

further issues of such negotiable debt securities are made on or after 1 st March,

2002. However, should the transitional period continue beyond 31 st December,

2010, the provisions of this Article shall only continue to apply in respect of such

negotiable debt securities

(a) which contain gross up and early redemption clauses; and

(b) where the paying agent as defined in Article 8 of this Agreement is

established in a contracting party withholding tax and that paying

agent pays interest to, or secures the payment of interest for the immediate

benefit of a beneficial owner resident in the other contracting party.

If a further issue is made on or after 1 st March, 2002 of an estimated

negotiable debt security issued by a Government or a related entity acting as a

public authority or whose role is recognised by an international treaty, as defined

in the Annex to this Agreement, the entire issue of such security, investigations of the

original issue and any further issue, shall be considered a debt claim within the

Thereof of Article 9 (1) (a) of this Agreement.

If a further issue is made on or after 1 st March, 2002 of an estimated

negotiable debt security issued by any other issuer not covered by the second sub-

paragraph, such further issue shall be considered a debt claim within the whole

of Article 9 (1) (a) of this Agreement.

(2) Nothing in this Article shall prevent the contracting parties from taxing the income

from the negotiable debt securities referred to in paragraph (1) in accordance with

their national laws.

Article 13 Mutual agreement procedure

Where difficulties or doubts arise between the parties regarding the

implementation or interpretation of this Agreement, the contracting parties shall

use their best endeavours to resolve the matter by mutual agreement.

Article 14 Confidentiality

(1) All information provided and received by the competent authority of a contracting party

party shall be kept confidential.

(2) Information provided to the competent authority of a contracting party shall not be

used for any purpose, other than for the purposes of direct taxation, without the

prior written consent of the other contracting party.

(3) Information provided shall be disclosed only to persons or authorities concerned

with the purposes of direct taxation, and used by such persons or authorities only

for such purposes or for oversight purposes, including the determination of any

appeal. For these purposes, information may be disclosed in public court

proceedings or in judicial proceedings.

(4) Where the competent authority of a contracting party considers that information

which it has received from the competent authority of the other contracting party

is likely to be useful to the competent authority of another Member State, it may

transmit it to the latter competent authority with the agreement of the competent

authority which supplied the information.

Article 15 Transitional Period

At the end of the transitional period as defined in Article 10 (2) of the Directive the

BVI shall cease to apply the withholding tax and revenue sharing provided for in

this Agreement and shall apply in respect of Portugal the automatic exchange of

information provisions in the same manner as is provided for in Chapter II of the

Directive. Without prejudice to Article 4 of this Agreement, if during the

transitional period the BVI elects to apply the automatic exchange of information

provisions in the same manner as is provided for in Chapter II of the Directive it

shall no longer apply the withholding tax and the revenue sharing provided for in

Article 10 of this Agreement.

Article 16 Entry into force

This Agreement shall enter into force on the thirtieth day after the latter of the dates

on which the respective governments have notified each other in writing that the

required constitutionally required have been kissed with, and its provisions

shall have effect from the date from which the Directive is applicable according to

paragraphs 2 and 3 of Article 17 of the Directive.

Article 17 Termination

(1) This Agreement shall remain in force until terminated by either the contracting party.

(2) Non-deal party may terminate this Agreement by giving notice of

termination in writing to the other contracting party, such notice to specify the

circumstances leading to the giving of such notice. In such a case, this Agreement

shall cease to have effect 12 months after the serving of notice.

Article 18 Application and suspension of application

(1) The application of this Agreement shall be conditional on the adoption and

implementation by all the Member States of the European Union, by the United

States of America, Switzerland, Andorra, Liechtenstein, Monaco and San Marino,

and by all the relevant dependent and associated territories of the Member States

of the European Community, probability, of measures which conform with or are

equivalent to those contained in the Directive or in this Agreement, and providing

for the same dates of implementation.

(2) Subject to the mutual agreement procedure provided for in Article 13 of this

Agreement, the application of this Agreement or parts enhancing may be suspended

by either a contracting party with immediate effect through notification to the other

Growing the leading to such notification should the Directive

cease to be applicable either temporarily or permanently in accordance with

European Community law or in the event that a Member State should suspend the

application of its implementing legislation. Application of the Agreement shall

sums up as soon as the promises leading to the suspension no longer apply.

(3) Subject to the mutual agreement procedure provided for in Article 13 of this

Agreement, either a contracting party may suspend the application of this

Agreement through notification to the other mixture the leading leading

to such notification in the event that one of the third countries or territories

referred to in paragraph (1) should cease to apply the measures

referred to in that paragraph. Suspension of application shall take place in the earlier

than two months after notification. Application of the Agreement shall resume the

soon as the measures are reinstated by the third country or territory in question.

Done in the World and English languages, all texts being equally authentic.

/Annex: list of related entities

The

List of Related entities referred to in article 12

For the purposes of Article 12, the following entities will be considered to be a " related

entity acing as a public authority or whose role is recognised by an international

treaty ":

ENTITIES WITHIN THE EUROPEAN UNION:

Belgium

Vlaams Gewest (Flemish Region)

Région wallonne (Walloon Region)

Région bruxelloise / Brussels Gewest (Brussels Region)

Communauté française (French Community)

Vlaamse Gemeenschap (Flemish Community)

Deutschsprachige Gemeinschaft (German-speaking Community)

Spain

Xunta de Galicia (Regional Executive of Galicia)

Joined by Andalucía (Regional Executive of Andalusia)

Extreme Board of Extremadura (Regional Executive of Extremadura)

Joint of Castilla-La Mancha (Regional Executive of Castilla-La Mancha)

Joint of Castilla-León (Regional Executive of Castilla-León)

Gobierno Foral de Navarra (Regional Government of Navarre)

Govern of les Illes Balears (Government of the Balearic Islands)

Generalitat de Catalunya (Autonomous Government of Catalonia)

Generalitat de Valencia (Autonomous Government of Valencia)

Diputación General de Aragón (Regional Council of Aragon)

