During the conference “The Future of Tax Litigation,” which spanned two days and focused on the report prepared by the Commission for the Review of the Tax Process and Procedure and Taxpayer Guarantees, discussions were held. This report, submitted to the Government in May, was presented over the past two days at the Ministry of Finance in Lisbon.
“We have an obligation to inform better. The principle of cooperation, which was mentioned here, is evidently our priority. A significant part of this friction, or this apparent unavailability [perceived] on our part, needs to be addressed,” stated Helena Borges.
The Director-General of AT acknowledged that, as a key initiator of litigation processes, the tax authority holds part of the responsibility for the number of cases reaching the courts. However, she emphasized that the tax administration has been striving to reduce the number of disputes in recent years, including through agreements during the inspection phase of taxpayers.
The Director-General noted the importance of considering the resource capacity of the Finance Ministry, which has fewer workers than a decade ago, alongside new international demands (cooperation with other authorities).
“We manage the resources we have, and that is very important,” she said. “In the last ten years, it’s evident that executive processes have increased from five million to 25 million. We have a substantial number of obligations in the international sphere, significant transformations in the functioning of the tax system, and 14% fewer resources than we had ten years ago—1,400 fewer people. Therefore, we must ensure our priorities are well-defined,” she added.
Cláudia Reis Duarte, Secretary of State for Fiscal Affairs, spoke next about litigation processes, acknowledging that, “regardless of how good the legislation is, and how informed taxpayers are,” disputes will always occur.
“Litigation will always occur,” she said, considering the study of measures to prevent “bad litigation.” However, she did not disclose what the Government intends to do in this area.
The reform commission, led by lawyer Rogério Fernandes Ferreira, includes proposals for amendments to the General Tax Law, the Tax Procedure and Process Code, the Legal Regime of Tax Arbitration, and the General Regime of Tax Infractions, in addition to regulations on tax enforcements and procedural costs, among other legislation.
One of the suggestions presented to the Government is to penalize AT if the tax authority litigates in bad faith in court.
This involves adding an article to the LGT, stating that “the tax administration and the taxpayer may be sentenced to a fine and compensation for bad faith litigation, under the terms of the general law,” presumed as “acting in court against the content of general guidelines or binding information previously provided” to taxpayers.
Another proposal is to set a maximum period of 20 years for the statute of limitations on tax debts, even when there are interruptions and suspensions in the counting.
