REPORT ON THE FIGHTING FRAUD AND EVASION TAX AND CUSTOMS 2022

PREFACE

The report on combating fraud and tax evasion is an instrument of the greatest relevance in the monitoring the policies and actions of the tax and customs administration, within a framework in which Fraud, evasion and tax avoidance behaviors constitute a threat to social justice in our modern societies.

After around two years conditioned by the COVID-19 pandemic, the year 2022 was marked by invasion of Ukraine, giving rise to a complex socio-economic context: growing inflation in fundamental sectors, such as energy or agri-food; accelerated increase in interest rates; difficulties in supply chains and a geopolitical framework of greater uncertainty worldwide.

Whether in the previous context of the Covid-19 pandemic or in this context of inflationary pressure, they deserve Special emphasis is placed on support measures for families and companies implemented through the Authority Tax and Customs (AT) or with the latter’s contribution, both at the fiscal level and at the level of support of another nature.

Seeking to induce voluntary compliance on the part of taxpayers, AT has been dedicating a special focus on supporting taxpayers, issuing alerts to them, as well as introducing a new phase in the inspection procedure: the regularization meeting. In this context, the inspection action prioritizes the fight against highly complex fraud and the informal economy, associated with the identification and detection of fraudulent conduct and abusive tax planning schemes.

The year 2022, in terms of tax inspection, is marked by an increase in the level of regularizations voluntary activities and the growing focus on more complex actions aimed at planning tax (including the promotion of instruments such as the exchange of international information and the derogation banking secrecy).

In terms of combating the informal economy, in 2022, there was a 14.59% growth in the number of invoices with the taxpayer number (NIF), as well as an increase of 15.62% in the total annual value of invoices with NIF communicated to AT, amounting to a total of 71,619,813,640 EUR. That year, The two-dimensional barcode (QR code) is now mandatory on all invoices issued through a certified invoicing program. As a result of this change, there was a significant growth in the communication of invoices by acquirers using code reading QR, through the e-Fatura App, instead of registering on the Finance Portal.

Considering that AT also has an important mission of controlling the external border, not only in the tax aspect, but also in the protection and security of society when importing and export of goods, it is important to highlight that AT carried out, in 2022, the detection and seizure of more than four tons of illicit drugs, in more than 100 seizures.

Finally, I would like to thank the commitment of AT workers and managers, both in the services central offices, whether in regional and local services, as well as other entities that collaborate in the combating fraud and tax and customs evasion. Taxes are one of the pillars of the Social State of Law, ensuring the financing of services provided to society by the State and other entities public and having an important redistributive function at a social level. Therefore, combating fraud and Tax and customs evasion is essential for a more fair, equitable and cohesive society.

Lisbon, June 30, 2023

The Secretary of State for Fiscal Affairs,

Nuno Santos Felix

INTRODUCTION

AT is a direct administration service of the State, endowed with administrative autonomy, and its purpose is to mission is the administration of taxes, customs duties and other duties assigned to it, as well as exercising control over the external border of the European Union and the customs territory nationally, for tax, economic and societal protection purposes, in accordance with defined policies by the Government and European Union Law.

To this end, AT has a set of attributions (Decree Law no. 118/2011, of December 15) among which stand out:

• Ensure the settlement and collection of taxes and other taxes or revenues of the State that it is up to administration;
• Inform taxpayers and economic operators about their respective tax obligations and customs and support them in voluntary compliance with them;
• Promote the correct application of legislation and administrative decisions and propose measures of a normative, technical and organizational nature that proves to be appropriate;
• Carry out and promote technical and scientific research in the tax and customs field, taking into account with a view to improving legal and administrative measures and permanent qualification human resources;
• Carry out tax and customs inspection actions, preventing, investigating and combating tax and customs fraud and evasion and illicit trafficking;
• Collaborate with the competent authorities in defining and implementing security policies preventing and combating money laundering and terrorist financing;
• Carry out tax and customs justice actions, ensuring the representation of the Treasury
• Ensure technical negotiation and execute international agreements and conventions on matters Public with judicial bodies; tax and customs, cooperate with European and international organizations and other tax and customs administrations;
• Ensure the licensing of foreign trade of products typified in special legislation and manage restrictive regimes for the respective foreign trade.

Pursuant to the provisions of article 64-B of the LGT, it is up to the Government to present to the Assembly of Republic, by the end of June each year, a detailed report on the evolution of combat fraud and tax evasion in all areas of taxation, explaining the results achieved, namely regarding the value of additional settlements carried out, as well as the value of collections recovered in the various taxes.

This document highlights the contributions of AT to the preparation of the aforementioned report, describing the activity carried out by AT in combating tax and customs fraud and evasion during the year 2022.

2.1. Strategic objectives

During 2022, AT continued to develop its activity taking into account the strategy defined in the 2020-2022 Strategic Plan, which is outlined with the Plan’s Major Options defined by the XXII Constitutional Government for the period 2020-2023 at the level of fiscal policy, which fits, in turn, into the global strategy of economic and social development and consolidation of public accounts.

Figure 1: AT strategic objectives

During the year 2022, taking into account the Addendum made following the pandemic COVID-19, for 2021-2022 to the Strategic Plan to Combat Tax and Customs Fraud and Evasion (PECFEFA) 2018-2020, AT continued with the operationalization cycle of the measures provided for in PECFEFA, maintaining the same orientation in carrying out its activity.

This Addendum, oriented according to the three strategic vectors of priority intervention that are below identify, was based on a set of measures in five distinct areas:

• Legislative;
• Criminal;
• Operational;
• Institutional relationships with other national and international public entities; It is
• The relationship with the taxpayer..

Figure 2: PECFEFA strategic vectors

2.2. Challenges of the Post-Pandemic period

After around two years conditioned by the COVID-19 pandemic, with significant effects on economies worldwide, the year 2022 began with the expectation of recovery and resumption of pre-pandemic indicators. However, in February 2022, war once again became a reality in Europe, giving rise to an impactful macroeconomic scenario: inflation in fundamental sectors, such as energy and agri-food, accelerated increase in interest rates by central banks, difficulties in supply chains and raw material production and increased uncertainty geopolitics. These factors contributed to the extension of the economic slowdown scenario global, thus creating new challenges and very significant limitations to the performance of not only the sector business, as well as families. AT, as well as tax administrations across the world in general, continued to play in this context, a very important role in supporting citizens, through their participation in implementation of measures to support the economy, but also in simplifying compliance with declarative and payment obligations.

In this context, in 2022, AT continued to invest in different communication channels, seeking to provide a quality service to taxpayers, in order to support and simplify the compliance with its tax obligations. AT reinforced its presence on social media, having increased its number of followers on the multiple digital platforms where it is present.

The end of restrictions imposed by the COVID-19 pandemic contributed to a considerable increase number of services (with and without appointment) compared to the previous year, as well as the service capacity, prioritizing service by appointment, so that a better support service can be provided to the taxpayer.

2.3. The Compliance Model

The methodology used by AT is based on the study and understanding of taxpayer behavior, what motivates citizens to comply, or not, with their tax obligations. This model allows taking into account the level of compliance with tax regulations, seeking in a structured way to understand AT adapt its responses and interventions, with the aim of influencing the behavior of taxpayers in a positive way.

The approach recommended at OECD level has as its starting point the recognition that most taxpayers seek to fulfill their tax obligations correctly and on time.

However, there are a smaller number of taxpayers who want to comply, but are not always able to. There is an even smaller number who deliberately do not want to fulfill their obligations. Thus, the taxpayer behavior is, to a large extent, influenced by a series of factors, including by AT’s own actions.

In this sense, AT seeks to adapt its response to the various categories of behavior of voluntary, without prejudice to reserving the use of its powers in inspection and criminal investigation taxpayers and seeks to influence this behavior, encouraging and assisting compliance whenever necessary.

Figure 3 – Fulfillment Model Pyramid

Source: Spectrum of taxpayer attitudes to compliance in MANAGING AND IMPROVING TAX COMPLIANCE SEPT 2004 – OECD FTA Compliance Sub-group

This pyramid expresses the assumptions of the compliance model, namely the stratification of taxpayers’ attitudes and the corresponding strategy to adopt, in order to mitigate this attitude in relation to the desired behavior, and the response must be graduated and depending on the disposition of the taxpayer whether or not to comply with their obligations.

The majority of taxpayers fall into the lower sections of the pyramid, namely they comply; or try to comply, but sometimes fail, sharing a common denominator – they are willing to comply. A progressively smaller number of taxpayers fall into both upper sections where taxpayers’ behavior is characterized by being less compliant, demanding stronger positions from AT. In this way, the function of AT involves pressuring and discouraging, in order to encourage taxpayers to adopt the behavior correct, voluntarily fulfilling their obligations.

As in previous years, and as is already repeated practice, in 2022 AT sought simplify and support citizens who wish to voluntarily comply with their obligations taxes, however, without ever neglecting its more robust and sanctioning action on defaulting taxpayers, making all necessary efforts to detect possible situations of tax and customs fraud and evasion, and to discourage the practice of these types of acts, acting in a consistent manner on the offenders, through legal means, and aiming to recover the losses generated.

Operationally, it continued to prioritize communication with taxpayers/economic operators, using new information and communication technologies as a means of provision of information, ensuring that taxpayers understand their rights and responsibilities, providing them with accurate and timely information, clarifying the law or expressing their opinion regarding it, through the provision and updating of information on the Finance Portal, YouTube, Twitter, Facebook, Instagram, information leaflets, tax calendar, FAQ (Frequently Asked Questions), administrative guidelines, information binding documents, as well as a vast digital collection of models and forms, respective data and corresponding filling instructions.

Still within this scope, AT has:

• A face-to-face service by appointment (APM);
• A telephone call center (CAT); It is
• e-Counter service on the Finance Portal, through which it can provide taxpayers with faster clarification of their doubts.

As part of inducing voluntary compliance, AT persisted in implementing alerts, as well as in the automatic issuance of divergences identified from regular crossings, based on information contained in the databases held by AT, thus enhancing the voluntary regularization of detected inconsistencies and the perception of the risk of the topics addressed.

Notices continued to be sent to taxpayers informing them of the proximity of deadlines for complying with your tax and customs obligations.

Non-compliance risk management should include a broader set of interventions to correct the identified risks, and the use of inspection should only be for the most serious situations. financial, economic and fiscal complexity, in which the materiality of the values involved justifies the investment of time and resources, as is the case with tax and customs fraud and evasion. In 2022, the inspection action continued to be directed towards combating high-level fraud. complexity and the informal economy, with the identification and detection of conduct fraud, and the identification of abusive tax planning schemes.

2.4. The Economy and digital transformation in the fight against fraud

The rapid development of the digital economy has introduced a new paradigm in the economic process and commercial, which is characterized by the intangible nature and the dematerialization of new business models, as well as the way these businesses are carried out in this new digital era.

Quickly, new concepts such as “cryptoassets”, “mining”, “blockchains” became part of the everyday life and brought with them new challenges, not only at a fiscal level, but also legislatively, financial and criminal, which traditional control mechanisms are unable to respond to, due to their high degree of complexity and lack of legal predictability.

The dematerialization associated with the use of these new systems and technologies makes identification difficult, location and control of the tax fact, posing a challenge for tax authorities. A articulation and cooperation between the various entities is crucial to ensure that the digital economy is taxed in a fair and equitable manner, allowing the continued development of the digital market and companies that operate in it.

In this context, the BEPS project (Base Erosion and Profit Shifting) and the development of effective and efficient international information exchange mechanisms, which allow AFs to exchange essential information about transactions, income and subjects, allowing AFs to AF require compliance with tax obligations.

The international community, in particular the European Union, the G20, the Organization for Cooperation and Economic Development (OECD) and the United Nations, have made an effort not only to debate these issues, but also to try to legislate on these matters, examples of which are theAdministrative Cooperation Directives (DAC) 7 and 8, OECD Crypto-Asset Reporting Framework1 (CARF), Operators with respect to Sellers in the Sharing and Gig Economy.