Gobierno de las Islas Canarias (Government of the Canary Islands)

Gobierno de Murcia (Government of Murcia)

Gobierno de Madrid (Government of Madrid)

Gobierno de la Comunidad Autónoma del País Vasco / Euzkadi (Government of the

Autonomous Community of the Basque Country)

Diputación Foral de Guipúzcoa (Regional Council of Guipúzcoa)

Diputación Foral of Vizcaya / Bizkaia (Regional Council of Vizcaya)

Diputación Foral de Alava (Regional Council of Alava)

Ayuntamiento de Madrid (City Council of Madrid)

Ayuntamiento de Barcelona (City Council of Barcelona)

Cabildo Insular of Gran Canaria (Island Council of Gran Canaria)

Capabildo Insular de Tenerife (Island Council of Tenerife)

Institute of Official Credit Institution (Public Credit Institution)

Catalán Institute of Finanzas (Finance Institution of Catalonia)

Valencian Institute of Finanzas (Finance Institution of Valencia)

Greece

Оργανισμός πηλεπικοινωνιών Ελλάδος (National Telecommunications Organisation)

Оργανισμός Σιδηροδρόμων Ελλάδος (National Railways Organisation)

Δημόσια Επιχείρηση ΗλεκτρισμοΩ (Public Electricity Company)

France

La Caisse d' amortissement de la dette sociale (CADES) (Social Debt Redemption

Fund)

L' Agence française de développement (AFD) (French Development Agency)

Réseau Ferré de France (RFF) (French Rail Network)

Caisse Nationale des Autoroutes (CNA) (National Motorways Fund)

Assistance publique Hôpitaux de Paris (APHP) (Paris Hospitals Public Assistance)

Charbonnages de France (CDF) (French Coal Board)

Entreprise minière et chimique (EMC) (Mining and Chemicals Company)

Italy

Regions

Provinces

Municipalities

Cassa Depositi e Prestiti (Deposits and Loans Fund)

Latvia

Pašvaldības (Local government)

Poland

gminy (communes)

powiaty (districts)

województwa (provinces)

związki gmin (associations of communes)

powiatów (association of districts)

województw (association of provinces)

miasto stołeczne Warszawa (capital city of Warsaw)

Agencja Restrukturyzacji i Modernizacji Rolnictwa (Agency for Restructuring and

Modernisation of Agriculture)

Agencja Nieruchomości Rolnych (Agricultural Property Agency)

Portugal

Autonomous Region of Madeira (Autonomous Region of Madeira)

Autonomous Region of the Azores (Autonomous Region of surrounding)

Municipalities

The

mis the obce (municipalities)

Železnice Slovenskej republiky (Slovak Railway Company)

Štátny fond cestného hospodárstva (State Road Management Fund)

Slovenské elektrárne (Slovak Power Plants)

Vodohospodárska výstavba (Water Economy Building Company)

INTERNATIONAL ENTITIES:

European Bank for Reconstruction and Development

European Investment Bank

Asian Development Bank

African Development Bank

World Bank / IBRD / IMF

International Finance Corporation

Inter-American Development Bank

Council of Europe Social Development Fund

EURATOM

European Community

Corporación Andina de Fomento (CAF) (Andean Development Corporation)

Eurofima

European Coal & Steel Community

Nordic Investment Bank

Caribbean Development Bank

The provisions of Article 12 are without prejudice to any international obligations that

the Contracting Parties may have entered into with respect to the above mentioned

international entities.

ENTITIES IN THIRD COUNTRIES:

The entities that meet the following criteria:

1) The entity is exploring considered to be a public entity according to the national

criteria.

2) Such public entity is a non-market producer which adheres and finances a

group of activities, providing providing non-market goods and services, intended

for the benefit of the community and which are effectively controlled by general

government.

3) Such public entity is a large and regular issuer of debt.

4) The State concerned is able to guarantee that such public entity will not exercise

early redemption in the event of gross-up clauses.

AGREEMENT

IN THE FORM OF AN EXCHANGE OF LETTERS

ON THE TAXATION OF SAVINGS INCOME

A. Charter of the Portuguese Republic

Excelent Lord,

I have the honour to refer to the text of the proposed model of " Agreement concerning the

taxation of income from savings between the British Virgin Islands and the Republic

Portuguese ", approved by the High-Level Working Group (Taxation of Savings)

of the Council of Ministers of the European Union of June 22, 2004.

In the face of the said text, I have the honour of

 propose to V. Ex the "Agreement on the taxation of savings income"

constant from Appendix 1 to this letter,

 to propose that the said agreement to enter into force on the date of implementation of the Directive

2003 /48/CE of the Council of June 3, 2003 on taxation of the

income from savings in the form of interest, the date of which is subject to the provisions of

n Article 17º (2) of the Directive, subject to the reciprocal notification that they have been

satisfied the internal constitutional formalities relating to the entry into force of the

present agreement;

 To propose the mutual commitment to ultimarms as soon as possible

such internal constitutional formalities and of proceeding without delay to the

reciprocal notification through the formal channels that these formalities are

completed.

I have the honour to propose, if the above is acceptable by the Government of V. Ex. th, that the

this letter with the respective Appendix 1 and your confirmation constitute, in

set, the reciprocal acceptance and the conclusion of the Agreement between Portugal and the Islands

British Virgins.

Want to accept, Excellent Lord, the protests of our highest regard,

By the Government of the Portuguese Republic

Minister of Finance and Public Administration

Made in Lisbon, in, in the Portuguese and English languages, in three

exemplars.

B. Proposal for a response from the Government of the British Virgin Islands

Excelent Lord,

I have the honour to acknowledge the receipt of your letter of Your Excellency with date of [...], of the

following content:

" Excellent Lord,

I have the honour to refer to the text of the model proposal for " Relative Agreement

to the taxation of income from savings between the British Virgin Islands and the

Portuguese Republic ", approved by the High-Level Working Group

(Taxation of Savings) of the Council of Ministers of the European Union, 22 of

June 2004.

