The notion of tax [PT National report for IFA Cahiers of International Taxation, Vol. 101, n.º 2, 2016]

IFA Cahiers of International Taxation, Vol. 101, n.º 2, 2016

20 Pages Posted: 14 Aug 2020 Last revised: 7 Mar 2022

See all articles by João Félix Pinto Nogueira

João Félix Pinto Nogueira

International Bureau of Fiscal Documentation; Law School - Catholic University of Portugal (UCP); University of Cape Town (UCT)

Date Written: July 6, 2016


This article was drafted as the Portuguese national report of the IFA annual congress whose main topic was the notion of tax. It explores comprehensively how this notion shall be understood in the context of the Portuguese tax system. The concept of tax is probably one of the most debated concepts in tax law of recent decades. However, the debate has mostly focused on assessing whether the system of guarantees set for taxes needed to be granted to other levies that, despite their characterization, have to be substantially considered as taxes. Nonetheless, there was no noticeable debate on which conditions foreign levies should meet in order to be considered as taxes (under the Portuguese unilateral or convention system) in order to be credited against Portuguese income taxes. Unlike many others, the Portuguese income tax system is clear, simple and easy to administer. Since the comprehensive income tax reform of the late 1980s, all income taxation has been gathered in two major codes (one for individuals and the other for other entities; there is also a surcharge, but it is on top of the latter). These codes are very conceptually designed based on the pivotal notion of revenue increase ("rendimento-acréscimo") according to which any increase in the acquisitive capacity of the taxpayer is considered income (and in general assessed as a difference between the value of the assets at the beginning and at the end of the taxing period, including capital gains and unexpected income). Despite all the numerous changes, the underlying principle-based concept of income still remains present. There are a few small deviations, most of them designed to prevent abuse or to regulate cases where real income is impossible to ascertain. The domestic law sets different criteria for the comparability of foreign income taxes with domestic taxes, in the framework of subject-to-tax clauses embedded in Portuguese domestic rules. Those criteria are "identical or substantially similar" and "similar or identical" for individuals and "similar or identical nature" and "identical or analogous tax" for other than individuals. Regardless of these nuances, in substance the test used is always the same and requires that the foreign tax is comparable, without major differences, to domestic income taxes. A comprehensive examination of the Portuguese income tax treaty network shows some consistency in the solutions agreed by Portuguese negotiators. Apart from old texts, Portugal always includes in its list of taxes covered personal and corporate income tax and the municipal surcharge on the latter. There are no deviations in entitlement, allocation rules or relief of double taxation that lead to any different understanding of what income taxes are. When it comes to non-income tax treaties or instruments regulating administrative assistance between tax authorities, the diversity increases. In general Portuguese (recent) treaties include major exchange of information clauses, allowing for mutual assistance beyond the list of taxes covered. Also broad is the list of taxes covered by Portuguese tax information exchange agreements (TIEAs), which normally also include stamp duty. Even broader is the list of taxes in the joint OECD/EU multilateral convention. To be further considered in this context is the assistance allowed under some EU law secondary instruments that includes, as well as taxes, fees, fines, surcharges, interest and other connected costs. To sum up, the Portuguese system offers a real alternative and a solution to many of the issues found in other jurisdictions. The recipe for the solution to those issues is, in a nutshell:

(a) combining all income taxes in a limited number of tax codes;

(b) keeping a strong dogmatic consistency in the underlying concept of income taxes;

(c) ensuring its administration at a single state level (even if allowing the participation of lower public entities in the definition of certain elements of taxes); and

(d) keeping stability in the list of taxes covered under tax treaties and avoiding any deviations in entitlement, allocation or relief rules.

Keywords: Taxation, Tax Law, European Taxation

JEL Classification: K33, K34, F13, E62, D78, E62, F02, F23, F42, H20, H22, H23, H25, H26, H87, O19, O23, O24

Suggested Citation

Pinto Nogueira, João Félix, The notion of tax [PT National report for IFA Cahiers of International Taxation, Vol. 101, n.º 2, 2016] (July 6, 2016). IFA Cahiers of International Taxation, Vol. 101, n.º 2, 2016, Available at SSRN:

João Félix Pinto Nogueira (Contact Author)

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