MiCA (European Regulation for the Cryptoasset Market) and Model Rules for Reporting by Platform Despite the use of digitalization and new forms of digital economy can be used to hide capital arising from the practice of illicit activities, digitalization can be viewed in a positive way, and all its power to support compliance must be observed and enhanced voluntary on the part of citizens. For example, pre completing tax returns, communications through the VAT Information Exchange System (VIES) system, increase transparency between the subjects of the legal-tax relationship, allow the reallocation of human resources to operations of high financial complexity, as well as easier and faster identification of situations of fraud and tax evasion.

To this end, it is essential to develop, in the long term, a data management strategy, in which it is other stakeholders and with the taxpayers themselves. A descriptive, predictive and prescriptive analysis of the analyzed data was carried out, in conjunction with the increasingly, digital transformation and the digital economy will influence and determine not only the way and the way in which economic transactions are carried out, as well as the way in which income and profits are generated and obtained. The AT must be aware of this fact, and for this purpose it must monitor the evolution of the various sectors that make up the market and the digital economy, invest in training of its human resources and continue to develop the process of autonomy and dematerialization of its services..

2.5. Human resources and training

Throughout 2022, there was a reduction in the number of AT human resources by 294 people, rejuvenating them and providing them with different qualifications and new skills, having in 2022 been going from 10,782 to 10,488. There is a need to reinforce its staff, tests for access to the special tax and customs inspection and audit career were carried out, as well as of IT specialists.

1 Available at: https://www.oecd.org/tax/exchange-of-tax-information/crypto-asset-reporting-framework-and-amendments-tothecommon-reporting-standard.htm

Graph 1: Number of AT workers on December 31st of each year by sex

Regarding human resources management, the COVID-19 pandemic essentially marked the first four months of 2022, both in terms of resources directly affected by the disease and in terms of level of maintenance of changes introduced in the organization of work, whether in terms of guarantee of conditions to continue working remotely, whether in terms of implementation of health safety measures for facilities and workers.

Although in the second half of 2022 the impact of the COVID-19 pandemic was much greater reduced, the use of the teleworking model was maintained simultaneously with the work model in person.

At no time did AT’s activity cease to be ensured, highlighting its activities in the area of customs control and maintenance of face-to-face activity to support taxpayers in local services of finance.

TRAINING

As the training of AT workers constitutes one of the most important instruments for permanent updating of knowledge and reinforcement of skills, during 2022 AT invested in training, with 417 training actions, in which 25,210 trainees participated, corresponding in total to a training volume of 113,513 hours.

The number of workers who attended at least one training session was 8,511, which corresponded to a training level of 81%.

Contributed to the results of the training indicators, in a greater percentage, were the actions developed in the subareas:

• Tax Management – Income;
• Customs Management – Regulation;
• Tax and Customs Justice – Other Justice themes;
• Tax and Customs Inspection – Tax;
• Collection – Registration of taxpayers;
• Other transversal courses.

Given the direct and very specific impact on the qualification of technicians in anti-tax fraud units and customs (DSIFAE, DSAFA and the IT Center), the main beneficiaries of the training promoted in the areas of combating cybercrime and fraud, collaboration was maintained with the CEPOL (European Union Agency for Law Enforcement Training). In 2022, 180 participated AT workers in several webinars made available by CEPOL that focus on the topic “Fraud”2 .

2 CEPOL webinars that AT participated in: Tobacco fraud – illegal manufacturing of cigarettes; Counterfeiting and pharmaceutical products I and II; Cyber Telecom fraud; Document fraud investigation: Spanish helpdesk; Combating illegal production of cigarettes in the EU: Missing trader intra community fraud; Investment fraud.

2.6. Relevant results in 2022

2.6.1. Tributary and customs authority

2.6.2. General Finance Inspection

Among the most relevant results of the 2 audits carried out by the IGF in the field of combating tax fraud and evasion, in 2022, the following stand out:

a) In the Audit of the tax incentive system in research and business development (SIFIDE), the main conclusions were as follows:

ÿ Fiscal expenditure with SIFIDE registered a significant increase between 2017 and 2020 (from 137.2 million euros – M€ – to 396.4 M€), estimating a high impact of this expenditure during the legal deduction period, given the tax credit balance carried forward in 2020 (€448.6 M);

ÿ Situations of undue tax credit worth €3.2 million were identified, which were communicated to AT;

ÿ The result and impact indicators used in the audit, for the period 2018/2020, indicate for the effectiveness of the incentive on company results and job creation, but it is not yet there was consolidated data on projects during this period and the degree of implementation of the project was reduced. investment by companies dedicated to R&D;

ÿ Expenditure on R&D in the indirect aspect had a significant increase from 2017 to 2020: in the number of applications with contributions to funds (from 56 to 1,067), in the amount of expenses for contributions (from 11 M€ to 406 M€) and in the representation of the amount invested in Funds Risk Capital in total extramural financing, from 16% to 87%, having identified several critical aspects in the functioning of this aspect of the incentive;

ÿ Control of the conditions for granting/using the benefit was not adequately exercised, as the National Innovation Agency, SA (ANI) only carried out the qualitative validation of expenses, while AT considered that the validation of the respective value must be carried out by ANI, limiting As a rule, the values deducted are controlled in relation to those approved by ANI and the values to be reported to following exercises;

ÿ The control carried out by ANI presented the following shortcomings: lack of a risk analysis; lack of procedures to control the execution of R&D projects; no carrying out technological audits since 2015; outdated approval manual applications; absence of manual on recognizing suitability to practice activities of R&D; insufficient justification for the eligibility of expenses and incorrect calculation of operating expenses.

In view of these conclusions, which, in summary, highlight insufficiencies in ANI’s internal control and in the tax control developed by AT, as well as in the coordination between AT and ANI in controlling the benefit, recommendations were made to those entities in the sense of:

ÿ Implement a risk analysis strategy and develop execution control methodologies of R&D projects and carry out technological audits;

ÿ Address insufficiencies regarding the approval of applications, the recognition of suitability for the practice of R&D activities, justification of the eligibility of expenses and credit calculation Supervisor;

ÿ Ensure the rapid processing of company information, to allow the impact to be assessed of this tax incentive on the respective results, especially regarding the intervention of investment, also promoting a strategy aimed at controlling these;

ÿ Implement the SIFIDE current account and benefit control methodologies, as well as carry out inspection actions to regularize situations of undue tax credit identified in the audit;

ÿ Develop coordination between ANI and AT, in the control and inspection procedures of the compliance with the conditions for granting/using the benefit.

Proposals were also made to the Government, aimed at obviating or mitigating some critical aspects of the scheme, such as the exclusion of the eligibility of several expenses and the reduction of the period of investment of funds, among others. The proposals presented to the Government were considered in the within the scope of a proposed law, which has since been approved by the Assembly of the Republic.

b) In the Performance Audit – Reverse Charge Regime for VAT due on imports, the main
conclusions were as follows:

ÿ Control of the regularity of values between the amounts settled by the customs and those declared in the VAT periodic declarations (DP), having been identified, in the year 2019, 1139 taxpayers with discrepancies worth more than 1,000 euros, totaling €69.5 million potentially missing tax;

ÿ AT has not adequately controlled the obligation to submit the declaration of replacement by changes to the taxable value of VAT in the import customs declaration. At 18 taxpayers with regularizations exceeding 50,000 euros, 10 (55.6%) did not present the respective replacement VAT DP;

ÿ The computer system still did not allow the resolution of identified divergences and was in course on adapting the Divergence System for access by customs;

In view of these conclusions, which, in summary, highlight several shortcomings in AT’s performance in control of the scope of the Reverse Charge Regime for VAT due on imports, recommendations to that entity in the sense of:

ÿ Adopt a strategy to control the regularity of VAT amounts due on imports and declared by taxpayers in the periodic declaration, ensuring the completion of adaptations the system of divergences related to import VAT;

ÿ Promote the analysis and regularization of missing tax situations within the scope of divergences identified for the year 2019;

ÿ Promote the effective entry into production of customs systems (e.g. Customs Settlement) with a view to increasing the quality and integrity of the information recorded in the interface of VAT settlements payable in DP.

However, the aforementioned divergence detection procedure was implemented by AT, being applied in the analysis of tax periods corresponding to the year 2018 and following, having a high rate of voluntary regularizations was recorded.

3.  ADDENDUM 2021-2022 TO THE STRATEGIC PLAN FIGHTING FRAUD AND TAX AND CUSTOMS EVASION 2018-2020 The 2021 2022

The 2021–2022 Addendum to PECFEFA 2018-2020 was marked by the COVID-19 pandemic, a which led to adjustments to the activity carried out by AT, namely, among other activities, respond to support needs for public support measures aimed at families and companies, in order to mitigate the economic and social impact inflicted by the pandemic.

A set of measures not yet implemented are carried over to PECFEFA 2023-2026, given its relevance and evolution of the socioeconomic and legal situation. PECFEFA 2023-2026 pays special attention to strengthening the fight against both the parallel economy and tax avoidance, as well as promoting citizenship and tax literacy and deepening the relationship between AT and citizens.

The following table presents the measures recommended in the 2021–2022 Addendum, duly tax evasion, as well as its degree of execution.

Table 1 – Legislative measures

Table 2 – Operational scope measures

Table 3 – Criminal measures

Table 4 – Measures within the scope of the relationship with the taxpayer

Table 5 – Measures within the scope of institutional relationships with other national and international public entities

4. ACTIVITIES TO COMBAT FRAUD AND TAX EVASION AND CUSTOMS IN THE INTERVENTION AREAS STRATEGIC IN 2022

4.1. Performance in the Scope of the Relationship with the Taxpayer

4.1.1. Taxpayer interaction and support

INFORMATION AND TAXPAYER SUPPORT MEASURES ADOPTED IN 2022

Compliance measures are based on two fundamental factors:

• The anticipation of initiative action by the tax administration, for moments that tend to contemporaneous with the practice of tax facts;
• The provision of information and knowledge necessary to carry out your treatment, so that action is a factor of understanding and added value for the promotion of voluntary compliance.

These measures always imply a strong commitment to assistance and support close to taxpayers, through either the telephone service channel or digital service – e-counter and assistant virtual – in fulfilling your tax obligations.

SUPPORT FOR VOLUNTARY COMPLIANCE

In 2022, AT intensified the dissemination of tax and customs information on social media, namely through:

• the YouTube channel (68 publications), where the focus was on promoting services, throughvideos and tutorials, with a strong compliance support component.
• Twitter (495 publications) where news and highlights from the customs area predominate and tax, with links to the Finance Portal. In 2022, more than 153 thousand were registered visits to the AT profile and 1628 new followers.
• the Facebook page (443 publications), where an average of 400 thousand was reached per month users and the number of followers exceeded 63 thousand. Of the published content, the focus is once again given to information supporting compliance, security alerts, news on seizures and actions to combat fraud and tax evasion.
• on Instagram (467 contents), where we gained 16,719 followers and reached more than 83 thousand accounts. In this social network we intend to reach a segment of the population that is in nding SMS (more than 525 thousand)
• alerts on taxpayers’ personal pages (more than 11 million), a huge increase principle of active age, with the publication of topics related to the activity being crucial professional, compliance support, as well as tax citizenship; 3; significant compared to the previous year4
• sending around 31 million electronic messages to taxpayers, an increase of around 33.72% compared to the previous year5, as per the following graph:

Graph 2 – Annual evolution of informative emails sent to taxpayers

In 2022, around 184 thousand emails were sent to self-employed workers who registered the start of activity throughout the year and approximately 162 thousand alerts on personal pages. This one procedure aims to support these taxpayers, indicating where to consult information relating to the compliance with declaratory obligations, consultation of tax status, among other situations available on the AT Portal.

3 The decrease in SMS compared to the previous year was due to the sending of SMS related to the IVAucher program in October and November.
4 The observed increase (from 473 thousand to 11 million) was related to the campaign for the new ATGo APP, validation of pending invoices for information, advantages in making contacts reliable and receiving emails and SMS from the Tax Authority and Customs.
5 In 2022, the increase in the sending of compliance emails was due to the fact that AT changed the frequency of its newsletters, going from quarterly (Newsletter) to monthly (Newsletter); as well as the information campaign on Adherence to Electronic Notifications and Citations on the Finance Portal (NCEPF).

