Tax litigation in Portugal: problems and limitations | Opinion
(1) Last July, following the best scientific practices, we presented the preliminary results of an interdisciplinary research project – legal and empirical – whose object is tax litigation in Portugal.. All the specialists now make available and make public knowledge available with contributions to and contextualize the study, we proceed to the conclusion of the work. This is an independent and pioneering scientific investigation in Portugal, the first combining this object and this methodology.
It seems to us that the identification of the problems and constraints of the Portuguese litigation will help the construction of a diagnosis of the problems. From the development of this research, it will be possible to trace as beacons of an interface between the results obtained and an econometric study that will serve as support for proposals to improve the performance of tax justice in Portugal. The first results presented in the four finals that we invite the reader to know in the place available at CIDEEFF, Faculty of Law of Lisbon.
(2) A study of the accesses published by the Supreme Administrative Court (STA) in tax matters, its website (open), with the years 2018 and 2019 being chosen for sample purposes. analyzed data from 130 judgments. We also obtained the total time of the process, from the first instance to the STA. The identification of the case number in the first instance was possible in two situations: through the full text or through the case number contained in the STA judgments.
As for the total duration of the processes, there is some volatility in the total duration, between 51 days and 5679 days. The mean is 1770 days and the median is 1496 days. On the other hand, when we consider the duration of the STA process, there is a certain volatility in the duration of the STA processes, between 9 days and 2476 days, the average is 367 days and the median is 266 days. Delays – procedural times – reside long in the first occurrence of data and do not indicate delays. No confrontation between disputes concerning judicial matters (contentious matters), substantive (matter or law) and tax authority procedure, litigation aspects occupied an exaggeratedly high proportion in the STA: 51% of the object of litigation, compared to substantive issues (41%) and tax procedure (7%). Among the related issues, the issues of pending appeals, the absence of resource delimitation items predominate.
In Effective Tax Litigation, Taxpayers Must Have Major Problems With Substantive Interpretation. The Complex Dialogue of Substantive Tax Laws – this is the case of the IRC States and requires the development of a constant, enlightened jurisprudence, especially on the part of the higher courts, and in other similar instances, courts of other OECD Members, whether the Court of Justice of the European Union. The sample data also indicate a majority of issues of unconstitutionality of the object of problem.
The research results are more efficient in the recommendations of its main issues focused on legal issues (more complex or in the solution of trifles of State resource allocation, continued, in the courts, in the allocation of State resources).
In our study, we found, characteristics, a set of rapporteurs in the STA clearly below the average of the duration of the processes and a set of clear reports above the average of the duration, the numbers calculated after being also controlled by the typology and by the processes. This discrepancy recommends, for example, an internal evaluation of individual performances to explain such asymmetry. It is not for us to speculate on incentives, but it is not considered contextual and to consider a method of choosing cases that weighs the individual basis of the cases over the individual incentive processes in the celerity of the judges.
(3) It was also its own page and a sample of arbitration decisions handed down and published by the Administrative and Tax Arbitration Center (CAA) in the years 2016 to 2021, on the internet. Given the high number of CAAD decisions for the chosen period, the processes with the field “request value” equal to or greater than 500 thousand euros were selected for the IRC; and equal to or greater than 100 thousand euros for the following taxes: IRS; I AM T; Stamp duty; IMI and VAT. Overall, 1041 processes were analyzed. This is a sample of independent presidents (vocals) since it was not chosen according to them.
From the taxpayer’s point of view, it is important that the total duration of the CAAD process against to court – from the first instance to the decision of the STA -, gives an image of the slowness of the courts and the speed of the CAAD. This requires public authorities to reflect on the role of tax courts in the near future.
We found in the selection of a low probability relative to an authorized sample (AT) to obtain in the CAAD. This means, on the one hand, a tendency of non-decision which contributes to the Public Treasury, nor that the problem lies in a bad defense by the representatives of the Public Treasury. Data on individual taxpayer incentives at all upstream decision nodes, as observed percentages, are consistent with a certain impartiality of tax arbitration: as the appellant is always the taxpayer and the defendant is always the AT, the taxpayer is expected to have a much more significant percentage of wins than AT.
However, this probability for the AT, yes, a part of the amount, allocation of resources to the State, being necessary to understand if the problem resides upstream or downstream. For example, as entities that evaluate disputes, they must be reserved at the level of or hierarchical resources, or they can be in favor of the taxpayer, or they can also be evaluated in favor of the taxpayer; whether the tax authorities and the legislator are attentive to the jurisprudence of the CAAD and the courts and change in behavior and ambiguous legislation that gives rise to disputes; whether the economic decision regime type case is considered a good judgment environment; if the set of rules coexists with the degree of privacy of the rules and with the privacy rules.
On the other hand, we also found a limited number of specific items that are frequently repeated in the sample of other examples, most of them, a very specific number of other specific items (for example, a very small number of specific items) determination) . It is therefore recommended that decision-makers recommend and actors involved in alternative models currently existing, regarding the selection of audiences. Taking into account the statistical results of our sample and following good tax arbitration practices (to bilateral treaties and European Directives), opt for a short list of highlights of presidents and projects highlighted with a curriculum, resulting from an agreement between representatives of the taxpayers and the tax authorities. Appointment on a case-by-case basis would also result in agreement, with each party only being granted, for example, up to three names.
(4) Our study is not the end, but the beginning of an independent research agenda. The problems of administrative and fiscal justice are in the public square. It does not seem productive, and even less sustainable, to consider reforms without an accurate and detailed knowledge of the performance of the different institutions. It is in this perspective that we now make our work available to specialists, the public and authorities.
The authors write according to the new orthographic agreement