
The report on the evolution of fines has been presented by the office of the Secretary of State for Fiscal Affairs, Cláudia Reis Duarte, in the latest 2024 report on combating tax and customs fraud and evasion, submitted to parliament last week.
The document reveals that after about 26 million euros in debts were considered written off in 2023, debts to the AT amounting to 290.2 million euros expired in 2024, marking an increase of 264.3 million compared to the previous year, a difference exceeding 1,000%.
The government acknowledges this amount as “exceptionally high” and, in justifying the increase, emphasizes that the “declaration of prescription does not indicate ineffectiveness of the services” of AT, stressing that the “timely” assessment of cases ensures “legal security and certainty, as well as the quality and efficiency of the enforcement systems” to avoid “unnecessary coercive actions and litigation”.
In this instance, the surge in the value of debts that the tax office can no longer collect once they expire is not due to an exceptional increase in prescriptions on taxes that generate significant revenue, such as VAT, IRS, or IRC, but rather due to an increase in prescriptions on “other fiscal debts, specifically the exceptionally high value related to fines”.
The report notes that the increase is “justified by a central action of automatic prescription of fines, framed within the prescription of official recognition,” outlined in article 175 of the Tax Procedure and Process Code (CPPT), which states that prescriptions are “officially acknowledged by the judge if the enforcement body previously involved did not do so”.
While the increase in prescriptions in the “other fiscal debts” segment was 3708%, in VAT it was 38%, in IRC it was 4.3%, and in IRS it was 45%.
In total, 12.3 million euros in VAT debts expired, along with 6.3 million euros in IRC debts and 5.8 million in IRS debts.
The other fiscal debts amounted to 265.8 million euros, compared to just seven million in the previous year.
Generally, a tax debt prescribes eight years after the year “in which the tax obligation-generating event occurred, or from the end of the year in which the tax event was verified, depending on whether it is a one-time or periodic tax obligation”, except when legal reasons suspend and interrupt the counting of that period, the government notes in the report.
In the same document, overseen by the Secretary of State for Fiscal Affairs, the government also accounts for the tax debts canceled by the AT.
In 2024, cancellations totaled 824 million euros, a decrease of 4.3% compared to 2023, when the amount was 861 million.
However, the number of cancellations increased by approximately 64%, rising from 259,973 processes to 425,336. The increase is “mainly” due to “death/cessation of the offender”.
“The cancellations of debts mainly arise from the submission of replacement declarations to correct errors made by taxpayers, the success of appeal or complaint procedures, the death or cessation of the offender, and cancellations by decision of the creditor entity,” the report explains.