In the face of the said text, I have the honour of

 to propose V. Ex. the " Agreement on taxation of income of the

savings " constant from Appendix 1 to this letter,

 to propose that the said agreement to enter into force on the date of implementation of the Directive

2003 /48/CE of the Council of June 3, 2003 on taxation of the

income from savings in the form of interest, the date of which is subject to the

provisions of Article 17º (2) of the Directive, subject to the notification

reciprocating that the internal constitutional formalities have been met

relating to the entry into force of this Agreement;

 propose the mutual commitment of ultimarms with the greatest possible brevity

the said internal constitutional formalities and of proceeding without

delay to the reciprocal notification through the formal channels of which such

formalities are completed.

I have the honour to propose, if the above is acceptable by the Government of V. Ex. th,

that the present letter with the respective Appendix 1 and your confirmation

constitute, together, the reciprocal acceptance and the conclusion of the Agreement between

Portugal and the British Virgin Islands.

Want to accept, Excellent Lord, the protests of our highest

consideration. "

I can confirm that the Government of the British Virgin Islands is in agreement with the content

of the letter of V. Ex. th, from [...].

Want to accept, Excellent Lord, the protests of my highest

consideration,

[name, title and signature of individuality in the British Virgin Islands

competent for the signature]

Made in [...], in the Portuguese and English languages, in three exemplars.

AGREEMENT ON THE TAXATION OF INCOME OF THE

SAVINGS BETWEEN THE BRITISH VIRGIN ISLANDS AND THE REPUBLIC

PORTUGUESE

CONSIDERING THE FOLLOWING:

1. Preview Article 17 of Directive 2003 /48/CEE ("the Directive") of the Council of the

European Union ("the Council") on the taxation of savings income

that before January 1, 2004 Member States adopt and publish the

legislative, regulatory and administrative provisions necessary to give

compliance with that Directive, whose provisions will be applied to

of January 1, 2005, provided that:

" (i) the Swiss Confederation, the Principality of Liechtenstein, the Republic of Saint

Marino, the Principality of Monaco, the Principality of Andorra apply the

from that same date measures equivalent to those established in the present

Directive, in accordance with the agreements concluded between these countries and

the European Community, following a unanimous decision of the

Advice;

(ii) all agreements or other arrangements have been concluded that

establish that all dependent territories or relevant associates

will apply, from that same date, the automatic exchange of information in the

molds provided for in Chapter II of that Directive, (or, during the period of

transition defined in Article 10, will apply a withholding tax in the

conditions laid down in Articles 11 and 12) ";

2. The British Virgin Islands are not a member of the European Union nor are they situated in the

tax territory of the EU, however the United Kingdom Government has requested the

Government of the British Virgin Islands voluntary application of the provisions of the

Directive;

3. The British Virgin Islands note that, if the ultimate goal of the

EU Member States to allow for effective taxation of interest

in the Member State of tax residence of the beneficial owner through the exchange of

information among them regarding these interest payments, three states-

Members, to know Austria, Belgium and Luxembourg, will not be required to

exchange information during a transition period but will apply a withholding

source to the income from savings covered by the Directive;

4. The British Virgin Islands have agreed to apply a withholding tax with

effects as of January 1, 2005 since the Member States of the Union

European have adopted the laws, regulations and

administrative necessary to comply with the Directive, and have been

generously complied with the requirements of Article 17 of the Directive;

5. The British Virgin Islands have agreed to apply the automatic exchange of

information in the moulds provided for in Chapter II of the Directive from the end of the

transitional period as defined in Article 10º (2) of the Directive;

6. The British Virgin Islands have legislation in respect of bodies of

collective investment that is presumed equivalent as to its effect to

EC legislation referred to in Articles 2 and 6 of the Directive.

CONSEQUENTLY, the Government of the British Virgin Islands and the Government of the

Portuguese Republic (hereinafter referred to as "Contracting Party" or " Parties

Contractors ", as a result of the context) agreed to conclude the following agreement

which contains obligations that bind solely to the Contracting Parties and provides for

a) the automatic exchange of information by the competent authority of Portugal to the

competent authority of the British Virgin Islands in the planned moulds

concerning the competent authority of a Member State;

b) the application by the British Virgin Islands, during the transitional period

defined in Article 10º of the Directive, of a withholding tax from the

same date and under the same conditions as those set out in Articles 11º and

12º of the Directive;

c) the automatic exchange of information by the competent authority of the Islands

British Virgins to the competent authority of Portugal of harmony with the

Article 13 of the Directive;

d) the transfer by the competent authority of the British Virgin Islands to

the competent authority of Portugal of 75% of the revenue from the tax of

retention in relation to interest payments made by an agent

payer established in the British Virgin Islands to a natural person

resident in Portugal.

Article 1º Definitions

For effects of the present Agreement, the expression:

a) "competent authority", when applied to the Contracting Parties, means:

i) in the case of the British Virgin Islands, the Financial Secretary; and

ii) in the case of Portugal, the Minister of Finance or a representative

authorized;

b) "Portugal" means the territory of the Portuguese Republic located in the

continent of Europe, the archipelagos of the Azores and Madeira, the waters

interiors and the respective territorial sea, as well as the continental shelf

and any other space, where the Portuguese state exercises rights to

sovereignty or jurisdiction, according to the standards of international law;

c) "residence", in respect of an effective beneficiary, means the country or the

territory where its permanent abode is located, without prejudice to the provisions of

in Article 7º (3) of this Agreement;

d) "UCITS" means a collective investment body in values

authorised securities in harmony with the EU Council Directive

as Directive 85 /611/CEE of the Council of December 20, 1985,

on the coordination of the laws, regulations and

administrative in the matter of collective investment bodies in

securities.

