Supreme Administrative Court

Judgment of March 4, 2015

Case no. 01529/14

In this Judgment the Supreme Administrative Court states that compensatory interest are only due in the event of illegal conduct of the Tax Authority which does not happen, in the Court’s understanding, when the Authority applies a rule which is in force at that time, regardless of said rule being subsequently declared unconstitutional.

In this sense, the Supreme Administrative Court understands that from the judicia l annulment of a self assessment (confirmed by the Tax Authority due to the overruling of an administrative claim in which the taxpayer invoked the unconstitutionality of the rule and requested the correction of the self assessment), which gave rise to a t ax refund, does not necessarily arise a damage worthy of compensation, since the tax restitution can be considered, in itself, a benefit for the taxpayer.

South Central Administrative Court

Judgement of March 5, 2015

Case no. 08427/15

In this judgement the South Central Administrative Court states that spouses who jointly submit their personal income statement are jointly liable for the payment of PIT on all income declared, even if the spouses are married under the separate property regime.

This liability remains even if the income giving rise to the tax assessment consists of capital gains resulting from the sale of a personal asset of one of the spouses and the proceeds of sale have not reverted to the couple.

Administrative and Tax Arbitration Centre

Tax Arbitration Court

Arbitration Decision of June 28, 2013, published on March 17, 2015

Case no. 9/2013-T

In this arbitration decision, the Arbitration Court ruled that, within the scope of an international displacement of a worker, the provision by the employer of a dwelling in addition to the payment of a daily allowance (per diem) is a necessary expense for the company having no economic benefit for the worker.

In this sense, neither daily allowances (in that part not exceeding the legal limits se t for State workers’ allowances) nor the amount spent by the employer on the  dwelling provided to the worker – which does not constitute a fringe benefit taxable under PIT – should be subject to taxation.

Administrative and Tax Arbitration Centre Tax Arbitration Court

Arbitration Decision of January 27, 2014, published on March 17, 2015

Case no. 155/2013-T

In the arbitration decision, the Arbitration Court ruled that the benefit provided for in article 43(4) of the PIT Code which determines the taxation of just 50% of the capital gains resulting from the sale of shares in micro and small companies not listed on a regulated or non-regulated stock market only indirectly constitutes a benefit for micro and small companies.

The Arbitration Court understands that, primarily, the benefit serves solely the shareholder that injected the funds into the company's share capital, who is resident in Portuguese territory and will pay capital gains tax herein.

In this sense, and given that the legislator did not limit the benefit to stakes in Portuguese companies, it will be applicable to capital gain from the sale of sha res of a company with head office in Cape Verde.

Administrative and Tax Arbitration Centre

Tax Arbitration Court

Arbitration Decision of November 24, 2014, published on March 18, 2015

Case no. 379/2014-T

In this arbitration decision the Arbitration Court states that the wording of article 38(2) of the General Tax Law enacted by Law nº 30-G/2000 requires that by applying the general anti-abuse provision no undue tax benefits are obtained. On that basis, it is presupposed by the provision that, at least in cases where the tax advantages have already been produced, the recipient of the rule is the entity that has obtained the undue tax advantages.

In this sense, the substitute taxpayer cannot be held liable, under terms of the general anti-abuse provision, for the lack of PIT withholding regarding amounts that the tax authorities re-qualified as dividends, since the persons who actually benefited from the tax advantages resulting from the potential simulated transaction were the shareholders.