Constitutional Court

Judgment of 29 September 2015

Case no. 592/14

The Constitutional Court held unconstitutional the interpretation of Article 54 of the Tax Procedural Code that, by classifying as a liens and not as a taxpayers’ option the judicial claim of interlocutory proceedings against their rights, prevented the judicial claim of final tax assessment decisions on the grounds of irregularities in those proceedings, as such interpretation would result in a violation of the right to effective judicial protection and of the constitutional principle of justice.

Supreme Administrative Court

Judgment of 16 September 2015

Case no. 1292/14

In the Judgment in question, the Supreme Administrative Court decided that capital gains arising from a sale of shares held for more than 12 months that occurred before Law no. 15/2010, of 26 July, entered into force - particularly within the period between 1 January and 26 July 2010 - are excluded from taxation, therefore, shall not be taken into account for the purposes of assessing the annual positive balance of capital gains.

Supreme Administrative Court

Judgement of 7 October 2015

Case no. 0768/13

In the Judgment in question, the Supreme Administrative Court decided that a final withholding tax on dividends distributed by a company resident in Portugal to a shareholder of another Member State, whose national law determines that such income is exempt from tax, is illegal as it breaches the free movement of capital right due to the impossibility of neutralisation of this tax.

North Central Administrative Court

Judgment of 17 September 2015

Case no. 00228/13.3BEVIS

In the Judgment in question, the North Central Administrative Court gave its opinion on the international jurisdiction of Portuguese courts, particularly regarding the ability to opine on the prescription of a tax debts of another Member State and on the double taxation occurred in Spain.

The Court concluded,  on the one hand,  that under  the mutual recovery assistance mechanisms between Member States of the European Community, Portuguese courts do not have jurisdiction to decide on the legality neither on the effects of acts of another Member State within its territory. On the other hand, the Court also ruled that any claim on double taxation incurred by the tax authority of another Member State must be decided by those same authorities or in the courts of that Member State.

South Central Administrative Court

Judgement of 8 October 2015

Case no. 06685/13

In the Judgment in question, the South Central Administrative Court concluded that, for the purposes of exemption from income of the tax capital gains arising from the disposal of immovable property, the failure to communicate a change of tax domicile does not preclude the fulfilment of the permanent residence condition. In fact, taxpayer permanent abode can be attested by facts that demonstrate the it corresponds to his real and effective domicile.

South Central Administrative Court

Judgement of 8 October 2015

Case no. 08317/15

In the Judgment in question, the South Central Administrative Court concluded that both per diem allowances and amounts due for the use of private car for business purposes are, as a rule, a compensation awarded to the employee for expenses incurred in behalf of the employer. As such, they are only taxed when they do not have a compensatory nature, thus representing an economic advantage for the employee.

Administrative Arbitration Centre

Tax Arbitration Court

Arbitration Decision of 24 November 2014

Case no. 367/2014-T

In the arbitration decision in question, the Tax Arbitration Court decided that Article 20.1 of the Corporate Income Tax Code does not allow determining the taxable basis of a taxpayer without taking into account its accountancy, as such a set -aside can only be achieved by the application of the general anti-abuse provision.

The Tax Arbitration Court also clarifies that, in connection with the deductibili ty of costs, Tax Authorities can only reject costs that clearly are not capable of generating income, since it is up to the taxpayer, within the use of its right of economic freedom, to define the tax relevance of the corporate strategies and to elect the means for achieving the set goals.

Finally, regarding the breach of the principle of accrual -based accounting, following the Supreme Administrative Court case law, the Tax Arbitration Court stated that this principle needs to conform and be interpreted with the principle of justice, so as to allow to carry forward costs incurred in prior tax periods provided that the non-recognition in past periods does not result from a voluntary and intentional omission in order to transfer tax results between tax periods.