AT NEWSLETTER

In terms of support and communication, in 2022 the Newsletter was reformulated quarterly digital “AT em Contacto”. To be closer to the taxpayer, it now has a frequency monthly and to be sent as a PDF attachment, allowing it to be viewed directly in the email.

With its first issue published in August, the now called “Newsletter” maintained The target audience is the broad segment of all individual taxpayers. In 2022 they were published the first five issues that are available on the Finance Portal, on the Support page Contributor, in Useful Information. The Newsletter aims to be another communication tool for AT, which responds to the need for individual taxpayers to obtain relevant information that helps them voluntarily comply with the tax and customs obligations, as well as exercising their rights and guarantees.

E-COUNTER | AT’S ELECTRONIC CUSTOMER SERVICE

The e-balcão is a customer service open every day, 24 hours a day, operating according to a logic nationwide electronic one-stop shop.

The system allows the reduction of the number of questions asked by taxpayers through the various channels, as the integration of channels through CRM (Customer Relationship Management) allows visualization by the attendant of the various interactions with the taxpayer, avoiding multiple responses to the same issue, as well as allowing the reduction of human resources allocated to face-to-face service and the relocation of these workers to tasks with greater added value.

The e-balcão substantially eliminates the contextual costs that taxpayers bear in their interaction with AT. In 2021, 11,247 requests were transferred. In the year 2022, 2,744,509 new requests for information, of which 2,738,548 were responded to, corresponding to a national achievement rate of 99.40%.

Graph 3 – Number of information requests via e-balcon

IN-PERSON SERVICE BY APPOINTMENT | APM

With a view to improving the quality of services provided, AT implemented the “In-person Service by Appointment” (APM) which constitutes another channel that facilitates response made available to the taxpayer, through the following means:

• Finance Portal, electronically (Internet);
• Telephone booking, via the Telephone Service Center (CAT);
• In person, at local services (SF) and Customs.

APM operates on a platform, initially created only for CAT and SF and, since December 2016, extended directly to taxpayers through the Finance Portal where they can choose, within the availability, theme, location and opening hours.

The APM allows you to regulate service and communication with the AT, in a way that is convenient for the taxpayer, and AT also derives benefits from this type of service due to its predictability, anticipation and prior knowledge of the issue. It also allows the taxpayer to avoid having to go to work if you are contacted in advance by phone.

From a multichannel service perspective, the creation of an APP that allows users to taxpayer schedule a face-to-face appointment, contact the CAT or ask a question on e counter.

With the gradual return to normality after the pandemic, and regardless of the channels of alternative services that AT provides, there was a significant increase in demand for face-to-face service, which combines APM with spontaneous service.

Graph 2 – In-person service by appointment (evolution in the number of services)

From year to year, in-person service with prior appointment has increased, and in 2022 1,703,358 face-to-face services were provided, an increase of 366,718 services, approximately 27%, compared to 2021. However, taxpayer demand is below supply capacity, in hours, that AT makes available, so it is important to maintain the purpose of promoting this functionality, betting in providing a quality service.

Graph 3 – APM available and appointments

Source: APM Application

In the following graph, we can see the number of positions available to taxpayers, for aggregate subjects, in the years 2021 and 2022.

Graph 4 – APM – number of positions available by subject (aggregated)

Note: Given the change in the coding of options made in 2022, it is not possible to make exact comparisons with the document from the previous year.

As can be seen, the areas of Tax Executions and Litigation and Heritage are the ones that more positions are offered due to demand, followed by the opening of undifferentiated positions, noting if a deficit in relation to demand in the opening of taxpayer registration posts, usually very required for the attribution of NIF to citizens from third countries.

With the easing of COVID-19 measures, AT services also increased their capacity serve taxpayers, who go to the finance services spontaneously and without appointment, the increase in services compared to 2021 is visible in the following graph.

Graph 5 – Spontaneous Services

TELEPHONE CALL CENTER (CAT)

CAT remains a highly sought after service channel, not only because it avoids travel services, but also because it provides an immediate response to citizens, companies and economic operators.

To meet the demand of citizens, it was necessary to allocate to the CAT, in addition to the employees of the area of Communication, Promotion and Compliance Support Services, service workers deconcentrated areas of AT, namely with the collaboration and involvement of the Directorates and Services of Finance in the country, which allocated the necessary human resources depending on the alert levels expected, in order to respond to requests, while guaranteeing the quality of the taxpayer service.

We can see, in the next graph, that demand through this service channel decreased by 2021 to 2022, justified in part by the greater availability of face-to-face assistance in Services of Finance resulting from the easing of restrictions imposed by the COVID-19 pandemic:

Graph 6 – Telephone calls6

ONLINE HELP – VIRTUAL ASSISTANT

The Virtual Assistant (AV) – Catia – is AT’s electronic service channel available on the Portal das Finance, through online help and the “contacts” option, and allows taxpayers to receive assistance carried out in two ways: the first, available 24/7, results from the taxpayer’s interaction with the AV, with responses being fully automated using artificial intelligence; the second way service only occurs when there is no answer to the question posed by the taxpayer, or when this is not completely clarified, moving on to personalized service, carried out in real time by an AT professional, who answers questions asked via chat. O Electronic support via chat is available every working day, between 9:00 am and 19:00 hours.

The AV continues to have as its main objective to provide simple and concrete IRS answers to individual taxpayers without organized accounting. However, the content made available by AV were extended to other tax areas, namely Single Circulation Tax (IUC), obtaining the NIF, property taxes, access passwords to the Finance Portal, being

6 It should be noted that in the quantities presented in this graph, the calls “served” include calls answered by agents and those that are answered through the IVR (automations).

Also worth highlighting is the Fiscal Agenda. This is a project under “construction”, but whose focus is as a channel to support voluntary compliance is considered strategic in AT, from the perspective of integrated service across all channels.

Some figures relating to AT’s AV, with reference to the year 2022:

Access to the Virtual Assistant

Graph 7 – Number of accesses vs. Number of satisfied accesses (monthly values – Year 2022)

Number of automatic messages exchanged with the Virtual Assistant

• In 2022, 1,972,800 messages were exchanged with the Virtual Assistant, of which 1,747,864 (88.60%) were understood. The average number of messages exchanged in each access it was three.

Graph 8 – Number of messages exchanged vs. Number of messages understood (monthly values in 2022)

Services provided by AT professionals via CHAT

• In 2022, assistance from AT professionals, via chat, was requested by 51,392 taxpayers, of which 49,111 (95.56%) were assisted.

Graph 9 – Number of services requested from AT professionals via chat and % of services provided (monthly values in 2022)

Average number of services provided by AT professionals through CHAT

• In 2022, the average number of chats handled by AT professionals was 195.66/day.

Graph 10 – Average number of daily calls made by AT professionals via chat (monthly values in 2022)

ACTIVITY AT THE TAXPAYER’S SCOPE

AT has been developing a set of strategies focused on promoting compliance voluntary, creating for this purpose the necessary conditions so that taxpayers and operators economic interests in general, can comply with their tax and customs obligations in a more simple, thus reducing the context costs associated with fulfilling these obligations.

These strategies have been oriented towards greater simplicity and transparency in the relationship with taxpayers and economic agents in general and have resulted in an increase widespread levels of voluntary compliance.

Examples of these strategies are:

• pre-completion of declarative obligations such as Automatic IRS or Automatic VAT,
• the availability of an increasing number of online services on the Finance Portal,
• the availability of APPs,
• issuing alerts and divergences,
• the availability and updating of information on the Finance Portal (information leaflets, tax calendar, FAQ’s, administrative guidelines, binding information, as well as a vast digital collection of models and forms, their respective data structures and corresponding filling instructions),
• the various publications on AT’s social networks (Youtube, Twitter, Facebook and Instagram),
• the provision of a set of contact channels such as e-Balcão, the Customer Service Center

Telephone service or the possibility of in-person scheduling by appointment, which were enhanced with new features:

o APM – the possibility of scheduling on the Finance Portal and creating of new themes
o E counter – the implementation of the service in the customs area
o CAT – the implementation of teleworking and the involvement of a greater number of workers made available by the different AT Finance Departments, as well as the reformulation of the CAT in the customs area, involving not only central services, but also also national customs and customs posts

• AV (Catia) – available on the Finance Portal 24 hours a day, 7 hours a week;
• Updated preparation of the fiscal calendar on the Finance Portal.

“LUCK INVOICE” DRAW

AT maintains as an incentive to promote voluntary compliance with tax obligations, the Draw “Lucky Invoice”. The draw began in April 2014, and in 2022 the prizes were made by Treasury Certificates (current issuance), issued by the Treasury and Bank Management Agency Public Debt – IGCP, EPE, with a value of 35,000 EUR in regular draws, and 50,000 EUR in extraordinary draws.

The objective of this initiative is to promote the tax citizenship of taxpayers in the fight against the economy informal, in preventing tax evasion and avoiding distortion of competition, in order to continue a more equitable tax system.

The participation of consumers, who when requesting invoices with NIF are automatically enabled to participate in the “Lucky Invoice” Draw, constitutes a fundamental element and works as a factor of regulation of national economic activity.

Due to structural contingencies, during 2022, the Fatura da Sorte draw was suspended in the end of February. It was resumed at the end of April, with all suspended draws having been recovered. O number of consumers eligible for the draws registered an average of 10,134,124 contributors, a variation of around 2.84% when compared to the same period in 2021 (9,854,713 taxpayers), as can be seen in the following graph:

Graph 11 – Evolution of the number of taxpayers eligible for the “Lucky Invoice” draws

This trend is reflected in the 14.59% growth in the number of invoices with the taxpayer number (NIF), in 2022 compared to the same period in 2021, as well as the increase of 15.62% in the total value annual invoices (71,619,813,640 EUR) in 2022 compared to 2021 (61,943,178,941 EUR), according to the following tables.

Graph 12 – Evolution of the number of invoices eligible for the “Lucky Invoice” draws

Graph 13 – Evolution of the total value of invoices for the “Lucky Invoice” draws

Of the 58 “Treasury Certificates” awards awarded in 2022, 55% of the winners were of the same kind male (32), and 45% are female (26). The winners are distributed across seven tracks ages (ÿ30 years; 31-40; 41-50; 51-60; 61-70; 71-80; >80), it was found that the 51-60 age group (17 winners) represents 29% of the total number of winners, followed by the age group ÿ 30 years (13 winners) with 22%.

4.1.2. Declarative compliance

4.1.2.1. IRS

IRS MODEL 3 DECLARATIONS

IRS Model 3 declarations received by 2022-12-31 and which are in force amount to 5,720,717, distributed as follows:

Table 6 – IRS declarations delivered in 2022

PRE-COMPLETION OF IRS MODEL 3 DECLARATIONS

In 2022, the project of partial pre-filling of Model 3 declarations of IRS, with more declarations being partially pre-filled – 6,137,163, compared to the year 2021 – 6,038,512.

This year, pre-filling of Annex G began for taxpayers who have received category G income, namely, capital gains arising from the sale of shares and of other securities. Thus, the declaration presents the following pre-filled data:

• Income from dependent employment (category A), property (category F) and pensions (category H) paid or made available to the respective holders;
• Withholdings at source made on income in categories A, B (incomeprofessional and business), F, G (asset increases) and H;
• Mandatory Social Security deductions for income in categories A and H;
• Union dues made in categories A and H;
• Payments on account under category B;
• Tenants’ NIF (attachment F);
• Individual retirement savings plans (PPR);
• Individual contributions to pension funds, mutual associations and others complementary social security schemes;
• Insurance premiums or contributions paid to mutual associations that cover exclusively health risks;
• Interest on debts related to the acquisition, construction, improvement of properties and contract installments concluded with housing cooperatives or in the group purchasing regime, with properties for own and permanent housing or rental for permanent housing of the tenant;
• IBAN;
• Donations;
• NIF of dependents, civil godchildren and dependents in joint custody, as well as the fields relating to Alternate Residence, % of Expense Sharing and Parental Responsibility, for dependents in joint custody;
• Income from dependent work obtained and respective withholdings supported, in the scope of the tax regime applicable to former residents, in accordance with article 12-A of the IRS Code;
• Income from independent work (category B), for taxpayers registered exclusively in the activities provided for in the table of article 151 of the CIRS, with the exception of code 1519.
• Income from capital gains (category G), for taxpayers who carry out the sale shares and other securities.

