Supreme Administrative Court

Judgment of 28 May 2014

Case No. 0395/14

In this judgment the Supreme Administrative Court restates, in line with previous case law, that the scope of the original version of Item No. 28.1 of the General Scale of Stamp Duties (“TGIS”) does not cover land for construction.

The Supreme Administrative Court emphasised that the amendment to Item 28.1. of the TGIS introduced by Law No. 55-A/2012 of 29 December – which now expressly provides for the taxation of land for construction for residential purposes –, does not have an interpretative nature, rather merely projects its effects to the future .

South Central Administrative Court

Judgment of 12 June 2014

Case No. 06224/12

In this judgment the South Central Administrative Court rules that, in the scope of tax arbitration proceedings, the Arbitration Tribunal cannot order the Tax  and Customs Authority to reimburse the expenses borne by the opposing party with legal fees , to be settled upon the enforcement of the judgment, at the risk of going beyond the competence legally attributed to it and that part of the decision being annullable .

The South Central Administrative Court emphasises that the Arbitration Court has competence to order the parties to pay court costs, but the latter only include expenses arising from the conduct of the arbitration proceedings and the arbitrators’ fees (referral fee), which should not be confused nor can it be combined with the order that the Tax Authority reimburse the costs borne by the opposing party with attorneys’ fees . This order takes the nature of compensation on grounds of extra-contractual civil liability of the State, which do not fall within the competences of the Tax Arbitration Court .

South Central Administrative Court

Judgment de 12 de June de 2014

Case No. 06726/13

In the Judgment in question, the South Central Administrative Court  states that the assets acquired by a heir that exceed his ideal share of the estate , for which he is obliged to make cash payments to the other heirs, are not acquired by virtue of the succession, but rather are acquired in return for payment, and must be considered as such for the purpose of personal income tax (“IRS”).

Although the effects of the distribution of the estate date back to the opening of the succession, such is not the case with whatever is acquired in excess of the ideal share.

Administrative and Tax Arbitration Centre

Tax Arbitration Court

Arbitration Decision of 6 February 2014, published on 5 June 2014

Case No. 104/2013-T

In this Arbitration Decision, the Arbitration Tribunal ruled on the concept of tax residence for personal income tax purposes and on the effects arising from the ratification, with retroactive effects, of the land registration of the tax residence , determined by the Taxpayers Registry Services (“DSRC”).

In this connection, the Arbitration Tribunal states that it is not for the DSRC to settle legal interpretation questions concerning the concept of tax residence , for which reason the declaration of the DSRC conferring retroactive effects to an application for the change of status to non-resident cannot have automatic effects with regard to previous tax acts.

Moreover, the fact that the taxpayers have submitted personal income tax returns as residents and have entered tax benefits in Annex H relating to loans for the purchase of permanent personal residence, constitutes a contradictory behaviours in light of the following application for the change of status to non-resident with retroactive effects, which goes against the good faith and trust that should guide the relations between the Tax and Customs Authority and the taxpayers.

Accordingly, the Arbitration Tribunal concludes that the personal income tax assessments issued considering the resident status of the taxpayer could not later be cancelled sole ly on grounds of the acceptance by the DSRC of the application for change of their status to non-residents with retroactive effects.

Administrative and Tax Arbitration Centre

Tax Arbitration Court

Arbitration Decision of 21 April 2014, published on 12 June 2014

Case No. 270/2013-T

In this Arbitration Decision, the Arbitration Tribunal states that the application of the exclusion of taxation of half of the positive balance between capital gains and capital losses calculated by reference to the sale of holdings of micro and small companies not listed on regulated or non-regulated markets of the stock exchange, provided for in the personal income tax code, does not depend on a certificate issued by IAPMEI – Agência para a Competitividade e Inovação, I.P. attesting to the status of micro or small company, it being sufficient that the defining elements of that status are fulfilled in the concrete case.