Portugal's Supreme Administrative Court Holds Withholding Tax on Dividend Payments to U.S. UCITS Violates Free Movement of Capital Principle

A judgment of Portugal's Supreme Administrative Court was recently published concerning the application of the EU principle of the free movement of capital in relation to dividends paid to a third (non-EU) country. The case involved the payment of dividends by a Portuguese resident to a non-resident UCITS in the United States in 2019, which was subject to withholding tax in Portugal at a rate of 15% in accordance with the provisions of the Portugal-U.S. tax treaty. The tax withholding was ap…