Constitutional Court

Judgement No. 100/2016, of 23 February 2016, published on March 2016 Case No. 1021/14

In the Judgment in question, the Constitutional Court declared constitutional the provision of paragraph 4 of Article 19 of the Statute of Tax Benefits ("STB"), when interpreted with the meaning, also adopted in an arbitration decision of the Administrative Arbitration Centre, that the disregard of the costs incurred with workers who are part of the household of the employer, for the purposes of the employment creation benefit, can only be applied to individual businesspersons, as companies regardless of their corporate type do not have a household.

Constitutional Court

Judgement No. 139/2016, of 8 March 2016 Case No. 927/15

In the Judgement in question, the Constitutional Court ruled constitutional the provision of paragraph 3 of Article 31 of the STB with the meaning that the tax exemption applicable to capital gains perceived by a holding company from the onerous transfer of participations is never applicable if the stake was acquired to related parties and was held for less than three years prior to sale.

Supreme Administrative Court

Judgement of 24 February 2016, published in March 2016 Case No. 082/16

In the Judgment in question, the Supreme Administrative Court states that for the purp ose of assessing the adequacy of a guarantor to secure the payment of the enforceable debt it is not enough that the Tax Authorities use an objective criterion, being also necessary that such criterion is adequate for that purpose.

Therefore, the Tax Authorities are not allowed to use the participation valuation criterion set forth by the Stamp Duty Code for the purposes of assessing that tax, without there being a legal rule determining its applicability for the purpose of valuating the estate of the guarantor and without demonstrating its suitability for this purpose.

Administrative Arbitration Centre

Tax Arbitration Court

Arbitration Decision of 12 November 2015, published on 14 March 2016

Case No. 326/2015-T

In the Arbitration Decision in question, the Tax Arbitration Court ruled that the financial costs incurred in by an holding company to increase the equity of a subsidiary meets the requirements for tax deductibility, considering that the corporate purpose of a holding company is exclusively to manage shareholdings, which naturally involves its acquisition, the management operations necessary for the appreciation of the financial asset, financing and eventual subsequent sale.

Administrative Arbitration Centre

Tax Arbitration Court

Arbitration Decision of 21 January 2016, published on 14 March 2016

Case No. 92/2015-T

In the Arbitration Decision in question, the Tax Arbitration Court ruled that the financing costs incurred by a company for the purchase of 100% of the shares of the company that would afterwards incorporate it under a reverse merger, continue to be tax deductible post merger.

The Tax Arbitration Court considered that the requirements for tax deductibility of financing expenses are met since (i) the funds were actually applied in the activity of the company as it stands post-merger, i.e., as a synthesis of both merged companies, “even if contained in the juridical «shell» of the surviving entity” and (ii) it is not established that the merger was, solely or principally, motivated by non-business reasons or fraudulent.

Administrative Arbitration Centre

Tax Arbitration Court

Arbitration Decision of 22 January 2016, published on 14 March 2016 Case No. 218/2015-T

In the Arbitration Decision in question, the Tax Arbitration Court ruled that the qualification of the building mentioned in the license of use must be taken into consideration for the purpose of determining its tax value.

Hence, a service station must be assessed globally as per the rules of the Municipal Property Tax Code applicable to properties of the category "Other", whenever it is composed of a fuel station (identified in the license of use as a building of the category "Other") and a convenience store/coffee shop (identified in the license of use as a building of the category "Commercial"), the latter being ancillary and unrepresentative within station’s economic activity.

Contrary to the procedure followed by the Tax Authority, the Arbitration Court understood that these properties must be evaluated using, with the necessary changes, the method foreseen for urban properties for housing, commerce, industry and services and not the method of construction cost plus land value.

Administrative Arbitration Centre

Tax Arbitration Court

Arbitration Decision of 29 January 2016, published on 29 March 2016

Case No. 268/2015-T

In the Arbitration Decision in question, the Tax Arbitration Court ruled that the income obtained by an Insurance Company arising from participations and units held under unit- linked contracts is to be included in its taxable income, but is capable however, to benefit from the mechanisms of elimination of double taxation, in particular those provided for in Article 22 of the STB and Article 51 of the CIT Code.