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Portugal Introduces OCR Requirements for Investor Tax Reporting in 2023
Administrative guidance published in July 2023 requires Portuguese financial institutions to implement OCR validation for investor tax reporting documents, strengthening compliance with CRS standards.
On 14 July 2023, the Diário da República published administrative guidance requiring Portuguese financial institutions to implement optical character recognition (OCR) validation for investor tax reporting documents. This includes proof of tax residency, forms related to withholding tax reductions under double-taxation treaties, and foreign identification documents.
The goal is to reduce fraud, ensure compliance with CRS standards and harmonise document verification across institutions.
For foreign investors—particularly Americans, Canadians, British citizens and Israelis—this measure means stricter documentation requirements when opening bank accounts, subscribing to investment funds or receiving dividends. It also reduces the risk of errors in residency verification which could lead to incorrect withholding tax rates.
The OCR requirement reflects Portugal’s increasing focus on financial transparency and alignment with EU anti-fraud initiatives.
Official source: Diário da República, Tax Authority administrative guidance, 14 July 2023 (https://dre.pt)