29,000 company bosses quizzed over tax debts

Around 29,000 company bosses were called by the Portuguese tax authorities last year to give an account of when and how they were going to pay off hundreds of millions in due taxes.

In many cases the managers of these companies were told they would have to pay their and their company’s debts with their own property in what are referred to as tax reversion cases when companies are in a negative financial situation, do not have funds to meet the debts or sufficient goods which can be seized.
However, on 2021, these reversions fell 33% because of measures implemented to offset the effects of the Covid-19 pandemic.
The data was contained in a report on Combatting Fraud and Tax and Customs Evasion 2022 which details the activities and results of the tax authorities (AT – Autoridade Tributária) on the matter and which was handed to parliament this week.
According to the AT, since 2017 non-payment of taxes fell from 69,856 cases in 2017 to 29,620 last year, registering significant increases in this period from 47,664 in 2018 to 62, 516 in 2019 and also between 2020 and 2021 with these reversions increased from 43,853 to 49,028.
The report handed to parliament states that there were 29,620 processes from companies in a negative financial situation or the non-existence of goods. According to the document the number of reversions against company owners fell 58% on 2017. The record in terms of reversions was reached during the height of Portugal’s Great Recession in 2014 with 440,509.
According to the document, AT states that the number of VAT payments that had not been made for 2022 fell 26% on 2021. In 2022 the number of VAT payments was 84,176 with a total of unpaid VAT of €226 million compared to 113,088 cases in 2021 totalling €286 million in unpaid VAT.
The report concludes that the overall downward trend seen in recent years before 2021 had to do with greater efficiency and more effective tax collection in combatting this type of non-compliance, not only through coercive means, but also making directors and senior management responsible in terms of patrimony, including in criminal terms, for company defaults.