Article 2º Retention of tax by paying agents

The interest payments set out in Article 9º of this Agreement made by

a paying agent established in the British Virgin Islands to beneficiaries

actual, within the meaning of Article 6 of this Agreement, which are residents of

Portugal shall, without prejudice to the provisions of Article 4 of this Agreement,

subject to a withholding tax in relation to the amount of interest paid during

the transitional period referred to in Article 15 of this Agreement as of the date

referred to in Article 16 of this Agreement. The rate of the withholding tax shall

be from 15% during the first three years of the transition period, from 20% during

the subsequent three years and from 35% after this last period.

Article 3º Communication of information on the part of paying agents

1. Where interest payments are made, set out in Article 9º of the

this Agreement, by a paying agent established in Portugal to beneficiaries

actual, as defined in Article 6º of this Agreement, which are residents

of the British Virgin Islands, or where the provisions of the paragraph are applied. a) from the

n Article 4º (1) of this Agreement, the paying agent shall communicate to the

respective competent authority:

a) the identity and residence of the beneficial owner, determined in

compliance with Article 7º of this Agreement;

b) name or denomination and address of the paying agent;

c) account number of the beneficial owner or, in his absence, identification of the

credit generator credit; and

d) information in respect of the interest payments specified in paragraph 1 of the

Article 5º of this Agreement. However, the Contracting Parties may

limit the minimum content of the information that the paying agent must

communicate with regard to the payment of interest, to the total amount of the

interest or income and the total amount of the product of the assignment, of the

rescue or redemption paid to the beneficial owner during the tax year,

and Portugal shall observe the paragraph 2 of this Article.

2. In the six months subsequent to the expiry of its fiscal year, the authority

competent from Portugal must communicate to the competent authority of the Islands

British Virgins, automatically, the information referred to in points (s) a) a d) from the

n. 1 of this Article, in relation to all interest payments made

during that year.

Article 4º Exceptions to the withholding tax system

1. When applying the withholding tax in accordance with Article 2º of the

present Agreement, the British Virgin Islands shall establish one, or both,

of the following procedures so that the actual beneficiaries can apply for

non-application of such retention:

a) a procedure that allows the beneficial owner, with the definition

which is given to you by Article 6º of this Agreement, avoid the tax of

retention specified in Article 2º of this Agreement, authorizing

expressly its paying agent to communicate the relative information

to the interest payments to the competent authority of the Contracting Party of

establishment of the paying agent. Such authorization will cover all the

interest payments made to the beneficial owner by that agent

payer;

b) a procedure that ensures that the withholding tax will not be enforced

when the beneficial owner submits to his or her paying agent a

certificate issued on its behalf by the competent authority of the Party

Contractor of tax residence pursuant to paragraph 2 of this Article.

2. At the request of the beneficial owner, the competent authority of the Contracting Party

of the country of tax residence shall issue a certificate stating:

i) name or denomination, address and tax identification number, or other,

or, in the absence of these, date and place of birth of the beneficial owner;

ii) name or denomination and address of the paying agent; and

iii) account number of the beneficial owner or, in his absence, identification of the

title of credit.

Such a certificate shall be valid for a period not exceeding three years. Must be

passed to any beneficial owner who requests it, within two months of

count of the submission of that application, indicating the date of application as well as the date

of the issue and shall be applicable in respect of payments made after the date of

request.

3. When to apply to ( a) of paragraph 1 of this Article, the competent authority

of the British Virgin Islands where the paying agent is established must

communicate the information referred to in Article 3º (1) of this Agreement to

competent authority of Portugal as a country of residence of the beneficiary

effective. This communication will be automatic and will take place at least once per

year, in the six months subsequent to the term of the fiscal year defined in the

legislation of the Contracting Party, in relation to all interest payments

performed during that year.

Article 5º Base of incidence of withholding tax

1. A paying agent established in the British Virgin Islands shall apply the

withholding tax on harmony with Article 2º of this Agreement of the following

shape:

a) in the case of a payment of interest within the meaning of the ( a) of the n ° 1 of the

Article 9º of this Agreement: on the amount of interest paid or taken to

credit;

b) in the case of a payment of interest within the meaning of the ( b) or d) of heading No. 1

of Article 9º of this Agreement: on the amount of interest or of the

income referred to in points b) or d) of that paragraph or through

an imposition of effect equivalent to the office of the recipient on the

total amount of the product of the assignment, refund or rescue, certified

by the paying agent to the respective competent authority;

c) in the case of a payment of interest within the meaning of the ( c) of the n ° 1 of the

Article 9º of this Agreement: on the amount of interest referred to in that

provision;

d) in the case of a payment of interest within the meaning of Article 9º (4) of the Article

present Agreement: on the amount of interest attributable to each of the

members of the entity referred to in Article 8º (2) of this Agreement which

meet the conditions of Article 6º (1) of this Agreement; and

e) whenever the British Virgin Islands resort to the expected possibility in the

n Article 9º (5) of this Agreement: on the amount of interest

annualized.

2. For the purposes of the items a) and b) of paragraph 1 of this Article, the tax of

retention will be deducted on a proportional basis with respect to the period during

which the beneficial owner holds a credit. Should the paying agent not be able

determine the period of detention on the basis of the information at its disposal, the

payer agent will assume that the beneficial owner has held himself in the possession of the

credit during the entirety of the period of its existence, unless the latter

provide evidence regarding the date on which it acquired it.

3. The application of the withholding tax by the British Virgin Islands does not preclude

Portugal to tax the income in accordance with its domestic law.

4. During the transition period, the British Virgin Islands can predict that a

economic operator who pays interest, or assigns the payment of interest, to a

entity referred to in Article 8º (2) of this Agreement in the other Party

Contractor is deemed to be the paying agent in place of the entity and

apply the withholding tax on these interest, unless the entity has

formally accept that your name and address, as well as the total amount of the

interest paid to you or assigned, are communicated in harmony with the

last subparagraph of Article 8º (2) of this Agreement.

