Deadline for regularisation by AT (tax authority)

Law number 7/2021 of February 26 reinforced taxpayer guarantees and simplified tax procedures, having amended the General Tax Law, the Tax Procedure and Procedure Code, the General Tax Violations Regime and other legal diplomas.

After years of demands, this diploma enshrines fundamental changes, namely: (i) “Fiscal holidays”; (ii) Alteration of the certified accountant’s subsidiary liability regime; (iii) Improvement of the fine waiver and mitigation regime; (iv) Clarification of the obligation to make the declaration forms available 120 days in advance and (v) the determination of a 60-day period within which the tax administration must proceed with the restoration of legality.

The establishment of a period of 60 days for the Tax Administration to regularise the situation of illegality has enhanced the effective simplification of the tax process, which, in turn, materialises the taxpayers’ guarantees.

Tax law is subject to high tension since taxpayers, although they accept the purpose of the tax, do not want to pay more than they should. In the event of illegality on the liquidation of the tax, either because certain expenses that should have been considered were not considered, or because the tax rate to be levied is discriminatory in relation to other types of taxable persons in this controversial material relationship, the reality is that it constitutes an absolutely harmful act, one which damages the taxpayers’ ability to pay and, consequently, that is against all guarantees arising from this fundamental right.

The principle of access to tax justice enshrined in article 8 of the General Tax Law guarantees access to justice for full and effective protection of all legally protected rights or interests. Thus, all acts in tax matters that infringe upon legally protected rights or interests are subject to challenge or appeal under the terms of the law. The acts considered harmful are described in a non-exhaustive manner in article 95, paragraph 2 of the General Tax Law.

The rejection, express or tacit, total or partial, of claims, appeals or requests for review or reform of the liquidation, is effectively a harmful act, legally protected and, therefore, access to justice must be allowed.

From the joint reading of paragraphs 1 and 2 of the new article 100 of the General Tax Law, it appears that the tax administration is obliged, in the case of total or partial merits of complaints or administrative appeals, or of legal proceedings in favour of the taxable person, to the full reconstitution of the situation that would have existed if the illegality had not been committed, including the payment of indemnity interest, being certain that in the tax procedure, this must be executed within 60 days, after which the indemnity interest starts to count.

It can also be read, in the new article 61 of the Code of Procedure and Tax Procedure that “the payment of indemnity interest is not subjected to procedural impetus from the taxpayer initiative”.

In short, these changes have reinforced the taxpayers’ guarantees, establishing a deadline that allows them to immediately react to the illegality committed by the finances services (local, central or regional) and which is imposed by the success, total or partial, of complaints or administrative appeals, or of legal proceedings in favour of the taxable person, after the 60-day period provided for in the aforementioned terms.

By Dr. Eduardo Serra Jorge

Dr. Eduardo Serra Jorge is founding member, senior partner and CEO of lawyers firm Eduardo Serra Jorge & Maria José Garcia – Sociedade de Advogados, R.L., created in 1987.
In his column, he addresses legal issues affecting foreign residents in Portugal.
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