Supreme Court of Justice

Judgment to Establish Case Law No 2/2015

Diário da República (Portuguese official gazette), 1st series, No 35, 19 February 2015

Breach of trust against the Social Security – Limitation period of criminal proceedings

Establishing case law to the effect that «In the crime of breach of trust against the Social Security, provided for and punished under Articles 107(1) and 105(1) and (5) of “Regime Geral das Infracções Tributárias”, the limitation period for prosecution starts running on the day after the deadline for the delivery of the contributory payments due, as set out in Article 5(2) of the same legislation.»

South Central Administrative Court

Judgment of 19 February 2015

Case No 08313/14

Civil union – Tax residence

In this decision, the South Central Administrative Court analysed whether the personal income tax returns jointly filed, in accordance with the p rovisions of Article 14 of the personal income tax code, by two persons who had been living in conditions similar to those of spouses for more than two years, should be accepted in the event that, during that period of time, the two persons did not also have the same tax residence.

In this case, the tax authorities considered that the unmarried taxpayers in question, could only benefit from the provisions governing the joint submission of the tax returns if, in addition to proving the requirements of the ci vil union, they had had the same tax residence for two years – which, according to the tax records of the tax authorities, was not the case.

Accordingly, the tax authorities made tax corrections, which were challenged by the taxpayers, on grounds of the different tax residences during that period of time.

The Court began by pointing out that, in Article 14 of the personal income tax Code, the legislator established that, for people living in civil unions to benefit from the tax regime of married taxpayers and not legally separated from persons and property, in addition to having to prove that the union has lasted for at least two years they should also fulfill two other conditions: (i) having the same tax residence for two years (ii) both taxable persons living in civil union signing the tax returns.

However, to specify the concept of residence for tax purposes, the Court pointed out that, under the tax laws, the tax residence of individuals is, as a rule, the place of habitual residence. Consequently, it is that sameness – of habitual residence – that must be respected by taxpayers and it is that sameness that must be respected by the tax authorities to determine whether or not the conditions imposed by the law for two people living in civil union to benefit from the provisions governing joint tax returns are met.

In this manner, the Court decided that what is relevant is that the residence – of the taxpayers that have been in a civil union for at least two years – is in fact the same and not that they have declared it to be so for tax purposes, as, since the communication of  the change of tax residence is not an element that gives rise to the right in question, the omission of such formality cannot be grounds for the non-recognition of that same right.

Accordingly, in this case, since it was proved that the taxable persons had been living in a situation similar to that of spouses for more than twenty years and that throughout those years they had been living in the same house, the Court considered that  the requirements for the joint filing of the returns were fulfilled.