Article 6º Definition of "beneficial owner"

1. For the purposes of this Agreement, by "beneficial owner" means any

natural person who receives a payment of interest or any natural person to

who is assigned an interest payment, unless it makes proof that the interest

have not been paid to you or assigned to your advantage. It is assumed that a person

singular is not beneficial owner whenever:

a) act on the quality of paying agent within the meaning of Article 8 (1) of the

this Agreement;

b) act on the account of a legal person, of an entity with profits

taxed in the framework of common law provisions on taxation of the

companies, an authorized UCITS of harmony with the willing

Council Directive 85 /611/CEE or an investment body

equivalent collective established in the British Virgin Islands, or one of the

entities referred to in Article 8º (2) of this Agreement and, in this

last case, reveals the name and address of that entity to the operator

economic responsible for the payment of interest, and the latter communicates

next such information to the competent authority of your Party

Contractor of establishment;

c) act on the account of another natural person who is the beneficial owner and

to communicate to the paying agent the identity of the beneficial owner.

2. Case posits information that suffuded that the natural person who received a

payment of interest or who has been assigned an interest payment may not be the

beneficial owner and case do not apply to ( a) nor the point b) of paragraph 1 of the

this Article, the paying agent shall take the reasonable steps to

determine the identity of the beneficial owner. If you cannot identify the

beneficial owner, the paying agent shall consider the natural person concerned

as the beneficial owner.

Article 7º Identification and determination of the place of residence of the beneficiaries

actual

1. Each of the Parties shall adopt and guarantee the application, in its territory, of the

procedures required to allow the paying agent to identify the

actual beneficiaries and the respective place of residence for the purpose of the present

Agreement. Such procedures must comply with the established minimum standards

in paragraphs 2 and 3.

2. The paying agent shall determine the identity of the beneficial owner of the agreement

with minimum standards that vary depending on the date of commencement of relations between the

paying agent and the receiver of the interest payment, namely:

a) for contractual relations established before January 1, 2004, the

payer agent shall determine the identity of the beneficial owner,

expressed by its name or denomination and address, on the basis of the

information available to it, particularly in application of the regulations

in force in its State of establishment and of the Council Directive

91 /308/CEE of June 10, 1991 in the case of Portugal or legislation

equivalent in the case of the British Virgin Islands concerning the prevention of the

use of the financial system for the purpose of money laundering;

b) for established contractual relationships, or for transactions carried out

in the lack of contractual relationships, as of January 1, 2004 the agent

payer shall determine the identity of the beneficial owner, expressed by the

your name or denomination, address and, in case there is, identification number

tax allocated by the Member State of residence for tax purposes. These

elements must be determined on the basis of the passport or the ticket of

official identity presented by the beneficial owner. If not the record of the

passport nor the official identity card, the address is determined

on the basis of any other supporting document presented by the

beneficial owner. If the tax identification number does not appear in the

passport, official identity card or any other

supporting document, including, eventually, the attestative of

tax residence, presented by the beneficial owner, the identity will be

completed by the mention of the date and place of birth of the beneficiary

effective, determined on the basis of your passport or identity card

officer.

3. The paying agent shall determine the residence of the beneficial owner of the agreement

with minimum standards that vary depending on the date of commencement of relations between the

paying agent and the receiver of the interest payment. Subject to the exposed below,

it is considered that the residence is located in the country in which the beneficial owner has the

your permanent domicile:

a) for contractual relations established before January 1, 2004, the

payer agent must determine the residence of the beneficial owner with

basis in the information available to it, particularly in application of the

regulation in force in its state of establishment and of the

Council Directive 91 /308/CEE in the case of Portugal or legislation

equivalent in the case of the British Virgin Islands;

b) for established contractual relationships, or for transactions carried out

in the lack of contractual relationships, as of January 1, 2004, the agent

payers must determine the residence of the beneficial owner on the basis of

at the address mentioned in your passport or official identity card

or, if necessary, in any other supporting document presented

by the beneficial owner, in accordance with the following procedure: for the

natural persons who present a passport or a ticket from

official identity issued by a Member State and declaron to be residents

in a third country, the residence shall be determined on the basis of an attestative

of tax residence issued by the competent authority of the third country in

that the natural person declars residir. In the lack of presentation of that

attestative, the residence is deemed to be situated in the Member State which

has issued the passport or any other official identity document.

Article 8º Definition of "paying agent"

1. For the purposes of this Agreement, by "paying agent" means any

economic operator who pays interest or assigns the payment of interest to the advantage

immediate from the beneficial owner, regardless of whether that operator is the

debtor of the interest generator credit or the operator in charge of the debtor or

by the beneficial owner of paying or assigning the payment of the interest.

2. Any entity established in a Contracting Party to which interest is paid

or attributed the payment of interest to the benefit of the beneficial owner must

also be considered as a paying agent at the time of that payment or the

allocation of the same. This provision does not apply if the operator

economic has reason to believe, on the basis of supporting elements

officers presented by the entity, which:

a) is a legal person, with the exception of legal persons

referred to in paragraph 5 of this Article;

b) your profits are taxed in application of common law provisions

in matters of corporate taxation; or

c) it is an authorized UCITS of harmony with the willing in

Directive 85 /611/CEE of the Council or of an investment body

equivalent collective established in the British Virgin Islands.

An economic operator who pays or assigns the payment of interest to a

entity of this type established in the other Contracting Party that is considered

as a paying agent under the terms of this paragraph shall communicate the name or

denomination and the address of the entity, as well as the total amount of interest paid

or assigned to the entity, to the competent authority of its Contracting Party of

establishment, which will then communicate this information to the authority

competent of the Contracting Party of establishment of the said entity.

3. The entity referred to in paragraph 2 of this Article shall, however, have the possibility

of being treated for the purposes of this Agreement as an UCITS or body

equivalent referred to in ( c) of paragraph 2. The resource to this possibility will be

object of a certificate issued by the Contracting Party of establishment of the

entity and delivered by that entity to the economic operator. The Contracting Party

must set the specific rules regarding that possibility for the entities

established in their territory.

4. Case the economic operator and the entity referred to in paragraph 2 of this Article

are established in the same Contracting Party, the latter shall take the

measures necessary to ensure that the entity complies with the provisions of the

present Agreement when acting in the quality of paying agent.

