Do you believe that the Portuguese Tax and Customs Authority (AT) has calculated a tax incorrectly or that a tax assessment adversely affects your rights?
In these situations, you may be able to file a Gracious Complaint (reclamação graciosa) with the Portuguese Tax and Customs Authority.
A Gracious Complaint is an administrative procedure that allows taxpayers to request the total or partial annulment of a tax act, without having to immediately take the matter to court. It is provided for under the Portuguese Code of Tax Procedure and Proceedings (CPPT) and is one of the main administrative mechanisms available to taxpayers to defend their rights.
In this article, we explain what a Gracious Complaint is, who can file one, what the deadlines are and how the procedure works.
What is a Gracious Complaint?
A Gracious Complaint allows a taxpayer to challenge a tax act when they believe that it should be annulled, either fully or partially.
For example, this may concern an assessment of Personal Income Tax (IRS), Corporate Income Tax (IRC), VAT or another tax that the taxpayer considers to be incorrect or unlawful.
It is important to clarify that a Gracious Complaint is not limited to correcting calculation errors. Under Portuguese law, it may be based on the same grounds available for judicial proceedings challenging a tax act.
It is an administrative and cost-free procedure handled by the Tax and Customs Authority.
Who can file a Gracious Complaint?
A Gracious Complaint may be filed by the taxpayer and, where legally permitted, by their representative.
It is particularly relevant when a taxpayer believes that a tax act, such as a tax assessment, is incorrect or does not comply with the applicable tax rules.
Before proceeding, it is important to carefully assess the situation and gather the documents supporting the grounds for the complaint.
What are the deadlines for filing a Gracious Complaint?
This is one of the most important issues to consider.
As a general rule, a Gracious Complaint must be filed within 120 days, calculated from the events referred to in Article 102 of the CPPT. The starting point therefore depends on the specific circumstances and not simply on the date on which the taxpayer became aware of a possible error.
There are also specific situations, including cases where a document, court judgment or other fact subsequently becomes available and could not previously have been invoked. In such circumstances, the law provides specific rules for calculating the deadline.
For this reason, if you believe there is an error in a tax assessment or another tax act, it is advisable to seek professional assistance as soon as possible in order to confirm the deadline applicable to your case.
How can you file a Gracious Complaint?
A Gracious Complaint may be submitted in writing to the Tax and Customs Authority and may also be filed electronically under the conditions established by law.
The AT currently provides a specific area on the Portal das Finanças for filing Gracious Complaints (reclamações graciosas). Access is available through the taxpayer rights and defence section.
In general, you should:
- Access the Portal das Finanças and log in;
- Go to the section relating to taxpayer rights or legal remedies;
- Select the option to file a reclamação graciosa;
- Identify the tax act you wish to challenge;
- Explain the grounds for your complaint;
- Attach any relevant supporting documents;
- Submit the application and keep the confirmation receipt.
The Portal das Finanças menu structure may change over time. The important point is to look for the functionality currently provided for “Apresentar reclamação graciosa”.
Do you need to provide evidence?
The complaint should be properly substantiated and, where necessary, accompanied by documents supporting the facts relied upon.
The CPPT establishes specific rules regarding evidence in reclamação graciosa proceedings, giving particular importance to documentary evidence and official information available to the authorities, without excluding other enquiries that may be considered necessary.
It is therefore important to gather all relevant documentation before filing the complaint, such as tax returns, tax assessments, invoices, payment receipts or other documents relating to the matter.
Does a reclamação graciosa suspend the payment of tax?
Not automatically.
This is particularly important where a tax debt or tax enforcement proceeding is involved.
Under the CPPT, a Gracious Complaint has suspensive effect when adequate security is provided in accordance with the law.
Likewise, where tax enforcement proceedings are already underway, suspension of the enforcement process depends on meeting the legally established requirements, including the provision of security or other circumstances provided for by law.
Therefore, filing a Gracious Complaint does not, by itself, mean that the taxpayer can simply stop complying with payment obligations.
If a debt is already being collected or tax enforcement proceedings are underway, it is particularly important to obtain professional advice before allowing a payment deadline to expire.
What happens after the complaint is filed?
Once the complaint has been filed, the Tax and Customs Authority will assess the arguments and supporting information submitted.
The procedure may result in the taxpayer’s request being accepted or rejected, either fully or partially.
If the AT concludes that the complaint is justified, the tax act may be annulled, either fully or partially, in accordance with the decision.
If the complaint is rejected, the taxpayer may, in certain circumstances, still have other legal means available to challenge the decision.
What if the Gracious Complaint is rejected?
The rejection of a Gracious Complaint does not necessarily mean that the taxpayer has exhausted all available remedies.
According to the information currently provided by the AT, a hierarchical appeal (recurso hierárquico) may be filed against the total or partial rejection of a Gracious Complaint, in accordance with the CPPT. The general deadline for a hierarchical appeal is 30 days from notification of the relevant decision.
There may also be the possibility of using judicial remedies, including a judicial challenge (impugnação judicial), depending on the act and the specific circumstances of the case. The AT distinguishes between administrative and judicial mechanisms for defending taxpayers’ rights.
For this reason, following a rejection, it is essential to analyse the decision and the applicable deadlines before deciding which remedy to pursue.
Reclamação graciosa or judicial challenge?
A Gracious Complaint and a judicial challenge are different procedures.
A Gracious Complaint is an administrative procedure submitted to the Tax and Customs Authority.
A judicial challenge (impugnação judicial) is brought before the tax courts and is a judicial mechanism for challenging a tax act.
The most appropriate procedure depends on the specific circumstances, the act being challenged, the applicable deadlines and the taxpayer’s objectives.
The AT currently provides specific information on the different defense mechanisms available, including Gracious Complaint, hierarchical appeal and judicial challenge.
Does a Gracious Complaint involve any costs?
A Gracious Complaint is an administrative procedure that is exempt from court fees, in accordance with the fundamental rules established by the CPPT.
However, if a taxpayer engages a professional to assess the situation, prepare the complaint or manage the proceedings, professional fees may apply.
Why is it important to seek professional advice?
Portuguese tax legislation establishes different deadlines and mechanisms for challenging decisions and acts of the Tax and Customs Authority.
Failing to identify the correct deadline or choosing an inappropriate remedy may affect your ability to defend your rights.
Before filing a Gracious Complaint, it is therefore advisable to assess:
- which tax act you wish to challenge;
- the grounds for the complaint;
- the applicable deadline;
- which documents support your position;
- whether another remedy may be more appropriate;
- whether tax enforcement proceedings are already underway.
A certified accountant can help assess your situation and identify the most appropriate procedure, without prejudice to seeking legal advice where the complexity of the case makes this necessary.
In summary
A Gracious Complaint is an important administrative mechanism for protecting taxpayers’ rights, allowing them to request the total or partial annulment of a tax act by the Tax and Customs Authority.
The general deadline is 120 days, although the date from which this period is calculated depends on the circumstances established by law.
In addition, filing a complaint does not automatically suspend collection. Where suspensive effect is required, the legal requirements must be assessed, including the provision of adequate security where applicable.
Do you have questions about an IRS, IRC, VAT or other tax assessment? Contact our accounting team. We can help you assess the situation, check the applicable deadlines and determine which remedy may be most appropriate for your circumstances.