With the publication of Law no. 120/2019, of 19 September, Portugal implemented the Directive (EU) 2017/1852 of 10 October 2017, establishing the rules on tax dispute resolution mechanisms involving the competent authorities of Portugal and other EU Member States concerning the interpretation and application of international agreements and conventions to avoid double taxation of income, also setting the rights and obligations of any interested party in relation to their disputes.

According to this regime, taxpayers have a 3 years deadline to submit a claim to the respective national competent authority on any international (EU) double taxation issues. It is also established that the exercise of this right by the interested party does not constitute an impediment to the exercise of the right to appeal or challenge, under the terms set out in Portuguese law or the law of another country involved in the dispute.

Once the complaint has been submitted, the national competent authority shall decide whether to accept or reject it within six months of its receipt and shall issue a final decision within 2 years of acceptance of the claim (a maximum extension of 1 year is allowed).

It is also foreseen that, if an agreement is reached between all the competent authorities concerned in this respect, the decision will be binding on the national competent authority and enforceable by the taxpayer (provided that the taxpayer accepts it and, if any other appeal is pending, renounces it). Furthermore, if it is not possible to reach an agreement between the national competent authority and the other competent authorities involved in the dispute, the person concerned must be notified of this fact and the reasons for it.

If the decision is not favourable, the taxpayer may use its domestic appeal mechanisms or appeal to the Advisory Commission.

Once established, the Advisory Commission will issue an opinion and an agreement shall be reached between the national competent authority and the other competent authorities concerned within six months of notification of the opinion (it will not be necessary for this agreement to have the same content as the opinion). In the absence of an agreement between these authorities, the opinion shall be binding on the national competent authority.

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