Constitutional Court

Judgment No. 430/2016, 30 September 

Case No. 367/13 

In the judgment in question, the Constitutional Court did not deemed unconstitutional article 87-A, paragraph 2 (now paragraph 3), of the Corporate Income Tax Code ("CIRC"), which, for purposes of application of the State Surtax, disregards period losses within a group of companies subject to the Tax Group Regime ("RETGS").

The Constitutional Court held that this provision does not breach any constitutional principle (namely the principle of equality, principle of proportionality and the principle of taxation by the effective income) by considering, in short, that this legal solution is within the legislator's powers to define the taxable profit which is relevant for the application of the State Surtax, because (i) it is a tax solely addressed the companies with a higher tax capacity – i.e. with taxable profits of (currently) over EUR 1,500,000.00 ) - and only applicable to the portion of profits exceeding that amount and (ii) it is not clear that this tax regime is generally more disadvantageous to companies subject (by their own option) to the RETGS.

Supreme Administrative Court

 Judgment of 8 September 2016

Case no. 0508/15

In the Judgment in question, the Supreme Administrative Court concluded that the obligation to pay Vehicle Tax and Value Added Tax due before the attribution of a Portuguese registration number to a vehicle if of the entity that submits the Light Vehicle Form (“DVL”), reason why the Tax Authorities may not collect those taxe s from an entity not responsible for the introduction of the vehicle into national territory and which acquired it from a financial leasing company (more than 4 years after the DVL), unless it is invoked that this entity had (or should have had) prior knowledge that the national registration number had been obtained without the payment of the due taxes. 

Supreme Administrative Court

Judgment of 21 September, 2016

Case No. 0582/15 

In the judgment in question, the Supreme Administrative Court concluded that the gain corresponding to the positive difference between the amount for which a real estate asset was transferred to a creditor in lieu of payment and its the acquisition value, updated and assessed according to the law, is considered a capital gain subject to taxation, since there is an effective patrimonial advantage for the purposes of article 10, paragraph 1, point a), of the CIRS. 

North Administrative Central Court

Judgment of 23 June 2016

Case no. 00157/11.5BECBR

In the judgment in question, the North Administrative Central Court concludes that if the Tax Authorities do not detect, during a tax audit, objective facts strongly suggesting that the invoices that support various operations are false, there are no legal grounds to amend the taxable basis, reason why the presumption of veracity of the taxpayer’s accounting records is safeguarded, not being possible to invert burden of proof foreseen in article 74 of the General Tax Law (“LGT”).

On the other hand, the North Administrative Central Court considered that it is duly substantiated a decision to apply indirect methods if the taxpayer’s accounting records have omissions, anomalies and inaccuracies detected during a tax audit and the Tax Authorities clearly and objectively indicate the reasons that allow to conclude that annulments of major sales regularly made by the taxpayer (and identified as “end-of-day accounts”) are not supported by any document that can guarantee that they refer to accounting situations covered by that definition and not to an expedient aimed to subtract income from the accounts. 

Administrative Arbitration Centre

Arbitration Decision of 27 July 2016

Case no. 5/2016-T

In the Arbitration Decision in question, the Tax Arbitration Court concluded that the deductions provided for in the Tax Incentive Regime for Corporate Research and Development (“SIFIDE”) and in the Tax Regime Supporting Investment (“RFAI”) must be made after the assessment of the global amount of Corporate Income Tax, which includes the result of the application of autonomous taxation, pursuant to article 90 of the CIRC, since it was considered – contrary to the understanding of the Constitutional Court – that autonomous taxes are a part of the Corporate Income Tax.

In this context, it must be noted that one of the judges had a different opinion, according to which the deductions foreseen in SIFIDE and RFAI are made to the income liable to the Corporate Income Tax itself, in which autonomous taxation is not included, precisely because they are not included in the assessment of the taxable profit or of the taxable amount and consequently does not contribute to the income liable to the Corporate Income Tax.