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Changes The Article 22 Of The Code Of Value Added Tax, Approved By Decree-Law No. 394-B/84 Of 26 December

Original Language Title: Altera o artigo 22.º do Código do Imposto sobre o Valor Acrescentado, aprovado pelo Decreto-Lei n.º 394-B/84, de 26 de Dezembro

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Parliamentary Group


Decreases deadlines for the refund of VAT and fixes new deadlines and procedures for effective tax delivery

in economic relations with the Public Administration,

[Changes the Value Added Tax Code (VAT), approved by the Decree-Law No. 394-B/84, of September 26]

The Value Added Tax Code maintains, unfortunately without amendment, some very unreasonable provisions, in particular with respect to the maintenance of certain deadlines and for the preservation of certain procedures. In the meantime, notwithstanding the finding of this reality, incidentally entirely consensual, the Government has been resisting, without plausible reasons, for the introduction of changes in the normative of the VAT Code that have as the central objective to allow new procedures, more agile and compatible with the current needs and impositions of the economy. With the almost widespread computerization of the Tax Administration system it is not acceptable that they persist without significant variation of the Value Added Tax refund deadlines. It is vulgar, notwithstanding the government's belitches and commitments, that taxable persons of VAT only receive the repayments of the value added tax to which they are entitled many months, (four, five ...), after the date of the submission of the application for return. This is not admissible, much less is understood that, in full twenty-first century, the VAT Code itself, in its Article 22, determines a time limit of up to three months to make such a refund after the filing of the return request by the taxable person. Nothing justifies the existing situation, nothing particularly justifies that the state hides behind inwardly norms of the VAT Code so as not to accelerate processes and procedures that are nowadays evidently done informatically and that, by this very, are absolutely concretizable in much more reduced time, offering identical or superior margin of safety to such procedures. It is added that these deadlines and delays, (the first allowed by even legal standards, the seconds induced by the prevailing standards and also resulting from inefficiencies of the administration), in the return of the Value Added Tax entailed untold damage to taxable persons, in particular to micro and small enterprises, by drastically decreasing financial availabilities and causing, consequently, serious cash problems of often irreversible effects. This situation, already of itself unacceptable and incomprehensible under normal conditions, is currently a special dramatism in the face of the difficulties caused by the economic crisis with which the Country confronts itself, and which provokes increased problems of treasury to the generality of micro and small enterprises.


A further recurring problem has to do with the consequences of the delays of many months in the state's payments to its suppliers or service providers. These delays, which commonly exceed the six months and which are often only settled at the end of approximately one year, do not, however, release the providers of goods or services providers to the State of their tax obligations in the seat of the Value Added Tax, in what concerne at the time of the delivery of VAT due to the realization of those services. The VAT Code imposes on them, on the contrary, the delivery of VAT in deadlines which, in the face of the reality described above, create truly incomprehensible and unacceptable situations. It is that the providers of services or suppliers of goods to the public administration are faced with the legal obligation to deliver VAT quarterly, including the values of the tax owed to them by the State before the companies, by causes of the delays checked in payments, have received such VAT from the administration itself. This situation, in a period of increasing difficulty of companies, notably financial difficulties, is worsening the situation of many thousands of micro and small businesses providing service or providing goods to the public administration, and may lead even to their bankruptcy and the rise in unemployment. The measures that the Government has announced to shorten the payment terms of invoices to companies supplying goods or services to the public administration have not solved the problem. And even if they can mitigate it, that may not be enough and companies continue to have to pay the state VAT for this due, even before they receive it. It is therefore important to create a standard that allows companies to whom the public administration does not pay in a timely manner the invoices of supply of goods and services, to be able to deliver to the State the Value Added Tax due only after have been received through payment, in whole or in part, from the invoices in arrears and by the value actually received, in cases where this receipt has not been full. In this way it introduces into the legislation a minimum of reasonableness, as it is not understood that taxable persons continue to be required to observe the normal time limits stipulated in the VAT Code for the effective delivery of a tax that, after all, not was still received because it was the administration itself who failed to pay the supplies and the services that generated such a tax. The Parliamentary Group of the CFP understands, in summary, that with or without the existence of the current crisis, the changes it proposes to the Value Added Tax Code constitute indefatigable imperatives. Be it with respect to the substantial shortening of the VAT refund deadlines to the generality of the companies, which nothing justifies, whether with regard to the generalization of a fairer and more rational regime for the effective delivery of the tax resulting from the economic relations, liable for the settlement of the tax, established between the companies and the public administration.


Therefore, the deputies of the Parliamentary Group of the Portuguese Communist Party, under the regimental and constitutional provisions, present the following Draft Law:

Article 1. Amendment to the Value Added Tax Code (VAT)

Articles 2, 22 and 27 of the Value Added Tax Code, approved by the Decree-Law No. 394-B/84 of December 26, shall be replaced by the following:

" Article 2 [...]

1. [...]. 2. [...]. 3. [...]. 4. [...]. 5. (new). The State and other legal persons governed by public law are also taxable persons of the tax, when they are acquirers in operations mentioned in paragraph 1 (a) of Article 1.


Article 22 [...]

1. [...]. 2. [...]. 3. [...]. 4. [...]. 5. [...]. 6. [...]. 7. [...]. 8. The tax refunds, when due, must be made by the Directorate General of Taxes until the end of the 1. month following that of the filing of the application, fining which taxable persons are entitled to indemnifying interest, pursuant to the article 43. of the General Tax Act. 9. [...]. 10. [...]. 11. [...]. 12. [...]. 13. [...].



Article 27 [...]

1. [...]. 2. (new)-In the event that the acquirer is the State and other legal persons under public law, without prejudice to the provisions of Article 41, the tax is required at the time of the full or partial receipt of the price for the amount received. 3. [previous n. 2]. 4. [previous n. 3]. 5. [previous n. 4]. 6. [previous n. 5]. 7. [previous n. 6].

[...] "

Article 2 Transitional Disposition

The General Directorate of Taxes carries out all the necessary amendments to ensure the observation of the repayment term set out in Article 22 (8) no later than 180 days after the entry into force of this Law.

Article 3 Entry into force

This Law shall come into force on January 1, 2010.

Assembly of the Republic, November 23, 2009

The Deputies,