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ARTICLE 2

TAXES COVERED

1. This Convention shall apply to taxes on income imposed on behalf of a Contracting State or of its political

or administrative subdivisions or local authorities, irrespective of the manner in which they are levied.

2. There shall be regarded as taxes on income all taxes imposed on total income, or on elements of income,

including taxes on gains from the alienation of movable or immovable property, taxes on the total amounts of

wages or salaries paid by enterprises, as well as taxes on capital appreciation.

3. The existing taxes to which this Convention shall apply are in particular:

a) in Portugal:

(i) the personal income tax (Imposto sobre o Rendimento das Pessoas Singulares – IRS);

(ii) the corporate income tax (Imposto sobre o Rendimento das Pessoas Colectivas – IRC); and

(iii) the surtaxes on corporate income tax (derramas);

(hereinafter referred to as “Portuguese tax”);

b) in Andorra:

(v) corporate income tax (Impost sobre les Societats);

(vi) personal income tax (Impost sobre la Renda de les Persones Físiques);

(vii) tax on income for fiscal non-residents (Impost sobre la Renda dels No Residents Fiscals); and

(viii) tax payable on the increase in value in immovable property transfers (Impost sobre les Plusvàlues en

les Transmissions Patrimonials Immobiliàries);

(hereinafter referred to as “Andorran tax”).

4. The Convention shall apply also to any identical or substantially similar taxes that are imposed after the

date of signature of the Convention in addition to, or in place of, the existing taxes. The competent authorities of

the Contracting States shall notify each other of any significant changes that have been made in their taxation

laws.

CHAPTER II

DEFINITIONS

ARTICLE 3

GENERAL DEFINITIONS

1. For the purposes of this Convention, unless the context otherwise requires:

a) the term “Portugal” means the Portuguese Republic and when used in a geographical sense comprises

the territory of the Portuguese Republic in accordance with the International Law and the Portuguese legislation;

b) the term "Andorra" means the Principality of Andorra and, when used in a geographical sense means the

territory of the Principality of Andorra in accordance with the International Law and the Andorran legislation;

c) the terms “a Contracting State” and “the other Contracting State” mean Portugal or Andorra as the context

requires;

d) the term “tax” means Portuguese tax or Andorran tax, as the context requires;

e) the term “person” includes an individual, a company and any other body of persons;

f) the term “company” means any body corporate or any entity that is treated as a body corporate for tax

purposes;

g) the term “enterprise” applies to the carrying on of any business;

h) the terms “enterprise of a Contracting State” and “enterprise of the other Contracting State” mean

respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a

resident of the other Contracting State;