E-LEGAL® FEBRUARY 2019

case-legal19

PREPARATION AND CONTINGENCY PLAN FOR THE EXIT OF UNITED KINGDOM OF THE EUROPEAN UNION

BREXIT Once the preparatory and contingency phases have been completed, the Portuguese Government will coordinate another exercise to identify issues and measures that will guarantee a future relationship, the longest and deepest possible, whose negotiation … Read More

I. EDITORIAL – MANDATORY REPORTING OF FINANCIAL INFORMATION

During February, certain legislation with special interest were approved and published, among which we highlight for its practical relevance the Law no. 17/2019 of February 14, which changes the previous legal framework of the mandatory reporting of financial information, binding the reporting financial institutions with the duty to communicate to the Tax and Customs Authority the information on the financial accounts held by them, whose balance or added value at the end of the calendar year exceeds € 50,000.00 (fifty thousand euros), qualifying as subject to communication, whose owners or beneficiaries are resident in national territory.

In tax matters, we highlight Law no. 9/2019 of February 1, which regulates the right to compensatory interest in case of undue payment of  tax liabilities based on unconstitutional or illegal rules, amending Article 43 of the Portuguese General Tax Law, Regulatory Decree no. 1/2019 of February 4, which establishes the universe of taxable persons subject to personal income tax  covered by the automatic income tax return and, finally, Decree-Law no. 28/2019 of February 15, which regulates the obligations relating to the invoice processing and other tax-relevant documents, as well as the obligations of VAT taxpayers to keep books, records and supporting documents.

With regard to the case-law, we distinguish the Judgment of the Court of Justice of the European Union of February 13, in the case no. C434/17, the Judgment of Supreme Court of Justice of February 5, in the Case no. 95/14.0T8BGC.G1.S1, and the Judgment of the Constitutional Court no. 73/2019 of February 21

The Constitutional Court judges unconstitutional, with general binding force, the norm contained in paragraph 2 of article 33 of Ordinance Rule no. 419-A / 2009, of April 17, in its original form, which states that “the complaint justification is subject to the deposit of 50% of the value of the note”.

Finally, in the area of miscellaneous, we would like to draw attention to the adoption of a series of laws  with the aim of consolidating the strategy defined in the New Generation of Housing Policies, as well as of the contingency measures to be applied in the event of an exit of the United Kingdom from European Union, without agreement.

III. CASE-LAW

III.1. Court of Justice of the European Union

Judgment of the Court of February 13, Case C434/17: Reference for a preliminary ruling. Harmonisation of fiscal legislation. Common system of value added tax (VAT). Directive 2006/112/EC. Deduction of VAT. Determination of the taxable person liable for VAT. Retroactive application of a derogating measure. Principle of legal certainty.
Summary: “European Union law precludes national legislation which provides for the application of a measure derogating from Article 193 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2013/43/EU of 22 July 2013, before the EU act authorising that derogation has been notified to the Member State which requested it, despite the fact that that EU act does not mention the date of its entry into force or the date from which it applies, even if that Member State has expressed the wish for that derogation to apply with retroactive effect.”
https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:62017CJ0434&from=PT

Judgment of the Court of February 14, Case C154/18: Reference for a preliminary ruling. Equal treatment in employment and occupation. Directive 2000/78/EC. Article 2(2)(b). Indirect discrimination on grounds of age. Newly recruited teachers. Date of recruitment. Salary scale and classification on that scale upon recruitment less advantageous than that applicable to teachers already employed.
Summary: “Article 2(2)(b) of Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation must be interpreted to the effect that a measure such as that at issue in the main proceedings which, as of a specific date, provides for the application on the recruitment of new teachers of a salary scale and classification on that scale which are less advantageous than that applied, under the rules previous to that measure, to teachers recruited before that date does not constitute indirect discrimination on the grounds of age within the meaning of that provision.”
https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:62018CJ0154&from=PT

