Calama, V. Meneses Falcão & Associados
Tax Authority - Payment of interest by the Tax Authority
The Tax Authority (AT) must pay the taxpayer default interest at a rate equivalent to twice the default interest rate defined in the general law for debts to the State and other public entities in all situations of non-compliance with the deadline for voluntary execution of a final and unappealable decision, and not only in cases of administrative appeal or judicial challenge.
Putting an end to the existing divergence in jurisprudence, the Supreme Administrative Court has now clarified, through its Judgment No. 1/2025 of February 10, that the default interest provided for in paragraph 5 of Article 43 of the General Tax Law (LGT) is due in all situations where the deadline for voluntary execution of a final and unappealable decision is exceeded, and not only in situations where the requirements for the payment of compensatory interest are also met, under paragraph 1 of the same Article 43 of the LGT. Thus, the affected taxpayer will be entitled to "double" interest for the period between the date of the deadline for voluntary execution of a final and unappealable judicial decision and the date of issuance of the credit note, even if that decision does not result from any administrative appeal or judicial challenge.