This year, a total of 1,944,362 automatic IRS declarations were settled, of which 1,806,331 declarations were confirmed by taxpayers, with the remaining 138,031 were settled at the end of the legal delivery period, in accordance with paragraph b) of paragraph 4 of article 58.º-A of the IRS Code.

OFFICIAL IRS SETTLEMENTS

Regarding the number of IRS Model 3 declarations detected missing, during the year 2022, it is noted compared to the previous year, they decreased significantly, both in quantity and value, having 16,292 settlements were made (65,887 in 2021), which translated into an amount of 76,894,576 EUR (194,759,026 EUR, in 2021). This decrease in 2022 was due to the fact that the first 01-12. On that date, 22,573 settlements were generated centrally, resulting in a value of generation of unofficial declarations of Model 3 defaulters from the year 2019 only occurred in 2021- 52,210,861 EUR.

Table 7 – IRS settlements for defaulting taxpayers (2021/2022)

IRC

IRC MODEL DECLARATIONS 22

During 2022, 576,406 declarations relating to several tax periods, as can be seen in the following table:

Table 8 – IRC Model 22 declarations received during 2022

Of these declarations, 546,837 were delivered within the legal deadline and 29,569 after the deadline, the latter corresponding to 5.13% of the total validated declarations. The latter include declarations submitted voluntarily following inspection actions. Compared to the In 2021, a further 15,808 declarations were received in 2022, which corresponds to an increase of 2.82%. During 2022, a further 11,044 declarations were also received within the deadline legal, which corresponds approximately to an increase of 2.06% compared to the previous year.

Regarding declarations submitted after the legal deadline, from 2021 to 2022, a increase of approximately 19.21%, corresponding to 4,764 more declarations.

Regarding the type of declarations delivered, 556,154 correspond to first declarations and 20,252 to replacement declarations, 3.51% of the total validated declarations, as possible check the following table.

Table 9 – First declarations and replacement declarations

PRE-COMPLETION OF IRC MODEL 22 DECLARATIONS

The automatic pre-filling of the Model 22 income statement has not changed during the year 2022, compared to that implemented in previous periods.

The existing automatic pre-filling of the following fields of the Model declaration was maintained 22 of the IRC, through cross-referencing with registration and financial information, which correspond to the which had already been made available in previous periods:

• in table 02 of the cover, the field “Finance Service” and the “Code”;
• in table 03-1 of the cover, the “Designation” field;
• in table 03-3 of the cover, the field “Type of taxable person”;
• in table 10, field 359 “Withholding taxes”, field 360 “Payments on account” and the field 374 “Additional payment on account;
• in table 12 “Withholding taxes”, in field 1 the “Tax identification number” and in field 2 the value of “Withholding taxes”.

FAILURE TO SUBMIT CIT MODEL 22 DECLARATIONS

During 2022, around 33,319 warning letters were issued to defaulting taxpayers. IRC Model 22 income declaration, for the period 2021, for regularization purposes voluntary declaration obligation and payment of self-assessed tax.

OFFICIAL IRC SETTLEMENTS

As a form of reaction to declaratory non-compliance, article 90 of the Tax Code on Income of Collective Persons (CIRC) provides for the issuance of unofficial settlements when the taxpayer does not submit the income declaration or self-assess the tax due.

In the year 2022, 22,125 unofficial settlements relating to for the period 2021, corresponding to a global tax base of 961,255,799 EUR and a collection of IRC totaling 200,650,521 EUR.

Throughout 2022, an additional 794 unofficial settlements were generated relating to periods prior to 2021, corresponding to a global tax base of 55,064,578 EUR and a collection of IRC totaling 11,501,669 EUR.

Table 10 – Official IRC settlements

4.1.2.2. VAT

PERIODIC VAT DECLARATIONS

The level of voluntary compliance with the submission of the periodic VAT declaration (DP), for the periods on a monthly basis. VAT for the year 2022 was on average 93.9% on a quarterly basis and 97.3% on a quarterly basis.

Table 11 – Level of voluntary compliance with the submission of the VAT periodic declaration (DP)

The degree of voluntary compliance with the obligation to submit the periodic VAT return results from the ratio between the total number of periodic declarations submitted by taxpayers, within the deadline legal date of delivery and registered as the first declaration and the total number of declarations in force.

AUTOMATIC VAT

Within the scope of automatic VAT, with reference to the 2022 VAT periods, they were partially prepaid more than 2.6 million declarations were completed, relating to around 314 thousand taxpayers.

Table 12 – Automatic VAT – VAT Periods 2022

PRE-COMPLETION OF VAT DECLARATIONS

For the quarterly periods, VAT returns for the year 2022 were pre-filled, within the scope of the Automatic VAT, more than 83 thousand VAT declarations.

Table 13 – Pre-filling of quarterly declarations 2021

OFFICIAL SETTLEMENTS IN NUMBER AND VALUE ISSUED REGARDING VAT

Furthermore, with reference to the 2022 VAT periods, more than 166,000 assessments were issued VAT unofficials, which correspond to around 178 million EUR of tax paid.

E-TAX FREE

In 2022, more than 635 thousand invoices were certified, corresponding to a total recognized value of VAT exemptions of around EUR 63 million.

Table 15 – e-TaxFree – Global Certified Invoices

The nationals of Brazil, the United States and Angola, in a total of 243 nationalities, explain this order, more than half of invoices certified on e-taxfree.

Table 16 – e-TaxFree – Invoices certified by nationality (2022)

Residents in Brazil, Angola, United States, United Kingdom and Mozambique explain, in this order, more than 71% of the value of purchases with VAT that were subject to e-taxfree certification by country of residence.

Table 17 – e-TaxFree – Invoices certified by country of residence (2022)

Lisbon airport is by far the main departure point for certified invoices, with a weight of almost three quarters of the total certified invoices.

Table 18 – e-TaxFree – Invoices certified by EU exit location (2022)

4.1.2.3. IMT/IMI/IUC and Stamp Tax

With the publication of Law No. 12/2022, of June 27, which approved the State Budget for the year 2022, changes were introduced to the IMT Code, with the objective incidence being extended.

• Onerous transfer of the right to sharecropping;
• Entry of partners with real estate to make additional payments;
• Adjudication of real estate to partners and investment fund participants closed real estate under private subscription;
• Entry of partners with real estate to pay up the capital of the remaining companiescivilians.

The following table presents the liquidated revenue associated with the various taxes in the area of heritage

Table 19 – Revenue paid by tax in 2022

It should be noted that the IMI is settled annually based on the taxable asset values as of 31 December of the year to which the tax relates. The amount settled, in 2022, refers to 2021 and years previous ones, with 8,172,307 EUR referring to rustic buildings, and 1,513,461,329 EUR referring to urban areas, totaling 1,521,633,636 EUR.

OFFICIAL SETTLEMENTS

In relation to the year 2022, 6,084 unofficial settlements were carried out in IMT and 644,560 in terms of IUC, which resulted in the amount of 1,655,683 EUR and 53,079,065 EUR of tax in missing, respectively. With regard to IS, the amount paid ex officio was 667,977 EUR.

4.1.2.4. Customs declarations / Special Consumption Taxes

CUSTOMS IMPORT AND EXPORT DECLARATIONS

Table 20 – Customs Declarations

(amounts in thousands of euros)

Source: AT/Gestão Aduaneira

GLOBAL MAP OF NET CUSTOMS COLLECTION

In global terms, net collections related to IEC and Vehicle Tax (ISV) calculated by Customs in 2022, amounted to 5,171.18 million EUR, showing a decrease of 9% (less 512.555 million EUR) compared to 2021, mainly justified by the drop on the ISP, as it develops further.

Table 21 – Net Customs collection

In 2022, in national territory, the following were registered by customs services:

• 353,112 Vehicle Customs Declarations (DAV) referring to imported vehicles and/oradmitted who obtained national registration, and
• 256,965 Electronic release for consumption declarations (e-DIC) referring to products subject toto excise taxes (IEC).

Table 22 – Statistics of electronic accompanying documents (e-DA) issued and received, for the year 2022

TAX ON PETROLEUM AND ENERGY PRODUCTS (ISP)

In 2022, ISP charges determined by Customs totaled 2,834.315 million EUR, amount that reflects a decrease of 18.66% (less EUR 650.494 million) in relation to the period same year last year (EUR 3,484.809 million).

This behavior is justified, in particular, by the Government’s measures (with emphasis on the reduction in ISP rates, which aim to mitigate the effect on the market of price changes for fuels).

TOBACCO TAX (IT)

In 2022, IT charges assessed by Customs totaled EUR 1,551.1 million, amount that reflects an increase of 3.63% (more EUR 54.316 million) in relation to the period same year last year (1,496.784 million EUR). The behavior evidenced by revenue reflects the evolution of economic activity and private consumption, with effects on the introduction of tobaccos.

TAX ON ALCOHOL, ALCOHOLIC DRINKS AND DRINKS WITH ADDITIONAL SUGAR OR OTHER SWEETENERS (IABA)

In 2022, IABA charges cleared by Customs totaled EUR 332.153 million, amount that reflects an increase of 22.36% (more EUR 60.705 million) in relation to the period same year last year (271.448 million EUR). The behavior evidenced by revenue reflects a recovery in economic activity and private consumption, with positive effects on the evolution of introductions into the consumption of products subject to IABA.

VEHICLE TAX (ISV)

In 2022, ISV collection by Customs totaled 453.612 million EUR, representing a variation of 5.3% (22.918 million euros more compared to 2021). This one behavior was due to the increase in vehicle sales in all categories, in particular, new and used passenger vehicles.

4.1.2.5. e-Invoice System

In 2022 there was a 17.7% increase in the number of documents communicated to the system and Invoice compared to the year 2021, with a total of 5,640 million documents having been communicated, which are approaches the number of documents communicated in 2019, which was 5.882 million.

Graph 14 – Evolution of the number of documents communicated to AT – 2020-2022 – per month

In 2022, 1,656,050,661 documents with NIF from a single acquirer were communicated, verifying an increase of 14.26% compared to the previous year.

Graph 15 – Evolution of the number of documents with individual acquirer NIF from 2020-2022 – per month

In 2022, the two-dimensional barcode (QR code) became mandatory on all invoices significant growth in the communication of invoices by acquirers using code reading issued through a certified invoicing program. As a result of this change, there was a QR, through the e

Fatura App, instead of registering on the Finance Portal. Of the 7,546,332 documents communicated by acquirers to AT during 2022, 5,688,763 were registered on the Finance Portal and 1,857,569 by reading the QR code using the App e-Invoice.

Graph 16 – Evolution of the number of documents communicated by acquirers from 2021-2022 – per month

TAX PAID, TAX DEDUCTED AND TAX RETURNED TO THE STATE – SECTORS WITH BENEFIT

Issuing an invoice in specific sectors of activity gives the right to a tax benefit, provided that it is requested, at the time of acquisition of the good or service, the insertion of the NIF in the invoice, corresponding to the deduction of a percentage of the VAT incurred: 15% on car repair expenses and motorcycles, accommodation and catering, hairdressers and beauty institutes, veterinary activities, centers sports and gyms and 100% on monthly public transport passes.

In this sense, it is important to analyze the behavior of the sectors of activity that provide access to such benefit, given the overall performance of all sectors of activity, as well as evaluating its evolution by comparison between periods and the same period.