Judgment of the Court of February 13, Case C434/17: Reference for a preliminary ruling. Harmonisation of fiscal legislation. Common system of value added tax (VAT). Directive 2006/112/EC. Deduction of VAT. Determination of the taxable person liable for VAT. Retroactive application of a derogating measure. Principle of legal certainty.
Summary: “European Union law precludes national legislation which provides for the application of a measure derogating from Article 193 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2013/43/EU of 22 July 2013, before the EU act authorising that derogation has been notified to the Member State which requested it, despite the fact that that EU act does not mention the date of its entry into force or the date from which it applies, even if that Member State has expressed the wish for that derogation to apply with retroactive effect.”
https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:62017CJ0434&from=PT

II. LEGISLATION

Law no. 9/2019 of  February 1: Amends the General Tax Law (LGT), approved by Decree-Law no. 398/98, of December 17, clarifying, with retroactive nature, the duty of public entities to pay compensatory interest for the tax payments, which are undue , because its collection has been based on norms declared judicially as unconstitutional or illegal.
https://data.dre.pt/eli/lei/9/2019/02/01/p/dre/pt/html

Decree-Law no. 24/2019 of February 1: Establishes the applicable rules for access to and exchange of information between the national commercial register and the commercial registers of other Member States of the European Union, transposing Directive No. 2012/17/EU of the European Parliament and of the Council, of 13 June 2012, into the internal legal system. Council, whose provisions were codified by Directive No. 2017/1132 of the European Parliament and of the Council, of 14 June.
https://data.dre.pt/eli/dec-lei/24/2019/02/01/p/dre/pt/html

Regulatory Decree no. 1/2019 of February 4: Establishes the universe of taxable persons subject of personal income tax covered by the automatic income declaration, in accordance with the provisions of paragraph 8 of Article 58-A of the Personal Income Tax Code, approved by Decree-Law No. 442- A/88 of November 30, in its current wording («IRS» Code).
https://dre.pt/application/file/a/118953724

Law no. 10/2019 of February 7: Creates the Observatory for Housing, Leasehold and Urban Rehabilitation («OHARU»), whose mission is to monitor the national urban leaseholds market’s evolution through the analysis of the evolution of market indicators, and the National Institute of Statistics («INE, I.P.»), as well as the data provided by the Institute of Housing and  Urban Rehabilitation, IP («IHRU, I.P.»), and by the municipalities, and to present to the member of the Government responsible for the area of housing annual execution reports identifying the progress achieved, eventual constraints and proposals for alternative solutions for better performance of the domestic urban leasehold market.
https://data.dre.pt/eli/lei/10/2019/02/07/p/dre/pt/html

Law no. 11/2019 of February 7: Proceeds to the second amendment of the criminal law on violations of international humanitarian law, approved in annex to Law no. 31/2004, of July 22, amended by Law no. 59/2007, of September 4, which adapts the criminal Portuguese legislation to the Statute of the International Criminal Court, typifying the crime of aggression.
https://data.dre.pt/eli/lei/11/2019/02/07/p/dre/pt/html

Ordinance no. 49/2019 of February 8: Approves the values of the revaluation coefficients of annual remunerations.

https://data.dre.pt/eli/port/49/2019/02/08/p/dre/pt/html

Ordinance no. 50/2019 of February 8: Defines the sustainability factor and normal age of access to the old-age pension.
https://data.dre.pt/eli/port/50/2019/02/08/p/dre/pt/html

Law no. 12/2019 of February 12: Prohibits and punishes harassment in the leasehold, proceeding to the fifth amendment to the New Regime of Urban Leasehold, approved by Law no. 6/2006, of February 27.
https://data.dre.pt/eli/lei/12/2019/02/12/p/dre/pt/html

Law no. 13/2019 of February 12: Establishes measures to correct situations of imbalance between tenants and landlords, to increase the security and stability of urban leasing and to protect tenants in a situation of special fragility, amending the Civil Code, the New Regime of Urban Leasehold, amending the legal regime of  construction works on leased buildings, the Decree-Law no. 156/2015, of August 10, which establishes the rent subsidy regime to be granted to tenants with housing leasehold agreements concluded before November 18, 1990, in the process of updating of the lease payment, and the Decree-Law No. 74-A/2017, of June 23, approving the system of credit agreements concerning residential properties, amended by Law no. 32/2018, of July 18.
https://data.dre.pt/eli/lei/13/2019/02/12/p/dre/pt/html

