For a Russian tax resident, CFC reporting is usually perceived with a lag: at the current deadline the client works with the financial statements of the company for an earlier year. After relocation to Portugal this familiar logic can break down. The Portuguese system looks not at the Russian year of income recognition, but at when the tax period of the foreign company itself ended.

This is where the practical risk of the first Portuguese year appears. The client may think that in 2026 they are still preparing only the «old» Russian CFC pack for 2024. But if they became a Portuguese tax resident in 2025, the Portuguese analysis may already require data on the foreign company for 2025 — that is, for a year that has just ended.

This is particularly sensitive for clients with offshore or low-tax structures: BVI, Seychelles, Panama, the Cayman Islands and similar jurisdictions. For Portugal what matters is not the bare fact that the client owns a foreign company, but whether it falls within the Portuguese CFC rules: where it is registered, how much tax it pays, what its income is, whether it has real activity and who controls it.

It is important not to conflate a foreign company with a Portuguese company. If the client owns a Portuguese Lda or SA, this is not a CFC for Portugal — it is a local company operating within the Portuguese corporate tax regime. But for Russia, such a company may still be a CFC if the client themselves remains a Russian tax resident.

EMET's main task in the first year after relocation is not to «translate Russian CFC reporting into Portuguese». The task is different: to build a calendar map. Which companies still require Russian reporting, which already fall into the Portuguese analysis, for which financial statements for the previous year are needed, and for which — for the year that has just ended.

Without such a map, the client risks falling into the gap between two systems: in Russia they are preparing one year, in Portugal the next year is already required, and in parallel a bank is asking to explain the source of funds and the economics of the structure.

The practical output of EMET's work is a single position on companies, income and documents: what Portugal sees, what Russia may still see, which foreign companies fall within the CFC rules and which do not, and which documents need to be collected before the first Portuguese deadline.

Mechanics

Portuguese CFC rules

For an individual who is a Portuguese tax resident, CFC rules do not apply automatically to all foreign companies. Article 20 CIRS (article 20 of the Portuguese personal income tax code) includes in the income of a Portuguese resident the profit or income of non-resident companies if they are in a clearly more privileged tax regime and if the resident directly or indirectly holds at least 25% of the capital, voting rights or rights to income/assets. The mechanism is applied through Article 66 CIRC (article 66 of the Portuguese corporate tax code).

What counts as a privileged regime

Under Article 66 CIRC a foreign company is treated as being in a clearly more privileged regime if its jurisdiction is included in the official Portuguese list or if the corporate income tax actually paid is below 50% of the tax that would be calculated under Portuguese rules. There are exceptions, including for EU/EEA cases where there are valid economic reasons and real activity.

Calendar in Portugal

Portuguese CFC imputation is attributed to the tax period of the Portuguese taxpayer that includes the end of the foreign company's tax period. Where the foreign company has a calendar financial year, profit for 2025 enters the Portuguese IRS return for 2025, filed between 1 April and 30 June 2026.

Calendar in Russia

Under Russian logic, CFC profit is recognised at the controlling person's level on 31 December of the calendar year following the tax period containing the end of the CFC's financial year. Therefore a CFC financial year that ended in 2024 is usually recognised at the Russian controlling person's level in 2025, with the individual's notification filed in 2026.

Portuguese company

A Portuguese Lda or SA is not a CFC for Portugal, because CFC rules apply to non-resident companies. But if the controlling person retains Russian tax residency, such a Portuguese company may still be a CFC for Russia.

After relocation to Portugal the client cannot automatically transfer Russian CFC logic onto the Portuguese return. In Russia, CFC profit lives with a calendar lag; in Portugal it is tied to the year in which the foreign company's tax period ends. Therefore in the first Portuguese year the client may unexpectedly find themselves not with the «usual» reporting for the year before last, but with an obligation to prepare data on the foreign company for the year that has just ended.