Table 23 – Annual VAT values by activity sectors – Variation 2021-2022

The variation in the level of activity calculated depending on the values of the VAT tax base, constant of the DP delivered with reference to the years 2021 and 2022, it was 19% (plus EUR 61 billion). The sectors of activity associated with the tax benefit that showed a slower evolution Significant were those relating to motorcycles and veterinarians (3% and 8%, respectively).

7 The values for 2021 differ from the corresponding RCFEFA 2021 table, due to changes in VAT DPs

This scenario was influenced by the end of restrictions on the normal exercise of activity, which still influenced the first half of 2021, providing a strong economic recovery, and the increase in the inflation rate8 that occurred during 2022

Graph 17 – Comparative analysis of the tax base / VAT tax between sectors with benefits and other sectors of activity – annual evolution 2020/2021

4.1.2.6. Transport document management system

The system for electronic communication of goods transport documents to AT came into force on the day 2013-07-01, for companies with a turnover equal to or greater than 100,000 EUR in the previous year. With this dematerialization process, it is no longer mandatory to track goods carried over from discriminatory paper documents. Since the communication of each transport must be carried out before its start, the system operates in real time with the activity of companies, reflecting, at all times, the ongoing operations of transport of goods.

8 In 2022 the inflation rate recorded an average annual variation of 7.8%. Consult: https://www.ine.pt/xportal/ xmain?xpid=INE&xpgid=ine_destaques&DESTAQUESdest_boui=577455859&DESTAQUESmodo=2

9 The values for 2021 differ from the corresponding RCFEFA 2021 graph, due to changes in VAT DPs.

The number of transport documents (DT), as well as the total number of goods transported, relative to the year 2022, the evolution was reflected in the following graph:

Graph 18 – Monthly evolution of electronic transport documents and communicated goods

Table 24 – Annual evolution of the number of DTs and quantity of goods – Variation 2020-2022

In 2022, the growth trend in the number of transport documents and the quantity of goods communicated by more than 71,000 different economic agents, continuing the Webservice being the preferred channel for issuers, with around 88% of documents communicated this way. Because this communication is completely automatic and dematerialized, without the need for any additional human intervention, this option increases the efficiency of the companies’ operation, allowing to reduce the costs associated with fulfilling this obligation.

4.1.3. Taxpayer support alerts

4.1.3.1. Alerts to support voluntary compliance

The evolution of tax systems has led to increasing importance being given to promoting voluntary compliance. In this sense, AT has been giving greater importance to actions that support and help voluntary compliance, aimed at segments of taxpayers who, although they reveal some signs of tax non-compliance, they also appear to have an appetite for comply, if instructed to do so. In fact, among the taxpayers who do not comply, some will do so due to ignorance of the situation, or because, despite being aware that they are not complying, they do so because they feel divergences can play a relevant role due to the interaction it allows with the taxpayer, whether that their conduct is not serious or that it is not fully controlled by AT. In this case, the system of across:

• Alerts to support voluntary compliance with standardized responses pre-configured by the AT, selectable by the taxpayer that allows the detected non-compliance to be justified or assumed it in its different aspects, presenting instructions on how to remedy it;
• Discrepancies in which the taxpayer justifies the flagged nonconformities as he sees fit, allowing a detailed response from the customer, and can also attach documentation proof, which will later be analyzed by a technician, who will decide the steps subsequent actions, namely, when applicable, providing you with the necessary elements to regularize situations.

Alerts supporting voluntary compliance and divergences imply interaction between the AT and the taxpayers, with the purpose of remedying the flagged discrepancy, contrary to what happens with other tools to support voluntary compliance, namely information or warning alerts issued when completing some tax returns.

This interaction between the disagreement system and the taxpayer helps him to comply with more adequately fulfill its tax obligations, being aware that the regularization of the behavior will avoid further penalizing action by AT. The divergence system also allows recording cases in which the taxpayer believes that his behavior is in accordance with the law, presenting its justification. This, when accepted by AT, may prevent inspection actions, which may be unnecessary, from being triggered, reducing also litigation and enhancing the relationship with the taxpayer.

Finally, the record of the taxpayer’s interaction with the AT (whether response or absence of same) will allow the inspection, in its planning, to have an additional source of information, improving the efficiency of its operations.

Alerts are primarily measures to support voluntary compliance, whose main objective is to selected, due to the educational effect underlying them, at the same time that they call for the regularization of induce lasting future changes in taxpayer behavior on pre existing issues detected nonconformities.

In 2022, alerts were implemented in areas related to various taxes, namely:

• IRS:– Income earned abroad based on data reported through the Exchange Automatic Exchange of Information (AEOI);– Declared tax residence in Portugal;– Non-habitual resident with exemption method and income obtained abroad from categories B and E;– Imports that constitute evidence of the exercise of an economic activity.
• IRC:– Taxation of real estate capital gains arising from the sale of property investment;– Income resulting from the sale of properties;– Coefficient applicable in the Simplified Tax Regime (RST) to activities providing services similar to those provided for in article 151 of the CIRS.
• VAT:– Payment of VAT on intra-community acquisitions of goods and services;– Acquisition of electric or hybrid vehicles;– Inversion mechanism in the settlement of VAT on acquisitions of civil construction services;– Lack of regularization of VAT in favor of the State (Credit Notes);

  – VAT wrongly deducted;

  – Payment of VAT due for the import of goods in the periodic VAT declaration;

  – Tax representatives: support for voluntary compliance with VAT and IR.

Below is a summary of the global results of the alerts implemented, reflecting the values indicated in the replacement declarations submitted by taxpayers, highlighting the regularizations carried out (some relating to previous years).

Table 26: Global assessment of the results of alerts implemented in 2022

Source: AT

Grades:

1. Alerts to support voluntary compliance relating to income obtained abroad concern the codes of
alert:

The. GR04 – Submission of the 2021 IRS declaration: The financial impact assessed by the increase in income obtained in foreign, declared in Annex J of IRS Model 3 for the years 2018, 2019, 2020 and 2021, was 586 million EUR. These voluntary regularizations were carried out by 18,380 taxpayers, representing 51% of the 36,205 SP selected;

B. GR31 – Specific item AEOI gross proceeds/redemptions: The financial impact assessed by the inclusion of this item in the Annex J of IRS Model 3 for the year 2019 was EUR 38 million. These regularizations were carried out by 24 taxpayers; w. R10 – Discrepancy resulting from the omission of income reported via DAC1 or DAC2/CRS/FATCA in Annex J addressed to 6,706 taxpayers: The financial impact assessed by the increase in income obtained abroad declared in Annex J of the Model 3 of IRS, referring to the year 2018, was 127 million EUR (70 million EUR resulting from voluntary regularizations made by 3,872 taxpayers and 57 million EUR resulting from unofficial corrections promoted by AT with 1,852 taxpayers).

2. Alerts relating to IRC concern alert codes GR36, 39, 40 and 41: The financial impact of these alerts, real estate gains and incorrect application of the simplified regime coefficients, assessed by the addition to the tax base, for the year 2020, it was 2.7 million EUR. These regularizations were carried out by 79 taxpayers representing 18% of the 433 contributors selected for these alerts.

3. VAT-related alerts concern alert codes GR 25, 27, 28, 30, 34, 37 and 38: The financial impact of these alerts, VAT settlement on intra community acquisitions, civil construction services and undue deduction of VAT in periodic declarations, assessed by the additional tax for the years 2019, 2020 and 2021, it was EUR 2.8 million. These regularizations were made by 671 taxpayers representing 26% of the 2,615 taxpayers selected in these alerts.

It is also important to note that, in addition to the results indicated above obtained with the different alerts of support for voluntary compliance, greater declarative care was found when filling out different informative fields of the Simplified Business Information (IES), of the declarations periodic VAT and different registration and ancillary tax declarations, reducing discrepancies detected and translating into an “educational” effect of the alert on the different themes addressed, and so on, in the quality of the data, but which were not reflected in changes to the base taxable or tax, and are therefore not shown in the graphs above.

4.1.3.2. Alerts when filling out and receiving IRS model 3 declaration

In 2022, the alert system for filling out Model 3 declarations continued to intensify of IRS, delivered through the Finance Portal. This system is based on the crossing of information constant in the AT databases, namely in the monthly remuneration statements (DMR), in declarations Model 10, Model 44, among others, allowing to reduce settlement times, as well as litigation, simultaneously allowing more effective and effective control of the elements in-depth.

In the year under review, three new alerts were introduced, related to the income of the category G.

• Date of acquisition of shares and other securities inconsistent with the date of birth of the holder;
• Category G losses, arising from the sale of properties;
• Allocation of real estate to business and professional activities.

It should be noted that, in 2022, Model 3 declarations were presented exclusively via the Internet, totaling 6,137,163 declarations, as had been happening since 2018

4.1.4. Divergence control

4.1.4.1. IRS

CONTROL OF DIVERGENCES IN THE RECEIPT OF IRS MODEL 3 DECLARATIONS

In 2022, in the settlement of declarations relating to previous years, and similarly to what had already been carried out in previous years, automatic control of divergences was carried out, namely income, withholding taxes, personal elements, tax deductions, etc. In the total universe of 5,612,454 Model 3 declarations that were in the “current” state, relating to the year 2021, 158,530 divergences were detected (2.82% of the total).

This application made it possible to quickly and effectively resolve situations in which the declared elements by taxpayers differed from the elements known by AT, and which are normally provided by third parties. This fact can be proven by the reduced number of pending situations in 2022-12-31, which corresponded to 5,232, that is, 3.30% of the total

RELIQUIDATIONS DUE TO EXISTENCE OF DEBT

In 2022, 6,470 additional settlements of Model 3 declarations were made, relating to the years of 2018 to 2021, referring to taxpayers, whose right to tax benefits ceased due to not having the regularized tax situation. These additional settlements resulted in an increase in collections in the amount of 1,088,563 EUR, compared to the amount of 527,733 EUR, calculated in the previous year.

CONTROL OF REINVESTMENT RELATING TO PROPERTY GAINS

In 2022, AT carried out 6,598 additional settlements, referring to IRS Model 3 declarations, relating to the period 2018, due to the fact that taxpayers registered their intention to carry out the reinvestment, and have not carried out the total or partial reinvestment of the value of achievement obtained with the sale of properties, within the deadlines established by law. The aforementioned additional settlements resulted in increases in gross taxed income in the amount of 140,117,691 EUR. This amount is substantially higher than the increase in gross income taxed last year, for the same reason, and which corresponded to 93,409,214 EUR.

4.1.4.2. IRC

CONTROL OF TAX LOSSES DEDUCTIBLE UNDER ARTICLE 52 OF THE CIRC

The procedure for declarative control of tax losses deducted, in accordance with article 52 of the CIRC, to declared taxable profits, was subject to control for many years after the validation of the income declarations Model 22, by issuing notifications to replace the declaration, whenever the values did not correspond to the existing balance in the tax loss current account. Since 2019, control has been carried out through the central validation system, with the creation of central error codes and notification to taxpayers to correct them within a period of 30 days, as provided for in Ordinance No. 1339/2005 of December 30th.

This system allows correction of the submitted declaration itself, instead of replacing it. Like this new procedure, efficiency gains were obtained, as it was no longer possible to validate declarations with divergences in the amounts of losses, thus avoiding an analysis subsequent declarations. However, procedures were still introduced for periods prior to 2021, through the central system. The cases analyzed, in 2022, are essentially relating to the periods from 2018 to 2020, and smaller amounts of divergences. were carried out during 2022 the following corrections:

Table 25 – Control of deductible tax losses

Source: AT/IR

During 2022, only 17 taxpayers were notified, with discrepancies between the amounts deducted and those contained in the current account of tax losses.

17 Model 22 declarations were officially corrected through an unofficial correction document (DCO) and the respective corrective settlements were extracted. The value of the corrections amounted to 130,031 EUR, which correspond to the difference between the value of the tax losses declared by the taxpayer, in the field 309, in table 09 of the Model 22 declaration, and the tax losses corrected by services in the same field.