Law no. 14/2019 of February 12: Changes the functioning and framework of entities for out-of-court settlement of consumer disputes, second edition process of Law no. 144/2015, of September 8.
https://data.dre.pt/eli/lei/14/2019/02/12/p/dre/pt/html

Law no. 15/2019 of February 12: Amends the General Regime of Credit Institutions and Financial Companies («RGICSF»), approved by Decree-Law no. 298/92, of December 31, in its current version, clarifying the powers of the parliamentary committees of inquiry of the Assembly of the Republic, on the access to banking and supervisory information, concerning documentation and information strictly necessary for the compliance of its purpose, as well as, establishing transparency and scrutiny duties, obligations to which the operations of capitalization, resolution, nationalization or liquidation of credit institutions are subject, with directly or indirectly recourse to public funds.
https://data.dre.pt/eli/lei/15/2019/02/12/p/dre/pt/html

Law no. 16/2019 of February 14: Proceeds to the amendment of Law no. 52/2003 of 22 August (Law on combating terrorism), transposing the Directive 2017/541 of the European Parliament and of the Council of 15 March of 2017 on combating terrorism, and replacing the Council Framework Decision 2002/475 /JHA and amending the Council Decision 2005/671/JHA.
https://data.dre.pt/eli/lei/16/2019/02/14/p/dre/pt/html

Law no. 17/2019 of February 14: Establishes the regime of mandatory reporting of financial information.
https://data.dre.pt/eli/lei/17/2019/02/14/p/dre/pt/html

Decree-Law no. 26/2019 of February 14: Determines the amount of fees payable to the IAPMEI – Agência para a Competitividade e Inovação, I. P. (IAPMEI, I.P.), for the purposes of inclusion in the official lists of mediators, and regulates the terms of the remuneration of the business recovery mediator, in accordance with provisions laid down by Law no. 6/2018 of February 22.
https://data.dre.pt/eli/dec-lei/26/2019/02/14/p/dre/pt/html

Decree-Law no. 28/2019 of February 15: Regulates the obligations relating to the processing of invoices and other tax relevant documents, as well as the maintenance obligations of books, registers and the respective supporting documents, to which are subject the VAT taxable persons.
https://data.dre.pt/eli/dec-lei/28/2019/02/15/p/dre/pt/html

Law no. 19/2019 of February 19: the sixth amendment to the Law of the Organization of the Judiciary System, approved by Law no. 62/2013, of August 26, and second amendment to Decree-Law no. 49/2014, of March 27, which establishes the regime applicable to the organization and operation of judicial courts.
https://data.dre.pt/eli/lei/19/2019/02/19/p/dre/pt/html

Law no. 21/2019 of February 25: Regulates the transfer by air carriers of passenger identification records data, as well as the processing of such data, transposing Directive 2016/681 of the European Parliament and of the Council of 27 April 2016, and proceeds to the third amendment to Law no. 53/2008, of August 29, which approves the Internal Security Law.
https://data.dre.pt/eli/lei/21/2019/02/25/p/dre/pt/html

III.1. Court of Justice of the European Union

Judgment of the Court of February 13, Case C434/17: Reference for a preliminary ruling. Harmonisation of fiscal legislation. Common system of value added tax (VAT). Directive 2006/112/EC. Deduction of VAT. Determination of the taxable person liable for VAT. Retroactive application of a derogating measure. Principle of legal certainty.
Summary: “European Union law precludes national legislation which provides for the application of a measure derogating from Article 193 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2013/43/EU of 22 July 2013, before the EU act authorising that derogation has been notified to the Member State which requested it, despite the fact that that EU act does not mention the date of its entry into force or the date from which it applies, even if that Member State has expressed the wish for that derogation to apply with retroactive effect.”
https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:62017CJ0434&from=PT

