Tax analysis
July 14 | 2015 | Tax Law Practice Area
ORDER NO. 172/2015, OF JUNE 5TH, APPROVING THE VAT DEDUCTION
ON THE IRRECOVERABLE CREDITS IN FAVOR OF THE VAT TAXABLE
ENTITY BY SUBMISSION OF A PRIOR APPROVAL REQUEST BY
ELECTRONIC MEANS
Under article No. 78-B, paragraphs 1 and 10 of the Portuguese VAT Code,
the deduction in favor of the taxable entity of VAT amounts regarding irrecoverable credits under article No. 78-A, p.2 a) of the Portuguese VAT Code,
is subject to a prior approval request to be presented through the Portuguese Tax Authorities website (Portal das Finanças), as per the approved
forms and procedures regulated by Order from the Portuguese Ministry of
Finances.
Those forms and procedures are now approved by this Order, and requests
may be submitted, allowing the deduction of VAT regarding matured credits
since January 1st of 2013 (due to the transitory provisions of Portuguese
State Budget Law of 2013).
As such, past credits due since said date that remain unpaid may now be
considered irrecoverable credits, under article No. 78-A of the Portuguese
VAT Code.
The electronic request should be submitted at the Tax Authorities website, within
6 months from the date in which those credits were considered as irrecoverable
credits, under article No. 78-B of the Portuguese VAT Code. Also, this request
may include one or more invoices as long as the invoices:
i) refer to to the same client;
ii) are certified by the same certified public accountant (ROC).
The approved form needs to include the following information: taxpayer
number of the client, taxpayer number of the ROC certifying the invoices,
invoice number (as communicated through the electronic invoice system if
applicable), issuing date, due date, tax period in which the respective declaration was submitted, taxable income, total VAT amount and, finally, the proposed VAT deduction.
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Tax analysis
ORDER NO. 172/2015, OF JUNE 5TH, APPROVING THE VAT DEDUCTION ON
THE IRRECOVERABLE CREDITS IN FAVOR OF THE VAT TAXABLE ENTITY BY
SUBMISSION OF A PRIOR APPROVAL REQUEST BY ELECTRONIC MEANS
Following the form submission, the request is processed and validated and a preliminary
acceptation is confirmed by the Tax Authorities within two days upon submission. The
ROC must then confirm that certified the submitted data on the invoices and respective periods within ten days otherwise the request is automatically rejected.
Note that any change to a request will determine the cancelling of this request, and
substitution by a new one. Any changes on a request can only be made until certification by the ROC.
Within a maximum term of 8 months, the taxable entity is then notified of the approval or refusal of the request. The following debts will be tacitly approved after the
above mentioned period:
i) Credits lower than € 750.00 that were due for more than six months by natural
persons or legal entities that exclusively do VAT exempted operations or that do
not confer the right to deduct VAT;
ii) Credits under enforcement legal proceedings, after the legal procedure is registered in accordance to article No. 717, No. 2, b) of the Portuguese Civil Procedure
Code;
iii) Credits claimed under insolvency procedures, when it is qualified as limited or
after the homologation of the report of the insolvency administrator by the General
Creditors Assembly, as per article No. 156 of the Portuguese Insolvency Code;
iv) Credits claimed under Special Recovery Procedure, after the recovery plan is
approved by the judge, as per article No. 17-F of the Portuguese Insolvency Code;
v) Credits claimed under the Extra-Judicial System of Corporate Recovery, after
signing the agreement as per article No. 12 of Decree-Law no. 178/2012, of August
3rd;
vi) Other credits that may be considered as irrecoverable that are lower than €
150,000.00 (VAT included).
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Tax analysis
ORDER NO. 172/2015, OF JUNE 5TH, APPROVING THE VAT DEDUCTION ON
THE IRRECOVERABLE CREDITS IN FAVOR OF THE VAT TAXABLE ENTITY BY
SUBMISSION OF A PRIOR APPROVAL REQUEST BY ELECTRONIC MEANS
Tax Authorities retain the right to review the requests mentioned under paragraph vi)
above, under the general rules.
On the remaining situations, the submitted requests are considered rejected if the
Tax Authorities do not issue a decision within 8 months.
Finally, the non-fulfillment of all requirements by any of the submitted credits implies
the rejection of the all credits under that request.
This Order enters into force on the day following its publishing (June 6th) and produces
its effects since January 1st, 2015.
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