CESSATION OF DEDUCTION OF TAX BENEFITS IN CASE OF DEBT

In 2022, the Model 22 declarations submitted by taxpayers who deducted tax benefits and had debts at the end of the tax period in which the the tax event, which resulted in the reinstatement of the taxation rule. During the year 2022

The following corrections were made:

Table 26 – Cessation of deduction of tax benefits in case of debt

Tax benefits (namely income deductions, tax deductions and rate reduction schemes) in 361 IRC declarations.

Regarding tax benefits that operate by deduction from income, in 2022, 34 declarations not accepted, amounting to 2,659,634 EUR (field 774 of table 07 of Model 22).

Regarding tax benefits that operate by deduction from tax collection, 12 declarations that were not accepted, in the amount of 139,287 EUR (field 355 of table 10 of Model 22).

315 declarations were also corrected for other reasons, in most cases due to failure to acceptance of the preferential rate (reduced rate), the value of the corrections of which was 620,309 EUR. The biggest part of the cases had to do with the cessation of benefits to companies based in inland regions (art. 41.º-B of the Tax Benefits Statute (EBF)) and the remainder to entities licensed to operate in the Madeira Free Trade Zone taxed under the regimes of articles 36 and 36-A of the EBF.

CONTROL OF WITHHOLDINGS DEDUCTED FROM IRC COLLECTION

Regarding the control of the deduction of withholding taxes from IRC collection, which consists of detecting of divergences between the deductions shown in table 12 of the income declaration Model 22 and the withholding taxes shown in the Model 10 declarations, submitted by the debtor entities of income subject to withholding at source, the following were carried out during 2022 fixes:

Table 27 – Control of withholding taxes deducted from IRC collection

During 2022, 1,978 declarations with discrepancies in withholding taxes were processed deducted, of which 592 were subject to correction of the amount deducted in favor of the State, totaling 972,568 EUR. Most of the corrections were made to Models 22 from the 2021 period, whose campaign reception took place during 2022.

4.1.4.3. VAT

During 2022, the information received through e-invoice continued to be used for control of the VAT values declared in periodic declarations. 3,433 situations were detected for analysis, in which the VAT declared in the periodic declaration was lower than the VAT reported in the invoices (F02). 2,120 situations of non-delivery of VAT mentioned on invoices were also detected by taxpayers not registered to carry out any activity (F06), or by taxpayers registered in an activity, but under a VAT exemption regime (F07).

A new divergence procedure (IA1) was also initiated in 2022, aimed at controlling VAT declared in field 19 of the DP and the VAT paid by customs, on taxpayers who, by choice, fell under this regime10. In this procedure, 1,005 situations were detected.

10 With the changes introduced to articles 27 and 28 of the VAT Code (CIVA), by Law no. 42/2016, of December 28 (LOE 2017), taxpayers covered by the monthly periodicity regime began to be able to choose to pay the VAT due on imports of goods, through the periodic declaration referred to in subparagraph c) of paragraph 1 of article 29 of the CIVA, provided that the conditions set out in subparagraphs a) to d) of the CIVA are met. paragraph 8 of the aforementioned article 27, in its initial wording.

4.1.4.4. Invoice communication

With regard to monitoring compliance with the obligation to communicate invoices, 12,745 discrepancies due to lack of communication of invoices (F04, F05 and F31). The following table summarizes the results relating to VAT, e-invoice and inventory communication divergences:

Table 28 – VAT discrepancies, lack of communication of invoices and inventories11

4.1.5. Prior transfer pricing agreements

The APPT is an agreement between one or more taxpayers and one or more Tax Administrations that aims to establish, in advance, the method or methods capable of ensuring the determination of the terms and conditions that would normally be agreed, accepted or practiced, between independent entities in commercial and financial operations carried out between entities related.

11 The “pending” columns do not include divergences issued in December and whose resolution was carried forward to the following year.

The possibility of concluding an APPT is provided for in article 138 of the CIRC. The procedures appropriate to each of the phases of the process of concluding an APPT, and during the period of its validity, are provided for autonomously, in paragraph 10 of the aforementioned legal article.

Depending on whether they are concluded by one or more Tax Administrations, APPTs may be classified as unilateral, bilateral or multilateral. The conclusion of an APPT has advantages both for Tax Administrations and for taxpayers. For the first results, namely, greater certainty in determining revenue, a factor that enhances investment foreign country and a reduction in disputes between Tax Administration and taxpayers. For these The latter, in addition to reducing disputes, also results in greater legal certainty and security, a reduction of compliance costs and, in the case of bilateral or multilateral APPTs, an elimination of risk of double taxation.

The processing of an APPT consists of the following phases: request for preliminary assessment, presentation of the proposed agreement, assessment of the proposal, possible discussion within the scope of friendly procedure with tax administrations of counterparties in linked operations covered, conclusion of the agreement and review and monitoring of the agreement. Taking into account the different phases, the situation during 2022 evolved as follows:

Table 29 – Evolution of Prior Transfer Pricing Agreements

The year 2022 thus allowed, compared to previous years, to obtain positive developments in the portfolio of APPT under negotiation, either due to the conclusion of six agreements or due to the evolution of the assessment phase and negotiation in which they are currently in, those that have been carried over to 2023 and are currently under analysis.

The APPTs currently in force ensure estimated coverage of around EUR 5.3 billion of linked operations, which materializes a guarantee of legal certainty associated with compliance with the principle of full competition, of around 68% of the total linked operations, carried out by the taxpayers with whom the APPT was signed.

Bilateral APPTs represent 47% of the total APPTs under negotiation, or in force in 2022- 12-31, which compared to the 42% recorded in 2021, demonstrates the importance given by companies to this instrument for preventing international double taxation and disputes.

According to OECD statistics, friendly procedures for the elimination of double taxation, which involve transfer pricing issues, have an average duration of three years, This duration must be added to the average duration of an inspection procedure of which adjustments emerge in this area, to estimate the time needed to obtain security legal entity associated with the processing of transactions between related entities. The average time for celebration of a bilateral APPT has fluctuated, since the beginning of the program, between one and six years, which compares favorably with statistics from that international organization, reiterating the relevance of APPTs as an instrument for preventing international double taxation and disputes.

It should also be noted that, in relation to six of the eleven APPTs that on 2021-12-31 were in the of appreciation, remaining as of 2022-12-31, AT had already presented, on this last date, the its position, with the evolution of the assessment pending the expression of the management’s position tax jurisdiction of the related counterparty, or the manifestation of the taxpayer’s agreement applicant with the terms proposed by AT.

Agreements concluded by AT, or in the evaluation phase, since the beginning of the APPT program, have the following characteristics, serving the counterparty in the operations covered.

Table 30 – Number of Prior Transfer Pricing Agreements – 2022

4.1.6. Other AT actions within the scope of the relationship with the taxpayer

EUROPEAN TRUST AND COOPERATION APPROACH (ETACA)

AT, through the Large Taxpayers Unit (UGC), was among the 12 tax administrations who were part of the working group organized by the European Commission (EC) that prepared the ETACA project guidelines (released in 2021). In 2022, the ETACA pilot project began, with AT, through the UGC, participated in the assessment of the tax risk of a multinational group, foreseeing the completion of the pilot project during the first half of 2023.

This project aims to facilitate and promote tax compliance by taxpayers based on greater cooperation, trust and transparency between taxpayers and tax administrations and between tax administrations. The project is based on a dialogue between tax administrations and taxpayers enabling a high-level risk assessment of transfer pricing policy to be carried out adopted by multinational companies.

4.2. Action within the scope of the institutional relationship

4.2.1. Administrative mutual assistance

The fight against fraud in the context of a customs union requires close collaboration between administrative authorities responsible in each MS for implementing the provisions adopted in this domain and between them and the European Commission (EC).

With regard to the first pillar of collaboration, that is, between customs authorities, AT, in its administrative cooperation relations with counterparts in the MS or third countries, received and requested a total of 217 requests for assistance, distributed as follows:

Table 31 – Requests for administrative mutual assistance

Regarding the second pillar of cooperation, that is, between AT and EC, in customs matters, this took place, fundamentally, with intervention, on the part of the Commission, the Fighting Organization Anti-Fraud (OLAF) and the Directorate-General for Taxation and Customs Union (DG TAXUD).

Administrative cooperation with OLAF is promoted through the secure system, Mutual Assistance System (MAS) of the Anti-Fraud Information System (E-mail System) (AFIS), under the cover of Regulation 515/97, reporting specific information on cases of fraud or serious irregularities, with repercussions on the Union’s financial interests and with an impact on more than one MS, which required appropriate treatment by the Tax and Customs Inspection.

Within the scope of this treatment and as an immediate reactive action, several protective actions were carried out control, which generally took the form of customs inspections or criminal investigations, as legally appropriate, especially focused on national economic operators suspects, with the aim of proving or ruling out the reported evidence, identifying potential responsible and recover amounts that may have been evaded.

Furthermore, the processing of this information, whether upstream or downstream of the actions operational, also gave rise to the implementation of a significant set of preventive measures, especially in the context of the Automatic Selection System (SSA), aiming at timely identification and effective detection of cases of fraud or irregularities that correspond to the implemented risk profiles.

With regard to relations with the EC – DG TAXUD, in terms of risk management and exchange of risk information, during the year 2022, was received, via the Common Risk Management System (Common Risk Management System) – CRMS2, a total of 2,944 risk forms (Risk Information Forms (RIF)), relating to risks assessed by another Union customs authority or by the EC itself and that they considered that the threat in question represented a high risk elsewhere in the Union.

This extraordinary increase, compared to the year 2021 (whose number stood, in that year, at 1,700), is explained by the EU’s response, in terms of restrictive measures taking into account the actions of Russia who destabilized the situation in Ukraine.

Immediately after the Russian aggression, which began in February 2022, the EC, through DG TAXUD, opened the crisis module in CRMS2, through which all risk-related information began to circulate with the situation in Ukraine, which thus allowed an immediate exchange of information, enabling a joint and harmonized response from all customs authorities in the Union, especially relevant, as is understood, in identifying and repressing any attempts of evasion of measures, through more or less complex fraud schemes, depending on the case.

As a result of the assessment of risks considered significant, with potential impact on other IN or throughout the Union, Portugal issued a total of 20 RIF, 17 case-specific communications related to the aggression against Ukraine, and dozens of messages and communications exchanged with our counterparts, in another MS or with the Commission, complying with the legislative obligation on the exchange of information and risk analyses, with a view to mutual cooperation in risk detection and prevention.

COOPERATION UNDER THE CCPA

AT continues to participate in cross-border cooperation with Spain, at CCPA level, with statistics on this activity now concentrated in the Single Point of Contact for International Police Cooperation, given the management carried out via the PUC Management System.

4.2.2. Cooperation with other countries

ACTIVITY DEVELOPED WITHIN THE EUROPEAN UNION

With regard to participation in work relating to tax and customs matters, whether within the scope of the Commission and the Council of the European Union, during the year 2022, the national representation at the monthly meetings of the Law Enforcement Group – Customs (LEWP-C) and in various project groups, committees and EC forums, as detailed below.

In 2022, an assessment of the application of the Schengen acquis to Portugal was carried out, in which AT participated, paying attention to their respective competencies, both in preparatory work at national level and in conduct of local assessment visits. Customs services were subject to evaluation in the areas of External Border Management (sea and air), Police Cooperation and SIS/SIRENE12 .

COUNCIL OF THE EUROPEAN UNION

For the 2022-2023 biennium, Portugal took the lead in action 11.10. Abuse of maritime shipping – sea containers and co-leadership of actions 11.09. Explosives and 11.11 Action on trafficking of cocaine, from Plano of Action of the LEWP-C, within which it has promoted the execution of the mandates presented and approved within that Council Forum.

The actions driven by Portugal, as responsible, include joint operational actions, where possible and justified including other MS national authorities, such as law enforcement authorities or border guards. The participation of the most relevant European agencies, in function of the matter, such as EUROPOL, FRONTEX or EUIPO, was also ensured.