Judgment of the Court of February 14, Case C154/18: Reference for a preliminary ruling. Equal treatment in employment and occupation. Directive 2000/78/EC. Article 2(2)(b). Indirect discrimination on grounds of age. Newly recruited teachers. Date of recruitment. Salary scale and classification on that scale upon recruitment less advantageous than that applicable to teachers already employed.
Summary: “Article 2(2)(b) of Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation must be interpreted to the effect that a measure such as that at issue in the main proceedings which, as of a specific date, provides for the application on the recruitment of new teachers of a salary scale and classification on that scale which are less advantageous than that applied, under the rules previous to that measure, to teachers recruited before that date does not constitute indirect discrimination on the grounds of age within the meaning of that provision.”
https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:62018CJ0154&from=PT

Judgment of the Court of February 13, Case C434/17: Reference for a preliminary ruling. Harmonisation of fiscal legislation. Common system of value added tax (VAT). Directive 2006/112/EC. Deduction of VAT. Determination of the taxable person liable for VAT. Retroactive application of a derogating measure. Principle of legal certainty.
Summary: “European Union law precludes national legislation which provides for the application of a measure derogating from Article 193 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2013/43/EU of 22 July 2013, before the EU act authorising that derogation has been notified to the Member State which requested it, despite the fact that that EU act does not mention the date of its entry into force or the date from which it applies, even if that Member State has expressed the wish for that derogation to apply with retroactive effect.”
https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:62017CJ0434&from=PT

III.2. Constitutional Court

Judgment of the Constitutional Court no. 73/2019 of February 21: Declare unconstitutional, with general binding force, the norm contained in paragraph 2 of article 33 of Ordinance Rule no. 419-A / 2009, of April 17, in it’s original form, which states that “the complaint justification is subject to the deposit of 50% of the value of the note”.
https://data.dre.pt/eli/actconst/73/2019/02/21/p/dre/pt/html

III.3. Courts of Justice

Judgment of the Supreme Court of Justice of February 3, Case 95/14.0T8BGC.G1.S1: Securities and Markets. Bearer securities. Nominative shares. Transmission. Mode. Burden of proof. Company resolution.
http://www.dgsi.pt/jstj.nsf/954f0ce6ad9dd8b980256b5f003fa814/331e332354a66e0e802583980043b146?OpenDocument

Judgment of the Supreme Court of Justice of February 7, Case 31/17.1T8PVZ.P1.S1: Financial intermediation. Duty of information. Obligation. Credit graduation. Financial implementation. Bank deposit. Intermediary. Bank responsibility. Suppositions. Contractual liability. Principle of trust. Principle of proportionality. Illegality. Causal link. Presumption. Extension of the factual basis.
http://www.dgsi.pt/jstj.nsf/954f0ce6ad9dd8b980256b5f003fa814/bc4393f7b87c73528025839b00371d9a?OpenDocument

Judgment of the Court of Appeal of Lisbon of February 14, Case 175/18.2TELSB.L1-9: Money laundering. Proof. Bank account.
http://www.dgsi.pt/jtrl.nsf/33182fc732316039802565fa00497eec/9538258256578cd0802583a500411fb3?OpenDocument

Judgment of the Court of Appeal of Lisbon of February 21, Case 6/16.8TELSB-D.L1-9: Electronic mail. Seizure. Judicial authorization. Suspected.
http://www.dgsi.pt/jtrl.nsf/33182fc732316039802565fa00497eec/a75d4805a5715595802583ad0030a8e0?OpenDocument

III.4. Administrative and Tax Court

Judgment of the Administrative Supreme Court of February 06, Case 01436/18.6BEBRG:  Insolvency Administrator. Court notification. Interruption of prescription.
http://www.dgsi.pt/jsta.nsf/35fbbbf22e1bb1e680256f8e003ea931/a2b52254bd1084878025839f004e791a?OpenDocument

Judgment of the South-Central Administrative Court of February 14, Case 810/05.2BEBJA:  Indispensability. Corporate income tax. Provision of services. Holding company.
http://www.dgsi.pt/jtca.nsf/170589492546a7fb802575c3004c6d7d/1202afe7211a69b8802583a20040829c?OpenDocument

IV. BRIEFS

IV.1. DOCTRINE
IV.1.1. Monographs and Periodic Publications
José Engrácia Antunes, DIREITO DO CONSUMO, Almedina, Fevereiro 2019.
Rui Patrício, A PRESUNÇÃO DA INOCÊNCIA NO JULGAMENTO EM PROCESSO PENAL, Almedina, Fevereiro 2019.

