Supreme Administrative Court
Judgment of 21 May 2014
Case No. 01192/13
In this Judgment, the Supreme Administrative Court reaffirms that withholding at source made with regard to dividends distributed by a company with registered office in Portugal to a non-resident shareholder with registered office in Spain, breaches the European Union principles of non discrimination, freedom of establishment and free movement of capital, where an organisation resident in Portugal would not, under the same circumstances, be subject to taxation for such dividend and the Double Taxation Convention (“CDT”) does not allow to compensate the effects of this difference in treatment.
The Supreme Administrative Court observes that the CDT signed by and between Portugal and Spain does not allow to nullify the effects of the difference in treatment identified in the case described above, since the mechanism provided for in the CDT is dependent, among other factors, on the income in question being included in the taxable basis in Spain, which did not happen in this case.
South Central Administrative Court
Judgment of 15 May 2014
Case No. 07625/14
In this Judgment, the South Central Administrative Court states that the existence of credit movements in the bank accounts of a personal income tax taxpayer, which represent amounts higher than the income declared to the Tax and Customs Authority, justifies the assessment of the taxable income through indirect methods, in accordance with Article 88(d) of the General Tax Law.
The South Central Administrative Court further decided that the claim made by the taxpayer that those amounts in cash came from gains through casino and internet games, only evidenced by three cheques and by the proof that the taxpayer had been a casino and poker player for several years, is not enough to prove the origin of the transactions underlying said bank movements, not even to give rise to a founded doubt in favour of the taxpayer.
Administrative and Tax Arbitration Centre
Arbitration Decision of 14 February 2014
Case No. 170/2013-T
In the Arbitration Decision referred to above, the Arbitration Court reaffirms the approach previously expressed that Article 3(1) of the Código do Imposto Único de Circulação (“IUC”) (Single Road Tax Code) establishes a rebuttable presumption with regard to the taxpayer of this tax.
The Arbitration Court emphasises that the ratio legis of this provision is the taxation of the actual owners-users of the vehicles and that the transfer of ownership can be relied on against the Tax and Customs Authority, even if the same has not been registered with the Car Registration Office.
The Arbitration Decision therefore concludes that the person registered as owner of a vehicle in the Registry and who, for that reason, was considered to be subject to Single Road Tax Code by the Tax and Customs Authority, is entitled to provide evidence showing that the owner of the vehicle is another person and that, for that reason, he is not subject to Single Road Tax, and that the tax assessment made is illegal.