The private sector, whether at the level of manufacturing/production industries, or associations international, was boosted and proved, as was predictable, to be of the greatest importance, given the sharing of common objectives and interests, in terms of combating crime and illicit trafficking, especially those potentially dangerous to citizens).

12 SIS/SIRENE – Supplementary Information Required by National Registries in the Schengen Information System
Supplementary Information Requested at the National Entry

DEFINITION OF EMPACT CRIMINAL PRIORITIES – CYCLE 2022-2025

Portugal, represented by AT, actively participates in seven of the 15 Operational Action Plans of the cycle EMPACT 2022-2025. AT’s areas of intervention are as diverse as: combating crime associated; drug trafficking; the protection of intellectual property; environmental protection; to crime financial; to special consumption taxes; VAT fraud and firearms trafficking. AT, in coordination with the Internal Security System and the various national authorities relevant, has actively contributed to the collection and exchange of information and intelligence and participation operational, in actions and operations whose execution involves customs control of the external border and the safety and security of international logistics chains.

The role played by the Tax and Customs Inspection, as a representative of the AT in the EMPACT priorities, has had with regard to finding synergies between the cycle EMPACT and the specific actions of the LEWP-C Council group Action Plan, avoiding operational overlaps and simultaneously ensuring operational coordination over time and space, bringing the right actors, in terms of national authorities, to the actions and activities right operations, paying particular attention to the specific skills of each one.

EUROPEAN COMMISSION

Portugal, through AT, joined the Commission and four other MS to develop a pilot exercise, the purpose of which is to carry out a proof of concept on how to deal with new high-impact threats, in terms of security, geopolitical changes or other events crisis, enhancing the speed of implementation of measures and countermeasures, which aim to respond quickly respond to situations, using data on commodity transactions present in the repository central associated with the Import Control System (ICS2).

EUROPOL

Cooperation with Europol has been particularly integrated into the development and participation through OAP EMPACT36. AT participated in the annual European Police Chiefs Convention (EPCC) meeting which includes a meeting jointly with the Directors General of Customs Administrations, with the global theme of the convention being “The new horizon for law enforcement”. In addition to this international aspect, the collaboration between AT and Europol National Unit (UNE) takes place continuously, every day of the year, whenever matters fall under tax or customs powers in the context of combating organized crime.

WORLD CUSTOMS ORGANIZATION (WCO-WCO)

Portugal, through AT, participated in the annual meeting of the Organization’s Anti-Fraud Committee World Customs Office (WCO). The Committee operates under the general direction of the WCO Council and the Commission

Politically, it is participated by more than 180 member states and is responsible for contributing to the strategic direction of the work carried out by OMA in matters of compliance, control and intelligence, in accordance with the respective Strategic Plan in areas such as security, information, fraud commercial, mutual administrative assistance, illicit trafficking in drugs or other prohibited products, money laundering, crime, smuggling, environmental crime, transnational organized crime, firearms and, where applicable, the cross-border movement of people and goods.

Still within the framework of the WCO ENFORCEMENT Program, AT is part of the Working Group “Combating Illicit Narcotics Trafficking in Container and Liner Shipping” which aims to promote better cooperation, in terms of risk analysis and management, between the customs authorities of the countries members of the World Customs Organization and major shipping companies.

Within the scope of the SECURITY Program, AT began in 2022, together with other WCO member states, its active participation in Project Global Shield, which aims to monitor and control movements cross-border distribution of the main chemical precursors of explosives, thus aiming to cut the logistics chain of supply of these materials, seeking to drastically reduce the use of improvised explosive devices and the loss of human life.

UNITED NATIONS OFFICE ON DRUGS AND CRIME (UNODC)

AT continued, in 2022, to strongly support, through the provision of resources, the UNODC–WCO Container Control Program, which aims, fundamentally, to train staff and provision of material resources, in terms of control equipment and IT systems of mixed container control units, positioned in certain relevant countries, to the EU and Portugal, in matters of illicit trafficking, drugs, protected species, strategic goods or other security-related merchandise. In this aspect, within the scope of this program, a study visit to customs and other related authorities of Angola and Mozambique. Regarding the year 2022, the technical visit of a high-level delegation from Paraguayan Customs should also be highlighted.

4.2.3. Exchange of information with other tax administrations

4.2.3.1. Exchange of information with other tax administrations on matters of income taxes

With regard to the exchange of information on income taxes (IR), Portugal is subject to different regimes, namely at the level of bilateral conventions13 and multilateral agreements14, the Agreements on the Exchange of Information in Tax Matters (ATI)15 and those established by the sources of community law (Directives and Regulations).

The exchange of information can occur on request, spontaneously or automatically. This first form concerns situations in which a State requests specific and concrete information from another State. Spontaneous exchange occurs when a State, in the course of applying its own legislation tax and in the development of their skills, obtain information that they consider to be relevant to another State. Finally, automatic exchange consists of the systematic communication of pre- defined to another State, at pre-determined intervals.

Table 32 – Exchange of information “On request” and “Spontaneous” by Jurisdiction – IR

13 There are currently 78 conventions in force. Conventions to avoid double taxation are available in Finance Portal.

14 Included are the Multilateral Convention on Administrative Assistance – Convention on Mutual Administrative Assistance in Tax Matters. The respective amending protocol and subsequent agreements for exchanging financial information  https://www.oecd.org/tax/automatic-exchange/international-framework-for-the-crs/multilateral-competent-authorityagreement. pdf; and declaration of financial and tax information by country – https://www.oecd.org/tax/automatic-exchange/aboutautomatic exchange/cbc-mcaa.pdf

15 ATIs are available for consultation on the Finance Portal.

In 2022, in the exchange of information on request or spontaneously, 946 processes were initiated with 49 countries. Of these, 549 originated from requests received from other tax administrations and 397 refer to orders sent by Portugal. It should be noted that the number of processes increased of around 13.7% compared to the previous year, despite the number of countries with which Portugal carries out this type of information exchanges have decreased by around 14%. They stand out as main partners in the exchange of information regarding income tax, Germany, Spain, France, the Netherlands, Italy, the United Kingdom, Sweden and Switzerland, which as a whole represent 87% of orders received and 71% of those sent.

Graph 19 – Main partners in the exchange of information “On request” and “Spontaneous” – IR

In the automatic exchange of information and within the scope of DAC1, DAC2, DAC4, CRS, Foreign Account Tax Compliance Act16 (FATCA) and Country by Country Reporting (CBCr), Portugal received and sent information to 96 and 81 jurisdictions respectively. The total number of taxpayer registrations was 2,216,527 received and 4,772,222 sent.

16 Agreement between Portugal and the USA on the exchange of information relating to financial accounts

Table 33 – “Automatic” information exchange – IR

The main partners in this type of exchange are Germany, Spain, France, Luxembourg, the United Kingdom, Switzerland, Brazil and Lithuania, representing 80% of the information received and 87% of the information sent.

Graph 20 – Main partners in the exchange of “Automatic” information – IR

4.2.3.2. Exchange of information with other tax administrations on matters value added tax

In the context of Regulation (EU) 904/2010 on administrative cooperation and the fight against fraud In the field of VAT, information was exchanged with tax administrations in other States EU members, through the Central Liaison Office (CLO) liaison point, as well as cooperation administrative matters relating to the Eurofisc network and Multilateral Controls.

INFORMATION EXCHANGES THROUGH CLO

With regard to VAT, 955 processes were initiated in 2022, relating to the exchange of information on request with the remaining member states. Of these, 451 originated from requests for information received from other tax administrations and 504 in requests made by Portugal.

Table 34 – Exchange of information “On request” and “Spontaneous” by jurisdiction – VAT

Source: AT/IR

The main partners are Germany, Belgium, Spain, France, the Netherlands and Hungary, which together represent around 68% of the information requests received and 81% of orders shipped.

Graph 21 – Main partners in the exchange of information “On request” and “Spontaneous” – VAT

EUROFISC NETWORK

Through the Eurofisc network, information is exchanged regarding taxable persons on whom there is possibility of being involved in fraud networks. Analysis of the information received, through the various work areas of this network, resulted in the signaling of risk situations and, in relation to the most relevant cases, the unofficial change of activity (cessation in VIES) and inspection proposals sent to various Organic Units.

Following this analysis, actions were taken on the following operators/situations detected:

Table 35 – Eurofisc – Situations detected

These operators were subject to the following actions:

Table 36 – Eurofisc – Results of actions carried out

The inspection proposals prepared resulted in the opening of dispatches and service orders that resulted in additional VAT settlement amounting to EUR 3.2 million and voluntary regularizations in the amount of 488 thousand EUR.

Administrative cooperation registered a considerable increase from 2021 to 2022, with regard to either to requests for information or to spontaneous information (made by Portugal and received from other member states), related to indicted operators, as being involved in situations of fraud, as can be seen in the following table.

Table 37 – Eurofisc – Administrative Cooperation

MULTILATERAL CONTROLS

During 2022, AT participated in two Multilateral Controls (MLC) (simultaneous controls), which are ongoing, with the legal framework being Directive (EU) 2011/16, on cooperation administrative law in the field of taxation, and Regulation (EU) 904/2010, on cooperation administration and the fight against fraud in the field of VAT.

COMMUNICATION REGIME OF MECHANISMS (INTERNAL OR CROSS-BORDER) WITH TAX RELEVANCE (DAC 6)

Law No. 26/2020, of July 21, established the obligation to communicate to the Tax Authority and Customs (AT), for the purposes set out in its articles 16 and 17, of certain internal or cross-border mechanisms with fiscal relevance, transposing Directive (EU) 2018/822 of the Council (DAC 6), of May 25, 2018, and repeal Decree-Law No. 29/2008, of February 25.

Communications made in Portugal (Model 58) Within the scope of this regime, during the year 2022, they were communicated in Portugal to AT, through Model Declaration 58, 124 cross-border mechanisms, 39 internal mechanisms and 49 exemptions from Communication.

The following table presents the breakdown by type of mechanism reported (internal or cross-border) by type of declarant, noting that the majority of declarants are Taxpayers Relevant…

Graph 22 – Type of mechanisms communicated by type of declarant

With regard to the key characteristics, according to the graph presented below, it is clear The one with the highest number of occurrences is DAC 6 – B2, which refers to “a mechanism has the effect of converting income into capital, donations or other categories of income taxed more favorably, exempt from taxation or not subject to taxation”.

Graph 23 – Occurrences by key characteristic – Model 58

Communications received from Other Member States Within the scope of this regime, during the year 2022, Other States Members, 314 mechanisms originating in 14 different reporting countries. Among the countries with the followed by France and the Netherlands, with 50 and 47 mechanisms reported, respectively. highest number of mechanisms reported to Portugal, Germany stands out with 96 mechanisms,

Graph 24 – Number of mechanisms reported – Reporting countries – 2022

With regard to the key characteristics, according to the graph presented below, it is clear of Model 58, the one with the highest number of occurrences is also DAC 6 – B2, which It is clear that, similarly to what happens in relation to communications made in Portugal through refers to “a mechanism that has the effect of converting income into capital, donations or other categories of income that are more favorably taxed, exempt from taxation or not subject to taxation”.

Graph 25 – Occurrences by key characteristic – Reporting countries

Disclosure of Mechanisms

In accordance with the provisions of paragraph d) of paragraph 1 of article 17 of Law no. 26/2020, of 21 July, AT publishes information on the Finance Portal, for the purposes of preventing tax evasion, of communicated mechanisms, without identifying the respective participants and in abstract and same. In this context, until 2022, AT announced the following mechanisms on the Portal das synthetic materials, and this disclosure may include mechanisms of which AT has become aware Finances:

• Mechanism 01/2021 – Conversion of dividend payments into debt payments to partners;
• Mechanism 02/2021 – Use of donation of shares to avoid or reduce subsequent taxation of capital gains resulting from their sale;
• Mechanism 03/2021 – Distribution of profits through an advance share capital reduction increase.

4.2.4. Quality control of financial information reported in the scope of international commitments (CRS)

Controlling the quality of financial information reported by Portugal is part of the commitments international obligations assumed by the country. AT’s performance involves acting at three levels: management of the risk, education and assistance, and control.