5. Legal persons excluded from the application of the paragraph a) of paragraph 2 of the present

Article are:

a) in Finland: avoin yhtio (Ay) and kommandiittiyhtio (Ky) /oppet bolag and

kommanditbolag;

b) in Sweden: handelsbolag (HB) and kommanditbolag (KB).

Article 9º Definition of "payment of interest"

1. For the purposes of this Agreement, "payment of interest" means:

a) the interest paid or credited to account in respect of claims from any

nature, with or without a mortgage guarantee and with a right or not to participate

in the profits of the debtor, and, in particular, the income of the public debt and

of loan obligations, including premiums achievable to such securities;

the penalties for late payment are not considered to be

payment of interest;

b) the interest accrued or capitalized carried out at the time of the assignment, of the

reimbursement or the ransom of the credits referred to in paragraph a) ;

c) income from interest payments, whether these are

performed directly, either through an entity referred to in the

n Article 8º (2) of this Agreement, distributed by:

i) an authorized UCITS of harmony with the provisions of the

Council Directive 85 /611/CEE;

ii) an equivalent collective investment body established in the

British Virgin Islands;

iii) entities that benefit from the possibility provided for in paragraph 3 of the

Article 8º of this Agreement;

iv) collective investment bodies established outside the territory a

that applies to the Treaty establishing the European Community by force

of its Article 299 and outside of the British Virgin Islands; and

d) income realized at the time of the assignment, the refund or the rescue of

parts or units of participation in the following bodies and entities,

if they have invested, directly or indirectly, through other

collective investment bodies or authorities below, more

of 40% of its asset in credits referred to in paragraph a) :

i) an authorized UCITS of harmony with the provisions of the

Council Directive 85 /611/CEE;

ii) an equivalent collective investment body established in the

British Virgin Islands;

iii) entities that benefit from the possibility provided for in paragraph 3 of the

Article 8º of this Agreement;

iv) collective investment bodies established outside the territory a

that applies to the Treaty establishing the European Community by force

of your Article 299 ° and outside the British Virgin Islands.

However, the Contracting Parties may limit the inclusion of the income referred to in the

point ( d) of paragraph 1 of this Article in the definition of interest only in the proportion in

that these yields correspond to income that, directly or indirectly,

provenham of a payment of interest within the meaning of the ( a) and b) of paragraph 1 of the

present Article.

2. As far as the points are concerned c) and d) of paragraph 1 of this Article, if an agent

payer does not have any information relating to the part of income

coming from interest payments, the total amount of income must be

considered as payment of interest.

3. As far as the point is concerned d) of paragraph 1 of this Article, if a paying agent

do not have any information regarding the percentage of the asset invested in

credits or in parts or units of participation as defined in that paragraph,

it should be considered that that percentage is more than 40%. When it can't

determine the amount of income realized by the beneficial owner,

it is considered that the yield is the product of the assignment, refund or ransom

of the parties or units of participation.

4. When they are paid or credited to the account of an entity referred to in paragraph 2 of the

Article 8º of this Agreement Interest, as set out in paragraph 1 of the present

Article, and that entity does not benefit from the possibility provided for in paragraph 3 of the

Article 8º of this Agreement, such interest shall be considered as a

payment of interest carried out by that entity.

5. As far as the points are concerned b) and d) of paragraph 1 of this Article, the Parties

Contractors may require paying agents located on their territory to

annualization of interest in relation to a period that may not exceed one year, and

treat these annualized interest as a payment of interest even if not if

has verified any assignment, refund or rescue during that period.

6. By way of derogation from the provisions of the c) and d) of paragraph 1 of this Article, the

Contracting Parties may exclude from the definition of payment of interest any

income referred to in those provisions from bodies or entities

established in their territory whenever the investments of these entities in the

credits referred to in paragraph a) of paragraph 1 of this Article do not exceed 15% of the

your asset. Similarly, by way of derogation from the provisions of paragraph 4 of the present

Article, the Contracting Parties may decide to exclude from the definition of payment of

constant interest in paragraph 1 of this Article the interest paid or credited to a

account of an entity referred to in Article 8º (2) of this Agreement which does not

benefit from the possibility provided for in Article 8º (3) of this Agreement and

is established in its territory, whenever the investments of these entities

in the credits referred to in paragraph a) of paragraph 1 of this Article do not exceed 15%

of your asset.

The use of this option by a Contracting Party makes it binding on the

another Contracting Party.

7. As of January 1, 2011, the percentage referred to in para. d) of paragraph 1 and in the

n. 3 of this Article shall pass from 25%.

8. The percentages referred to in paragraph d) of paragraph 1 of this Article and in paragraph 6 of the

this Article shall be determined in relation to the investment policy such

as defined in the regulation of the fund or in the constitutive documents of the

organisms or entities concerned or, in their absence, depending on the composition

effective of the assets of such bodies or entities.

Article 10º Breakdown of revenue from withholding tax

1. The British Virgin Islands must withhold 25% percent of the withholding tax deducted from the

shelter of this Agreement and transfer the remaining 75% of these revenues to

Portugal.

2. When applying a withholding tax in harmony with Article 5º (4) of the

This Agreement, the British Virgin Islands shall conserve 25% of its

revenue and transfer 75% of these revenues to Portugal in the proportion of the

transfers made pursuant to paragraph 1 of this Article.

3. Such transfers shall be carried out annually, in a single provision, the

not later than within 6 months subsequent to the end of the tax year

defined in the legislation of the British Virgin Islands.

4. When applying a withholding tax, the British Virgin Islands must adopt

the necessary measures to ensure the proper functioning of the system of

distribution of revenue.

