Brussels, 17/01/2006 (Agence Europe) - The Commission has sent Portugal a reasoned opinion, the second stage in the infringement procedure, requesting it to amend its tax legislation concerning outbound interest payments. A withholding tax of 20% is levied on the gross interest paid by Portuguese resident borrowers to non-resident lenders. On the other hand, interest paid to resident financial institutions is not subject to withholding tax, although it is subject to Portuguese corporate income tax. Interest payments to foreign banks may therefore be taxed more heavily than interest payments to Portuguese banks. The Commission considers that this constitutes an impediment to the freedom to provide services and the free movement of capital. Portugal now has two months to respond satisfactorily, after which time the Commission may refer the matter to the European Court of Justice.