Constitutional Court

Judgment no. 231/2016, of 3 May 2016

Case no. 1085/15

In the Judgment in question, rendered in the context of an appeal of an arbitration decision, the Constitutional Court deemed compliant with the Constitution the provision of Article 103(4) of the PIT Code, which states that “in the case of income subject to withholding that has not been recorded nor communicated as such to the corresponding beneficiaries, the substitute is joint and several liable for the non-withheld tax”.

In this sense, the Constitutional Court accepted as constitutional that amounts concerning PIT not withheld can be demanded, in their entirety, indistinctly from the employee or from the employer.

Supreme Administrative Court

Judgment of 6 April 2016, published in May 2016

Case no. 01613/15

In the Judgment in question, the Supreme Administrative Court stated that, the fact that the new amendment to the Corporate Income Tax Code, enacted by Law 2/2014, of 16 January, has expressly established that amounts paid as autonomous taxation are not considered a tax cost for the purpose of determining the taxable profit does not mean that before this wording came into effect these amounts did constitute a tax cost for the purpose of determining the taxable profit.

South Central Administrative Court

Judgment of 14 April 2016, published in May 2016

Case no. 09417/16

In the Judgment in question, the South Central Administrative Court stated that although Law no. 82-B/2014, of 31 December, suppressed the title "suspensive effect" from Article 278 of the Tax Procedural Code, there is no doubt that a claim with immediate refer ral still has that same effect by reference to the contested decision.

North Central Administrative Court

Judgment of 14 April 2016, published in May 2016

Case No. 00450/09.7BEPRT

In the Judgment in question, the North Central Administrative Court stated that it is not necessary that the Tax and Customs Administration proves the existence of a sham transaction in order to correct a Corporate Income Tax assessment by disregarding costs included in what it considers to be false invoices. It is sufficient that the Tax and Customs Administration proves the facts that led it to disregard the invoices, demonstrating that those facts are sufficient to contradict the assumption of accuracy of the taxpayer’s accounting records and supporting documentation.

Having proven this, it is then incumbent on the taxpayer to prove that the transactions were actually performed.

North Central Administrative Court

Judgment of 14 April 2016, published in May 2016

Case no. 04689/04-Viseu

In the Judgment in question, the North Central Administrative Court identified some practices which can lead to the undermining of the trust in the taxpayer’s accounting and to the application of indirect methods for determining the tax base, such as: purchase documents omitting quantities and unit prices, preventing the control and assessment of sales; reporting of a gross profit margin not in line with the statistical indicators of the Tax and Customs Authority; control of commercial transactions evidencing differences in sales; or absence of depreciation charges or other charges normally incurred in the same type of activity.

It also clarifies that if the Tax and Customs Authority concludes that the taxpayer is engaged in transactions that are not disclosed in the accounting, it is up to the taxpayer to demonstrate that the Tax and Customs Authority’s reasoning to reach this conclusion did not take into account certain circumstances, or to demonstrate the existence of a gross error or clearly excessive quantification, if applicable.