Automatic tax benefits

On September 20, 2024, the Portuguese Tax and Customs Authority presented its business plan for the coming year, placing the automatic tax benefits at the heart of its priorities. The main aim of this new strategy is to step up the fight against tax evasion and fraud, with a view to improving fairness and tax justice, while enhancing security and protection through stricter management of tax and customs fraudulent behavior.

Automatic tax benefits: Portugal to tighten controls in 2024

The Tax and Customs Authority Business Plan (AT) for 2024 focuses on several key areas to counter tax evasion and fraud. The aim is to ensure greater tax fairness, enhance public security and improve the rate of voluntary compliance, while increasing the perception of risk associated with non-compliance with tax obligations.

Key measures include :

• Customs Risk Management: Implementation of a common risk management system for all goods entering or leaving the European Union, with a particular focus on high-risk shipments.
  
• International cooperation: Intensification of international cooperation agreements and control actions at national and international level, in particular within the framework of the Customs Union.
  
• Surveillance of Declaratory Activities: Increased surveillance of economic operators, particularly those in sectors subject to specific taxes such as VAT, IEC and ISV.
  
• Enhancement of the Specific Tax Risks Application (RFE): Development of new functionalities for tracking major contributors.
  
• Criminal Investigation: Strengthening our capacity to investigate complex tax crimes, in close cooperation with the Public Prosecutor's Office.
  
• Information cross-referencing: Creation of mechanisms to cross-reference information on vehicle legislation and e-commerce in order to identify potential fraud.
  

Focus on automatic tax benefits

Automatic tax benefit control measures, in particular the Municipal Tax on the Onerous Transfer of Real Estate (ITM) and the Impôt du Sceau (IS), are reinforced. Automatic tax benefits, which are granted directly by law without the need for administrative approval, have often been subject to abuse and fraud, reducing the resources available to finance the State.

These benefits include :

• Exemption from LMI for the purchase of real estate for resale.
• Exemption for purchases of goods classified as being of national or municipal interest.
• Acquisition of goods by credit institutions.
  

The lack of rigorous controls has led to abuses in which beneficiaries have used these advantages in cases that do not comply with legal criteria, affecting the justice and efficiency of the tax system.

The new measures aim to establish a more transparent, fair and efficient tax system. By improving the control of automatic tax benefits, the TA seeks not only to increase tax revenues, but also to restore confidence in the tax system by combating tax evasion and avoidance more effectively.

For non-habitual residents and automatic profit transactions in LMI and IS, expect increased control and tax inspections in these areas. Make sure you comply with your tax obligations to avoid potential complications and associated penalties.

Don't forget that even if you're not a Portuguese resident, non-payment of taxes in Portugal can have repercussions in your country of residence. European legislation often allows tax authorities to cooperate in the recovery of unpaid taxes, which can lead to cross-border penalties.