IV.1.2. Generic Guidelines & Cia
Circular Letter 90026 of 07.02.2019, of the Deputy General-Director of Collection Area
Subject: Article 19 of the General Tax Law – Resignation of tax representation – Procedures to be adopted.
http://info.portaldasfinancas.gov.pt/pt/informacao_fiscal/legislacao/instrucoes_administrativas/Documents/Oficio_Circulado_90026_2019.pdf

Circular Letter 20205 of 12.02.2019, of the Deputy General-Director of IR and International Relations
Subject: Corporate Income Tax – Surtax on taxable income for fiscal year 2018.
http://info.portaldasfinancas.gov.pt/pt/informacao_fiscal/legislacao/instrucoes_administrativas/Documents/Oficio_circulado_20205_2019.pdf
http://info.portaldasfinancas.gov.pt/pt/informacao_fiscal/legislacao/instrucoes_administrativas/Documents/Tabela_de_derrama_municipal_2018_Of_circ_20205.pdf

IV.2. Miscellaneous
IV.2.1. Economy, Finance and Taxation
The Council of Ministers, in view to improving the quality life of the population, the revitalization of cities and the promotion of social and territorial cohesion”, approved a set of diplomas consolidating the strategy defined in the New Generation of Housing Policies. These include:

  • Decree-law which creates the Right in rem of Lasting Housing (DHD), granting the possibility of a person to keep his permanent residence in an alien dwelling for a lifetime, by means of the payment of a refundable security deposit and of periodic installments.
  • Accessible Leasehold Program (PAA), which is intended to promote an extended offer of rental housing at lower prices compatible with household income.
  • Decree-law amending the rules applicable to the enforcement of coercive works necessary to correct poor safety or sanitary conditions of buildings, in cases where owners don’t comply with their legal duty, making the procedure for the execution of coercive works more operational and effective through the public intervention in cases where it is necessary to guarantee the maintenance or rehabilitation of buildings.
  • Decree-law that increases the Municipal Tax for Real Estate (IMI) for buildings in urban areas.
    https://www.portugal.gov.pt/pt/gc21/governo/comunicado-de-conselho-de-ministros?i=250

The Council of Ministers approved contingency measures to be applied in the eventual exit from the United Kingdom of the European Union without agreement, as well as:

  • proposal for a law which presupposes the equivalent treatment by the UK authorities of the Portuguese citizens residing in the United Kingdom in matters of residence, attendance at higher education, professional qualifications, social security, access to the National Health System and driving licenses, with the possibility of suspending its application if the equivalent treatment is not observed;
  • identification of support measures that the Government intends to adopt in order to create the conditions to minimize the potential economic impacts on Portuguese companies and increase their capacity to adequately respond, such as the creation of a specific line of support for companies exposed to Brexit, totalling EUR 50 million, the qualification of Business Spaces to support UK companies wishing to relocate their headquarters or open a branch in Portugal; development by Turismo de Portugal of a specific promotion campaign in the United Kingdom;
  • authorization of expenditure by the Foreigners and Border Service under the Contingency Plan for leaving the United Kingdom of the European Union, which includes the acquisition of technical resources and the hiring of human resources for border control and issuance of documents.
    https://www.portugal.gov.pt/pt/gc21/governo/comunicado-de-conselho-de-ministros?i=251

V. INDUSTRIAL PROPERTY

Appointment of the new INPI Board of Directors: The Secretary of State for Justice appointed the new Board of Directors, which will ensure the resumption of the normal operation of the INPI.
https://inpi.justica.gov.pt/Noticias-do-INPI/Nomeacao-do-novo-Conselho-Diretivo-do-INPI

INPI signs Pact for Conciliation: Initiative inserted in the “3 in Line – Program for the Reconciliation of Professional, Personal and Family Life”.
https://inpi.justica.gov.pt/Noticias-do-INPI/INPI-assina-Pacto-para-a-Conciliacao

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