I. EDITORIAL – NON-HABITUAL RESIDENTS – AMENDMENT OF HIGH ADDED VALUE ACTIVITIES TABLE
For the month of July, we highlight the Ordinance no. 230/2019 of 23 July, which introduced into the legal regime of taxation of non-habitual residents (“NHR”), provided for in Article 72, paragraph 10 and Article 81, paragraph 5 of the Personal Income Tax Code, a new high added value activities table, amending the Ordinance no. 12/2010 of 7 January, which initially approved the respective table. From 01/01/2020, the new list of high added value activities in the taxation of the NHR, will be based on the codes and the interpretation of the Portuguese Classification of Professions, being required to the workers that exercise such activities, in order to be qualified under this legal regime, the fulfilment of one of the following requirements: (i) being the holder of the level 4 of European Qualifications Framework, (ii) being the holder of the level 35 of the International Standard Classification of Education, (iii) have five years of duly attested professional experience.
The month of July was also marked by the creation, through Ordinance no. 233/2019 of 25 July, of the system of notifications and summons made by electronic transmission of data in a reserved area of the Tax and Customs Authority website (« NCEPF»), foreseen in the article 38 -A of the Tax Process and Procedure Code, and by the amendment of the Civil Procedure Code, through Decree-Law no. 97/2019 of July 26, with various measures to streamline and promote the procedural speed, transparency and proximity of the citizens to the judicial system.
Regarding case-law, it is worth noting the Judgment of the Constitutional Court no 298/2019, in Case – Law no. 1043/17 which decides to judge unconstitutional, with the violation of the nemo tenetur se ipsum accusare principle, the normative interpretation of the articles 61, paragraph 1, point d), 125 and 126, paragraph 2, point a), all of the Code of Criminal Procedure, according to which the relevant tax documents obtained under the duty of cooperation by a tax inspection realized on a taxpayer, during the investigation phase of a criminal proceeding for committing a tax crime against the inspected taxpayer and without the prior knowledge or decision of the competent judicial authority, may be used as proof in the same process.
Finally, in the area of Miscellaneous, it was approved by the Council of Ministers the transference to the Portuguese Securities Market Commission the supervision competences of the investment fund management companies and securitization fund management companies.
II. LEGISLATION
Ordinance no. 201-A/2019 of July 1: Updates the amount of the fees and provides for new fees resulting of the acts inserted in the new Code of Industrial Property and revokes the Ordinance no. 1098/2008 of September 30.
https://dre.pt/application/file/a/122760122
Ordinance no. 202/2019 of July 3: Defines the terms and criteria applicable to the pilot project to be adopted under the consumer incentive system for returning non-reusable plastic beverage packaging.
https://dre.pt/application/conteudo/122891077
Decree-Law no. 89/2019 of July 4: Amends the collective management entities of copyright and related rights.
https://dre.pt/application/conteudo/122920907
Declaration Ratification no. 32/2019: Introduces the attached to Ordinance no. 201-A / 2019 of 1 July tables.
https://dre.pt/application/conteudo/122920908
Ordinance no. 214/2019 of July 5: Defines the measure to Support the Return of Emigrants to Portugal, under the «Regressar» Program, created by Resolution of the Council of Ministers no. 60/2019, of 28 March.
https://dre.pt/application/conteudo/122960401
Decree-Law no. 94/2019 of July 16: Approves the public heritage rehabilitation plan for affordable lease.
https://dre.pt/application/conteudo/123183036
Decree-Law no. 95/2019 of July 18: Establishes the regime applicable to the building or building unit rehabilitation.
https://dre.pt/application/conteudo/123279819
Ordinance no. 228/2019 of July 22: Sets the terms for the registration referred to in Article 5 of Decree-Law no. 42/2019 of 28 March, which creates a simplified regime for the assignment of mass claims.
https://dre.pt/application/conteudo/123368226
Ordinance no. 230/2019 of July 23: Approves the new table of activities of high added value for the purposes of the provisions of Articles 72, paragraph 10, and 81, paragraph 5 of the Personal Income Tax Code, amending the Ordinance no. 12/2010, of January 17.
https://dre.pt/application/conteudo/123407856
Ordinance no. 233/2019 of July 25: Regulates the legal framework of the notices and summons by electronic data transmission in the reserved area of the Tax and Customs Authority website, nominated as «Notificações e Citações Eletrónicas – Portal das Finanças (NCEPF)», foreseen in article 38º – A of the Tax Process and Procedure Code.
https://dre.pt/application/conteudo/123473733
Decree-law no. 97/2019 of July 26: Proceeds to the amendment of the Civil Procedure Code, amending the electronic proceedings framework of the judicial procedures.
https://dre.pt/application/conteudo/123513819
III. CASE-LAW
III.1. Court of Justice of the European Union
Judgment of the Court of 3 July 2019, Case C-316/18: Reference for a preliminary ruling. Value added tax (VAT). Deduction of input tax. Management costs of an endowment fund that makes investments with the aim of financing the whole of the taxable person’s output transactions. Overheads.
