The past January 28 marked the release of (yet another) Order of the Secretary of State for Tax Affairs (henceforth SSTA), Order no. 33/2022-XXII, regarding the Stamp Duty Return.
The Stamp Duty Return is intended to comply with the obligation foreseen in article 52-A of the Stamp Duty Code (SD Code) and must be submitted by taxpayers referred to in Article 2(1) of the SDC, or their legal representatives, who have undertaken operations, acts, contracts, documents, titles, papers and other legal facts or situations foreseen in the General Stamp Duty Table, on which stamp duty is levied.
This declaration must always be submitted by taxpayers, whether they have paid tax or have only carried out exempt transactions. In other words, there is no obligation to submit this return only if no operation subject to stamp duty was carried out in the reference period.
Article 52-A of the SD Code was introduced through the State Budget Law for 2018, and has been altered by Law no. 119/2019. It establishes yet another reporting obligation on the taxpayers, in particular on financial sector entities, which, in addition to ensuring the conclusion of the monthly tax assessment process with its delivery to the State’s treasury, allows the submission to the Portuguese Tax Authorities (henceforth PTA) of a detailed list of all operations and transactions which, although possibly exempt, are subject to Stamp Duty.
However, since its inception, the implementation of this regime has been causing issues, which, more than 4 years passed, remain.
Context
In the October 1 of 2019, the Ministerial Order no. 339/2019 was published, establishing official model of the Stamp Duty return and respective instructions for completion.
Shortly after, on October 31 of 2019, the SSTA[1], considering that the appropriate technical and human conditions for taxable persons to fulfil their obligations were not met, established that the declaration and payment obligations, regarding the return for the months of January and February 2020, could be fulfilled until April 20 2020, without any penalties.
On March 24 of 2020, the SSTA delayed the application of the SD return until January 1 of 2021[2].
On February 12 of 2021, the SSTA, considering that the PTA was not yet been able to clarify the doubts resulting from the application of the new return, said that the returns submitted with “mere errors” may be replaced, until the end of the first semester of 2021, without any penalty [3]. The application of this instruction was later, on July 8 of 2021, extended until the end of 2021[4].
Most recently, as mentioned, Order no. 33/2022-XXII extended the application of two previous Orders:
The mentioned Order no. 42/2021-XXII, which was extended (once again) until the end of 2022;
Order no. 27/2021-XXII, which provisionally allowed the use of the Tax Identification Number (TIN) 999 999 990, in situations in which it was not possible to enter the respective TIN, due to lack of knowledge not attributable to the taxpayer, provided that the necessary steps were taken to obtain this information. This Order has also been extended until the end of 2022, and the PTA was urged to consult the relevant supervisory authorities, namely in the banking and insurance sectors, with a view to present a permanent solution for situations of lack of knowledge of the TIN that cannot be imputed to the taxpayer.
In essence, the issue, at this point, consists on obtaining the TIN of the entity bearing the tax liability, ie. the person who bears the tax and who is normally the taxpayer’s customer.
As such, a TIN (or equivalent) must be indicated if the person or entity liable for the tax is a person or entity that is not resident in Portugal, which may not have – because it is not, for example, legally required to – information on this identification element.
Final remarks
In the current climate, we often see the development of tax reporting obligations impending on Portuguese taxpayers, especially relating to cross border operations.
In the case under analysis, especially regarding the demand for a TIN when operations with foreign entities are in play, the solution adopted has proven to be unpractical (to say the least).
Four years passed, the PTA is struggling with the implementation of the regime established in article 52-A of the SD Code, with the taxpayers being left unable to properly fulfil obligations and even risk incurring in penalties, given the uncertainty caused by the ever changing understanding of the competent bodies on this tax matter.
It begs the question, is the regime, as it stands, unenforceable?
Maria Lima Ferreira
Fevereiro 2022
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[1] Order no. 5/2019-XXII.
[2] Order no. 121/2020-XXII.
[3] Order no. 42/2021-XXII.
[4] Order no. 224/2021-XXII.