Portuguese tax arbitration

An overview

  • Author: Tânia Carvalhais Pereira
  • Category of articles: Feature Articles
  • Field of Law: Stempelabgaben, VAT, Grundstückgewinnsteuer, International fiscal law, Europäisches-Steuerrecht, Direct Taxes, Indirect Taxes, Materielles-Recht, Verfahrensrecht, (Steuer)Strafrecht, Einkommens----Gewinnsteuer, Verrechnungssteuer, Vermögens----Kapitalsteuer
  • Citation: Tânia Carvalhais Pereira, Portuguese tax arbitration, ASA 92 (2023/2024)
This article is an adaptation of the presentation given at the Swiss Association of Tax Law Professors’ annual meeting on 12 June 2023, at the University of Zurich, and aims to provide an overview of Portuguese tax arbitration and the path to overcome scepticism and opposition to the resolution of domestic tax disputes in non-traditional forums. Tax arbitration entails a new way of looking at the tax justice system, one that combines judicial tax courts with other mechanisms for settling disputes that complement, rather than replace those courts. This article also reflects on the criteria for choosing between resorting to judicial tax courts or to arbitration, as well as the lessons learned from the Portuguese tax arbitration experience. Twelve years on, tax arbitration is a reality in Portugal, and in many ways a success. Its speed, the specialization and transparency make it easier to perceive the tax system as fair and to ensure effective judicial protection of taxpayers’ rights.

Content

  • I. Introduction
  • II. Economic context and constitutional and legal grounds
  • III. Overcoming opposition and scepticism
  • IV. Key features of the Portuguese tax arbitration regime
  • 1. An institutional arbitration model
  • 2. A voluntary arbitration model
  • 3. Public selection, appointment and specialization of arbitrators
  • 4. High ethical standards
  • 5. Cost of proceedings and democratized access
  • 6. Speed
  • 7. Publicity, transparency, and simplicity
  • 8. Limitation on the grounds of appeal
  • 9. Fast track to the European Court of Justice (ECJ)
  • V. Lessons from the Portuguese tax arbitration experience and future considerations
  • VI. Judicial Tax Courts vs. Arbitration: which to choose and what to consider?
  • VII. Final remarks