Summary: “Article 168(a) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that a taxable person that (i) is carrying out both taxable and exempt activities, (ii) invests the donations and endowments that it receives by placing them in a fund and (iii) uses the income generated by that fund to cover the costs of all of those activities is not entitled to deduct, as an overhead, input value added tax paid in respect of the costs associated with that investment.”
http://curia.europa.eu/juris/document/document.jsf?text=&docid=215765&pageIndex=0&doclang=en&mode=lst&dir=&occ=first&part=1&cid=3684399
Judgment of the Court of 10 July 2019, Case C-273/18: Reference for a preliminary ruling. Common system of value added tax (VAT). Directive 2006/112/EC. Right to deduct input VAT. Article 168º.Goods supply chain. Refusal of the right to deduct on account of that chain’s existence. Obligation on the competent tax authority to establish the existence of an abusive practice.
Summary: “Article 168(a) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2010/45/EU of 13 July 2010, must be interpreted as meaning that, for the purposes of refusing the right to deduct input value added tax (VAT), the fact that an acquisition of goods took place at the end of a chain of successive sale transactions between several persons and that the taxable person acquired possession of the goods concerned in the warehouse of a person forming part of that chain, other than the person mentioned as supplier on the invoice, is not in itself sufficient to find the existence of an abusive practice on the part of the taxable person or the other persons participating in that chain, the competent tax authority being required to establish the existence of an undue tax advantage obtained by that taxable person or those other persons.”
http://curia.europa.eu/juris/document/document.jsf?text=&docid=216043&pageIndex=0&doclang=en&mode=lst&dir=&occ=first&part=1&cid=3684399
Judgment of the Court of 11 July 2019, Case C-502/18: Reference for a preliminary ruling. Transport. Common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights. Regulation (EC) No 261/2004. Article 5(1)(c). Article 7(1).Right to compensation. Connecting flights. Flights consisting of two flights operated by different air carriers. Long delay in relation to the second flight with points of departure and arrival outside the European Union and operated by a carrier established in a non-Member State.
Summary: “Article 5(1)(c) and Article 7(1) of Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91, read together with Article 3(5) of Regulation No 261/2004, must be interpreted as meaning that, in the case of connecting flights, where there are two flights that are the subject of a single reservation, departing from an airport located within the territory of a Member State and travelling to an airport located in a non-Member State via the airport of another non-Member State, a passenger who suffers a delay in reaching his or her destination of 3 hours or more, the cause of that delay arising in the second flight, operated, under a code-share agreement, by a carrier established in a non-Member State, may bring his or her action for compensation under that regulation against the Community air carrier that performed the first flight.”
http://curia.europa.eu/juris/document/document.jsf?text=&docid=216062&pageIndex=0&doclang=en&mode=lst&dir=&occ=first&part=1&cid=3684399
III.2. Constitutional Court
Judgment of the Constitutional Court no. 298/2019, Case-law no. 1043/17: Decides to judge unconstitutional, for breach of the nemo tenetur se ipsum accusare principle, enshrined in the article 32, paragraph 1 of the Constitution of the Portuguese Republic, the normative interpretation of the articles 61, paragraph 1 point d), 125 and 126, paragraph 2 point a), all of the Code of Criminal Procedure, according to which the relevant tax documents obtained under the duty of cooperation foreseen in article 9 paragraph 1, of the Complementary Regime for the Process of Tax Inspection, and article 59 paragraph 4, of the General Tax Law, by a tax inspection realized on a taxpayer, during the investigation phase of a criminal proceeding for the commission of a tax crime against the inspected taxpayer and without the prior knowledge or decision of the competent judicial authority, may be used as evidence in the same process.
https://www.tribunalconstitucional.pt/tc/acordaos/20190298.html
III.3. Courts of Justice
Judgement of Supreme Court of Justice of July 4, Case no. 113/17.0T8CNF.C1.S1: Notarial deed. Full probative force. Division of common thing. Powers of the supreme court of justice. Modifiability of the de facto decision. Authentic document. Powers of the court of appeal. Patio. Good faith Possession. Precarious possession. Usucaption.
