Tax Justice

The report of the Commission for the Review of Tax Proceedings and Procedure and of Taxpayers’ Guarantees includes proposals for legislative amendments designed to promote greater speed, simplicity, and efficiency in tax litigation.

Time limitation of tax debts

It is proposed that tax debts shall become time-barred once 20 years have elapsed from the initial date of the limitation period, regardless of any interruptive or suspensive events that may occur.

Compensatory interest

It is proposed that entitlement to compensatory interest shall depend on the existence of an error not attributable to the taxpayer, removing the need to demonstrate the existence of an error attributable to the Tax Administration.

It is further clarified that an error contained in returns filed by the taxpayer will be attributable to the Tax Administration whenever the taxpayer has followed any written guidance from the Tax Administration or where the Tax Administration’s IT system does not allow the taxpayer to complete that return correctly.

Ex officio review regime

It is proposed that taxpayers may request the ex officio review of tax assessment acts within four years on the basis of any illegality, without the need for there to be an error attributable to the Tax Administration.

Regime for challenging tacit rejection

In the event of presumed tacit rejection at the administrative stage, it is proposed that taxpayers may challenge that tacit rejection until they are notified of the decision in the tax procedure.

Time limits and electronic notifications

It is proposed to standardise the time limits for administrative, judicial, and tax arbitral claims:

It is also proposed that notifications sent to the taxpayers’ electronic tax domicile (ViaCTT or single digital address) shall be deemed served on the 5th day after they are made available, irrespective of the tax procedure in which they occur.

Appeals in tax arbitration

It is proposed to introduce a review mechanism for arbitral decisions that have become final in the context of tax arbitration, permitting review within four years on any of the grounds provided for in the Code of Civil Procedure (notably where the arbitral decision is irreconcilable with a final decision of an international appellate body that is binding on the Portuguese State).

Mutual agreement procedure for the resolution of international tax disputes

It is proposed that the mutual agreement procedure (MAP) for the resolution of international tax disputes be regulated in the Tax Procedure and Process Code, with particular focus on the relationship between the taxpayer and the Tax Administration.

It is further proposed to establish the taxpayer’s right to compensatory interest where implementation of the outcome reached under the MAP occurs beyond the prescribed time limit.