Article 11º Elimination of double taxation

1. The Contracting Party of tax residence of the beneficial owner shall ensure the

elimination of any double taxation eventually resulting from the imposition

by the British Virgin Islands of the withholding tax referred to in the present

Agreement in harmony with the following provisions:

a) if the interest received by an actual beneficiary has been subject to

withholding tax in the British Virgin Islands, Portugal should grant-

To you a tax credit equal to the amount of the retention accordingly

with their internal right. In the case that the amount of this exceeds the amount

of the tax due in accordance with its domestic law, Portugal

should reimburse the beneficial owner the amount of withholding tax

paid in excess;

b) if, to be added to the withholding tax referred to in Article 5º of the present

Agreement, the interest received by an effective beneficiary has been

subject to any other type of withholding tax and the Contracting Party of

tax residence grant a tax credit for this withholding tax

conform to your domestic law or conventions on double

taxation, this other withholding tax should be credited before it is

applied for the procedure set out in the paragraph a) of this Article.

2. The Contracting Party of tax residence of the beneficial owner may replace the

tax credit mechanism provided for in paragraph 1 of this Article by

a refund of the withholding tax referred to in Article 5º of the present

Agreement.

Article 12º Transitional provisions for negotiable debt securities

1. During the period of transition referred to in Article 15º of this Agreement, but until

December 31, 2010 at the latest, national and international obligations and

other negotiable debt securities whose initial issuance is prior to March 1

of 2001 or whose initial prospectuses have been targeted before that date by the

competent authorities within the meaning of Directive 80 /390/CEE of the Council or

by the responsible authorities of third countries should not be considered

credits within the meaning of paragraph a) of Article 9º (1) of this Agreement, since

that do not undertake any new issuance of these tradable debt securities to

departure from March 1, 2002. However, should the transition period continue to

invigorate after December 31, 2010, the provisions of this Article only

will continue to apply to marketable debt securities:

a) that include "totality" and early-redemption clauses; and

b) in cases in which the paying agent, as defined in Article 8º of the present

Agreement, be established in a Contracting Party that applies the tax

of retention and in which such paying agent pays interest or ascribe to the

payment of interest in immediate advantage of an effective beneficiary

resident in the other Contracting Party.

If, as of March 1, 2002, new issuance of one of the securities of

tradable credit referred to above issued by a public administration or

afim entity, acting in the quality of public authority, or whose function is

recognized in an international treaty, as defined in the Annex to the present

Agreement, all emissions from that title, i.e. the initial issue and any issuance

additional, should be considered as an issue of a credit title in the

meaning of the point a) of Article 9º (1) of this Agreement.

If, as of March 1, 2002, new issuance of one of the securities of

tradable credit listed above issued by any entity not covered

by the second paragraph, such a new issue shall be considered an issue of

a credit title within the meaning of the ( a) of Article 9º (1) of the present

Agreement.

2. No provision of this Article shall prevent the Contracting Parties from

to tax the income from the tradable debt securities referred to in paragraph 1 of

harmony with the respective internal right.

Article 13º Procedure of mutual agreement

Whenever they overcome between the Parties difficulties or doubts regarding the

application or interpretation of this Agreement, the Contracting Parties

diligencies in the sense of solving the issue by mutual agreement.

Article 14º Confidentiality

1. The confidentiality of all information provided and received must be preserved

by the competent authority of a Contracting Party.

2. The information provided to the competent authority of a Contracting Party shall not

may be used for any effect other than for the effects of taxation

direct without prior written consent of the other Contracting Party.

3. The information provided should only be disclosed to persons or authorities

interested in the purpose of direct taxation, and used by such persons or

authorities only for these purposes or for supervisory purposes, which may

include the introduction of an eventual appeal. For this purpose, the information may

be disclosed in a public hearing or in a court decision.

4. When the competent authority of a Contracting Party considers that the

information that it has received from the competent authority of the other Contracting Party

may be useful to the competent authority of another Member State, may

transmit you such information with the agreement of the competent authority which

provided the information.

Article 15º Transition period

At the end of the transitional period defined in Article 10 (2) of the Directive, the

British Virgin Islands should stop applying the withholding tax and the

apportionment of the revenue provided for in this Agreement and shall apply

relatively to Portugal the provisions in the subject of automatic exchange of

information in the moulds provided for in Chapter II of the Directive. Without prejudice to the

provisions of Article 4º of this Agreement, if, during the transitional period, the

British Virgin Islands to opt out of enforcing provisions on trade

automatic information in the moulds provided for in Chapter II of the Directive,

will cease to apply the withholding tax and the allocation of the revenue provided in the

Article 10º of this Agreement.

Article 16º Entry into force

This Agreement shall enter into force on the thirtieth day after the last of the dates on which

the respective Governments notify each other, in writing, that the respective

constitutionally required formalities have been met, and its provisions

produce effect from the date on which the Directive is applicable in the terms of the

provisions of Article 17º and 3 of Article 17º of the Directive.

Article 17º Denpronunciation

1. The present Agreement shall remain in force until it is denounced by a Party

Contractor.

2. Any of the Contracting Parties may denounce the present Agreement by

notice in writing to the other Contracting Party, in a notification specifying the

circumstances that led to that same notification. In this case, the present

Agreement cede no effect of 12 months after notification.

Article 18º Application and suspension of application

1. The application of this Agreement shall be conditional on the adoption and application by

all Member States of the European Union, by the United States of America,

Switzerland, Andorra, Liechtenstein, Monaco and Saint Marino, and by all territories

dependent and relevant associates of the Member States of the Community

European, respectively, of measures that conform to or be equivalent

to those contained in the Directive or in this Agreement, and provide for the same dates as

application.

2. Subject to the mutual agreement procedure provided for in Article 13º of the present

Agreement, the application of this Agreement or parts of the Agreement may be suspended

by any of the Contracting Parties with immediate effect upon notification to the

another that specifies the circumstances that led to this notification, in the case of

the Directive shall cease to be applicable, on a temporary or permanent basis, in

compliance with Community law or in the case of a Member State

suspend the application of its transposition legislation. The implementation of the Agreement

will be resumed as soon as they cease to check the circumstances that led to the

suspension.