http://www.dgsi.pt/jstj.nsf/954f0ce6ad9dd8b980256b5f003fa814/4bd94aed6cea1c298025842d004c8b49?OpenDocument
Judgement of Supreme Court of Justice of July 4, Case no. 6268/17.6T8VNF.G1.S: Abuse of rights. Right to information. Public limited company. Judicial inquiry. Impaired knowledge. Remittance of the Case to the appealed court.
http://www.dgsi.pt/jstj.nsf/954f0ce6ad9dd8b980256b5f003fa814/445f8e48ee0dff328025842d00563fbc?OpenDocument
III.4. Administrative and Tax Court
Judgement of Supreme Administrative Court of July 11, Case no. 064/19.3BEPRT: Payment by instalments. Untimeliness. Date. Marking. Sale.
http://www.dgsi.pt/jsta.nsf/35fbbbf22e1bb1e680256f8e003ea931/ec39fa070db7ad078025843b002e7d3f?OpenDocument&ExpandSection=1#_Section1
Judgement of Supreme Administrative Court of July 11, Case no. 064/19.3BEPRT: Opposition to tax enforcement. Fundamentals. Lack of essential executive title requirements.
http://www.dgsi.pt/jsta.nsf/35fbbbf22e1bb1e680256f8e003ea931/004bf112f40c94d08025843b003bc095?OpenDocument
IV. BRIEFS
IV.1. DOCTRINE
IV.1.1. Monographs and Periodic Publications
Luís M. Alves e Marlene Teixeira de Carvalho, ELUCIDÁRIO ADMINISTRATIVO E TRIBUTÁRIO, AAFDL, julho de 2019.
Manuela Patrício, Direito do Turismo e Alojamento Turístico, Almedina, julho de 2019.
IV.1.2. Generic Guidelines & Cia
Circulate Letter of 05.07.2019, of Deputy General Director of Dunning Area
Subject: Electronic registration as Non-Habitual Resident (Article 16, paragraph 10 of Personal Income Tax Code) – Creation of “SUSPENSO” status
http://info.portaldasfinancas.gov.pt/pt/informacao_fiscal/legislacao/instrucoes_administrativas/Documents/Oficio_Circulado_90027_2019_Cobranca.pdf
IV.2. Miscellaneous
IV.2.1. Economy, Finance and Taxation
The Council of Ministers approved on 4 July 2019 one amendment to the rules of the 200M co-investment Fund (200M Fund), with the aim to simplify and reinforce the investment operations capital and quasi capital in the small and medium-sized enterprises (SME).
The legislative amendment allows the possibility of equivalence between the national co- investors and the foreigner co-investors for the purposes of investment in start-ups and Portuguese SME, with recourse to the 200M Fund, thus expanding the universe of potential co-investors. In addition to this amendment is the necessity, as evidenced by the practical experience gained during its operation, to make the management of the 200M Fund more flexible without compromising the fallow-up and supervision of the authorities.
https://www.portugal.gov.pt/pt/gc21/governo/comunicado-de-conselho-de-ministros?i=286
Also, the Council of Ministers on 18 July 2019 approved the amendment of the vehicle registration system, the regulation of the vehicle registers and the Single automobile document.
This law pretends to simplify and dematerialize the administrative proceedings of the vehicle registration, through use of new technological functionalities and the data interoperability, being this measure a part of a policy of improvement of the information access by the citizens and companies.
https://www.portugal.gov.pt/pt/gc21/governo/comunicado-de-conselho-de-ministros?i=290
Finally, it was also approved on 18 July 2019 by the Council of Ministers the transfer to the Portuguese Securities Market Commission the supervision competences of the investment fund management companies and securitization fund management companies.
This transfer aims to eliminate the overlap and redundancies in the supervision of these companies, as well as to reduce the excessive bureaucratic demands which damage the asset management sector.
Credit funds are also created, which will constitute a complementary financing channel for Portuguese companies.
https://www.portugal.gov.pt/pt/gc21/governo/comunicado-de-conselho-de-ministros?i=290
V. INDUSTRIAL PROPERTY
Cessation of remanding e-mails sending: The new Industrial Property Code brings various amends, including the increase of notifications issued by the INPI, making the remanding emails, in the deadline for replay of the notification, dispensable and repetitive.
https://inpi.justica.gov.pt/Noticias-do-INPI/Cessacao-do-envio-de-e-mails-recordatorios-no-decurso-do-prazo-de-resposta-a-notificacao
Chile join Design View: From July 22, 2019, the National Institute of Industrial Property of Chile (INAPI) joined the DesignView database.
https://inpi.justica.gov.pt/Noticias-do-INPI/Chile-adere-ao-Design-View
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