Current account between Taxpayers and the State


The recently published Law 3/2022 of 4th January establishes the legal framework for the extinction of tax payments by offsetting against tax credits at the taxpayer’s initiative. This mechanism includes withholdings at source, autonomous taxation and respective tax refunds, relating to various taxes, such as: IRS (Personal Income Tax), IRC (Corporate Income Tax), VAT, Special Taxes on Consume, IMI (Property tax), IMT (Tax on Onerous Transfers of Property), IS (Stamp Duty), IUC (Circulation Tax) and Vehicle Tax. Hence, the legal framework provides for the possibility of taxpayers to request before the Tax Authorities (AT) the extinction of tax debts by offsetting against tax credits they have over the State, designated as a current account regime between taxpayers and the State.

To this purpose, the taxpayer may request, by electronic data transmission, through the “Portal das Finanças”, to the head of the AT, the payment of its tax obligations by offsetting, indicating the credits and debts subject to offsetting. No late payment interest will be due from the offsetting request until the AT’s decision.

The AT carries out the offsetting of tax debts, extinguishing the obligation when the amount of the credit is sufficient to satisfy the entire obligation or, when less, admitting it as partial payment.

In terms of deadlines, it should be noted that the AT has 10 days to issue a decision regarding the requested offsetting. After this period has elapsed without any manifestation on the part of the Tax Authority, the request for offsetting will be considered tacitly granted.

This legal framework will enter into force on 1st of July 2022.

The content of this information does not constitute any specific legal advice; the latter can only be given when faced with a specific case. Please contact us for any further clarification or information deemed necessary in what concerns the application of the law.