3. Subject to the mutual agreement procedure provided for in Article 13º of the present

Agreement, any of the Contracting Parties may suspend the application of the present

Agreement by notification to the other that specifies the circumstances that

led to such notification in the case of one of the territories or third countries

referred to in paragraph 1 shall subsequently leave to apply the measures referred to in that

number. Suspension of application will not be allowed to occur less than two months after the

notification. The implementation of the Agreement will be resumed as soon as the measures are

repurposed by the third country or territory concerned.

Made in the Portuguese and English languages, making both texts equally authentic.

/Annex: list of related entities

Annex: List of the related entities referred to in Article 12º

For the purposes of the provisions of Article 12º of this Agreement, they shall be deemed to

" afim entity, acting in the quality of public authority, or whose function is

recognized in an international treaty " , the following entities:

ENTITIES OF THE EUROPEAN UNION:

Belgium

-Vlaams Gewest (Flamenga Region)

-Région wallonne (Valan Region)

-Région bruxelloise / Brussels Gewest (Brussels Region)

-Communauté française (French Community)

-Vlaamse Gemeenschap (Flamenga Community)

-Deutschsprachige Gemeinschaft (German-speaking Community)

Spain

-Xunta de Galicia (Junta da Galicia)

-Junta de Andalucía (Junta of Andalusia)

-Extremadura Joint (Junta of the Extremadura)

-Junta of Castilla-La Mancha (Junta de Castela-Mancha)

-Junta of Castilla-León (Wedding of Castile-Lion)

-Gobierno Foral of Navarra (Regional Government of Navarra)

-Govern de les Illes Balears (Government of the Balearic Islands)

-Generalitat de Catalunya (Autonomy Government of Catalonia)

-Generalitat de Valencia (Autonomic Government of Valencia)

-Diputación General de Aragón (Regional Council of Aragon)

-Gobierno de las Islas Canarias (Government of the Canary Islands)

-Gobierno de Murcia (Government of Murcia)

-Gobierno de Madrid (Government of Madrid)

-Gobierno de la Comunidad Autónoma del País Vasco / Euzkadi (Government of the

Autonomous Community of the Basque Country)

-Diputación Foral de Guipúzcoa (Provincial Council of Guipuzcoa)

-Diputación Foral of Vizcaya / Bizkaia (Provincial Council of Biscay)

-Diputación Foral de Alava (Provincial Council of Alava)

-Ayuntamiento de Madrid (Municipality of Madrid)

-Ayuntamiento de Barcelona (Municipality of Barcelona)

-Gran Canaria Insular Cabildo (Insular Council of the Canary Gran)

-Cabildo Insular of Tenerife (Insular Council of Tenerife)

-Institute of Official Credit (Official Credit Institute)

-Catalán Institute of Finanzas (Catalan Institute of Finance)

-Valencian Institute of Finanzas (Valencian Institute of Finance)

Greece

-ργανισμός tions ηλεπικοινωνιών Ελλάδος (Organism of Telecommunications of the

Greece)

-γργανισμός Σιδηροδρόμων Ελλάδος (Organism of the Iron Paths of Greece)

-Δημόσια Επιχείρηση ΛεκτρισμούXX_ENCODE_CASE_CAPS_LOCK_Off (Public Electricity Company)

France

-La Caisse d' amortissement de la dette sociale (CADES) (Amortization Box of the

Social Debt)

-L' Agence française de développement (AFD) (French Agency for

Development)

-Réseau Ferré de France (RFF) (Network of the Iron Paths of France)

-Caisse Nationale des Autoroutes (CNA) (National Self-Road Box)

-Assistance publique Hôpitaux de Paris (APHP) (Public Assistance Hospitals of

Paris)

-Charbonnages de France (CDF) (Mines of Coal of France)

-Entreprise minière et chimique (EMC) (Mineira and Chemistry Company)

Italy

-Regions

-Provinces

-Municipalities

-Cassa Depositi e Prestiti (Box of Deposits and Loans)

Latvia

-Pašvaldības (Local Governments)

Poland

-gminy (commune)

-powiaty (precincts)

-województwa (provinces)

-związki gmin (associations of communes)

-powiatów (association of districts)

-województw (association of provinces)

-miasto stołeczne Warszawa (capital of Warsaw)

-Agencja Restrukturyzacji i Modernizacji Rolnictwa (Agency for Restructuring

and Modernization of Agriculture)

-Agencja Nieruchomości Rolnych (Agricultural Property Agency)

Portugal

-Autonomous Region of Madeira

-Autonomous Region of the Azores

-Municipalities

Slovakia

-mis the obce (municipalities)

-Železnice Slovenskej republiky (Company of the Iron Paths of Slovakia)

-Štátny fond cestného hospodárstva (State Fund of Management Viaria)

-Slovenské elektrárne (Electrical Companies of Slovakia)

-Vodohospodárska výstavba (Water Economy Building Company)

INTERNATIONAL ENTITIES:

-European Bank for Reconstruction and Development

-European Investment Bank

-Asian Development Bank

-African Development Bank

-World Bank / BIRD / IMF

-International Financial Society

-Inter-American Development Bank

-Social Development Fund of the Council of Europe

-EURATOM

-European Community

-The Andina de Fomento Corporation (CAF)

-Eurofima

-European Coal and Steel Community

-Nordic Investment Bank

-Caribbean Development Bank

The provisions of Article 12º shall be without prejudice to any obligations which the Contracting Parties

may have assumed in respect of the international entities referred to above.

ENTITIES IN THIRD COUNTRIES:

The entities that fulfil the following criteria.

1. The entity is clearly considered a public entity in accordance with the

national criteria.

2. A public entity of that kind to be a non-market producer that administers and

funds a group of activities, which essentially consist of providing goods

and non-market services intended for collectivity, and which are effectively

controlled by public administrations.

3. Such a public entity to issue debt securities on a regular basis and in large

quantity.

4. The State concerned shall be in a position to ensure that such a public entity does not

proceed to the early repayment in case there are clauses of

ressarcement ( gross-up ).