In this context, the control carried out, including verification of lack of registration of reporting entities, notifications to correct flaws in the information reported, notifications for delivery of files in missing or with errors in structure and inspection actions, covered approximately 340 taxpayers,

Since 2020, almost two hundred news reports have been collected for punishable infractions as an administrative offence, with approximately 122 thousand EUR.

4.2.5. Prevention actions – AT collaboration with others entities

The presence of the Tax and Customs Inspection on the ground, monitoring the activity carried out by economic agents, constitutes a strong dissuasive element that induces voluntary compliance. Actions aimed at information/prevention, given their scope and visibility, are a contribution significant for this presence, representing an important component in the fight against tax and customs fraud and evasion and the parallel economy.

With the reduction of limitations resulting from the pandemic context, which conditioned the carrying out of prevention actions on the ground in recent years, it was possible to resume some initiatives at national level, carried out only by ITA within the scope of its competences or in joint actions with other entities.

Regarding prevention actions, the national action “QR Code” stands out, which took place in September 2022, with a view to verifying compliance with the inclusion of the QR Code on invoices 537 AT inspectors, around 6,750 commercial establishments were controlled and 299 and other fiscally relevant documents issued by taxpayers. Participants in this action news documents.

Within the scope of joint actions, two national actions were carried out, planned in conjunction with the AT and the National Republican Guard (GNR), the Network actions, which achieved the following results:

• “Network” action, carried out in June 2022 – involved 385 AT inspectors and 444 military personnel from GNR, with 5,723 vehicles being controlled and 769 reports being filed. Within the scope of this irregular shape, 20 liters of colored and marked diesel, 500 liters of road diesel, 336 action, an arrest was also made and 30 motor vehicles that were circulating in cans of soft drinks and 0.754g of lemon juice;
• “Network II” action, carried out in October 2022 – involved 450 AT inspectors and 599 military personnel of the GNR, with 3,900 vehicles being controlled, 603 notices filed and seized 21 motor vehicles that were circulating irregularly.

Overall, in 2022, prevention actions were launched on the ground, namely joint actions and control of goods in circulation, in collaboration with other inspection entities, safeguarding the specificities of each entity in terms of action on the ground, in a total of 81 joint actions and 77 actions to control assets in circulation, which made it possible to carry out 17,139 inspection controls. These actions were developed in collaboration with:

• GNR;
• Public Security Police (PSP); • Food and Economic Security Authority (ASAE);
• Authority for Working Conditions (ACT);
• Inspection of Regional Social Security Centers (ISS);
• Foreigners and Borders Service (SEF).

4.3. Performance in the operational scope

4.3.1. Tax inspection activity

4.3.1.1. Results of inspection actions carried out by the inspection tax

4.3.1.1.1.Number of inspection actions carried out by the tax inspection

The year 2022 was strongly marked by the challenges imposed both by the operationalization of Law no. 7/2021, which introduced changes to the development of tax inspection procedures and customs, namely, through the introduction of a new phase in the progress of the procedure, relating to the holding of the regularization meeting, or through the completion of the dematerialization of the inspection procedure and its externalization on the Finance Portal.

However, it is important to highlight the increase in the level of voluntary regularizations and the growing focus on more complex actions aimed at tax planning and the dynamization of instruments such as the exchange of international information and the derogation of banking secrecy.

Graph 26 – Control actions carried out

Table 38 – Number of shares by type

Analyzing the variation observed in terms of the type of inspection actions (2021/2022), there is a decrease of 12.3% in proof and verification actions (2,714 actions) and 23.9% in information and prevention (10,670 actions). The reduction in information and prevention actions is a result of ITA’s focus on more complex actions, with this type of actions being oriented, above all, for ITA’s action at a preventive level.

Table 39 – Number of actions per inspection program

From analysis to the number of proof and verification actions and their breakdown by program inspection, it is important to highlight that, of the total number of actions (19,384), 15,811 actions were carried out that affected on legal persons (82%) and 3,573 actions referring to natural persons (18%). In 2022, the Tax Inspection also carried out 4,353 external inspection actions (22%) aimed at people collective, representing general actions 7%.

Preventive control actions were also carried out, such as: information collection, actions VAT refunds, totaling 34,023. jointly with other public administration bodies, control of goods in circulation and analysis of 4.3.1.1.2. Value of corrections determined by tax inspection The Tax Inspection, in recent years, has been orienting its actions towards detecting situations of more complex tax evasion in the fight against fraud and the parallel economy, with a faster and closer to the tax generating event, in the sense of not only promoting the identification and correction of irregular situations, as well as increasing the perception of risk of detection by non-compliant taxpayers, aiming to increase voluntary compliance.

However, the value of corrections made to the declared values, as well as regularizations voluntary actions carried out by taxpayers during inspection procedures, continues to be one of the most easily measurable results of the Tax Inspection’s actions, whose evolution is presented in the following graph:

Graph 27 – Value of tax and customs inspection corrections

The downward trend in the value of corrections determined, within the scope of procedures inspections in recent years, is directly related to the increase in voluntary compliance in result of the increased perception of risk of detection by defaulting taxpayers and the success of strategies to promote and support voluntary compliance implemented upstream of the inspection, as these have already provided many regularizations that would normally be carried out within the scope of inspection procedures.

4.3.1.1.2.1.Corrections to the tax base

The value of the corrections determined in 2022 by the Tax Inspection partly results from the corrections of EUR 2,702 million made to the tax bases declared by taxpayers, giving a note of an increase that was accompanied by an increase in the level of voluntary regularizations carried out within the scope of the inspection procedure, as shown below.

Graph 28 – Voluntary corrections and regularizations to the taxable income

The Tax Inspection directs its activities, predominantly, towards collective taxpayers, the which is reflected in the fact that corrections at the IRC level represent around 97% of the total voluntary corrections and regularizations to the tax base and, at the IRS level, only around 3%.

Graph 29 – Voluntary corrections and regularizations to the tax base

4.3.1.1.2.2. Corrections to missing tax

In 2022, the Tax Inspection promoted voluntary corrections and regularizations to the tax in the amount of 671 million EUR, with a decrease of around 14% in relation to the values calculated in 2021.

Graph 30 – Total missing tax detected

As seen in previous years, VAT continues to represent the majority of corrections and voluntary regularizations identified by the Tax Inspectorate, at the level of the missing tax.

Graph 31 – Total missing tax detected by tax type

4.3.1.1.3. Voluntary regularizations as a result of inspection activities tax

4.3.1.1.3.1. Voluntary adjustments to the tax base

In line with the change in the ITA paradigm, based on corrective and reactive action to a more targeted approach to prevention and support for voluntary compliance, Law No. 7/2021 came introduce changes in the development of inspection actions with an impact on the level of voluntary regularizations, introducing a new phase in the inspection procedure that constitutes in holding the regularization meeting.

In this context, and as already mentioned, the increase in the weight of voluntary regularizations in the total corrections, with greater impact in terms of voluntary regularizations of the tax base.

Graph 32 – Value of voluntary regularizations to taxable income

Graph 33 – Voluntary adjustments to the tax base, by tax

4.3.1.1.3.2. Voluntary tax adjustments

In 2022, tax regularizations carried out by taxpayers within the scope of procedures inspections amounted to EUR 120 million, which represents a decrease compared to regularizations verified in 2021.

Graph 34 – Value of voluntary tax regularizations

In the analysis by tax, it appears that VAT reached a value of 64 million EUR, corresponding to 53% of the regularizations carried out, followed by IRC (30%), IRS (13%) and Other Taxes (4 %).

Graph 35 – Voluntary adjustments to tax detected in default, by type

4.3.1.2. Taxation by indirect methods

Following what has been happening in recent years, in 2022 the decrease in the number of inspection actions using indirect assessment of the taxable income IRC, reflecting the concern of the Tax Inspection, in line with the Portuguese tax system, of privileging direct assessment, assuming the use of indirect assessment to be merely residual in nature to combat fraud and tax evasion, being used only in situations strictly provided for in the legal diplomas.

Graph 36- Number of inspection actions with indirect evaluation

As a result of the actions carried out in 2022, using indirect methods, the Inspection Tax department made corrections to the IRC tax base in the amount of EUR 58 million, which represents a slight increase compared to 2021.

Graph 37 – Amount corrected by indirect assessment

The residual nature of the use of indirect methods is reflected in the amount corrected by the inspection tax through indirect assessment in 2022, which represents only 2% of total corrections carried out in terms of IRC tax base.

4.3.1.3. Lifting banking secrecy

Of the 1,640 procedures to derogate from banking secrecy initiated in the last three years, 1,085 processes (66.2%) culminated with voluntary authorization from the taxpayer or third parties and family members. At the same period, for the remaining 555 processes, under the terms of article 63-B of the LGT, the derogation from banking secrecy for the taxpayer or for third parties and family members.

In 2022, 597 administrative procedures were initiated to derogate from banking secrecy, with 204 decisions to lift confidentiality and 388 processes through voluntary authorization were concluded, according to the following table. There is an increase in the use of this important mechanism for determination of the real contributory capacity of taxpayers.

Table 40 – Derogation from banking secrecy – 2020 – 2022

4.3.1.4. Other instruments to combat fraud and tax evasion In highly complex fraud situations, the Tax Inspection resorted, in 2022, to the use of different instruments:

Table 41 – Other instruments to combat highly complex fraud

4.3.1.5. Control of VAT refunds

Taxable persons who, within the scope of their activity, are in a tax credit situation, When the conditions set out in law are met, they can make requests for VAT refunds. The credit tax may result, for example, from investments, exports, transfers intra-community goods, the provision of intra-community services, as well as the carrying out of operations subject to reversal by the taxpayer, also called internal “reverse charge”.

Given the high number of requests, which present different levels of risk underlying their analysis and concession, as the reason behind it is not always easily discernible, for a more efficient management of Tax Inspection resources, management mechanisms are implemented and control. In addition to the validations implemented at the submission level, there is also a System of Risk Indicators, from which refund requests to be inspected and priorities and the level of intervention of the Tax Inspection are defined.

In addition to the control and selection system for refund requests under the General VAT Regime, There are also other similar control systems for VAT refund requests from Religious Entities and IPSS and for refund requests from taxpayers from other States Members (MS) not established in national territory.

Controlling refund requests under the general VAT regime is what requires greater action on the part of the ITA, as it is, of the three regimes, the most relevant in terms of the number of requests and overall value of refunds.

PROCEDURES FOR CONTROLLING AND MANAGING REQUESTS FOR REFUNDS FROM THE SCHEME NORMAL

Reimbursement requests, which are made through the electronic submission of the periodic declaration of VAT, after the central validation process, are automatically submitted to a Risk Matrix which, according to a set of risk criteria, selects the orders to be controlled with the intervention by the Tax Inspectorate.

In view of the evolution of economic activity, with an impact on the number of requests and the identification of new risk factors in the monitoring carried out to the implemented control system, are carried out adjustments to the Risk Matrix, particularly in terms of risk criteria parameters, in order to improving the efficiency of inspection activities in controlling the granting of VAT refunds.

The flexibility and maturity of the implemented control system, with validations at the time of submission and defined risk indicators, has been playing a very relevant role for allow efficient management of ITA’s human resources in the face of the significant increase in requests carried out by taxpayers, which has occurred in recent years.

REFUNDS REQUESTED

The growth trend in reimbursement requests continued in 2022 at the value level, but, mainly in terms of the number of requests, and from 2021 to 2022 there was an increase 38.9%:

Table 42 – Reimbursement requests – normal regime – 2021-2022

REFUNDS ANALYZED BY THE TAX INSPECTION

In 2022, the Tax Inspection maintained the control system implemented for refunds of VAT, with selection for inspection of around 6% of the requests submitted, which allowed analysis by ITA of more than 30% of the total amount requested.

Table 43 – Requests analyzed by the Tax Inspection – normal regime

(Percentage of the quantity and value of requests analyzed, compared to the requests submitted, net of those automatically rejected)

To control refund requests from all regimes (Normal Regime, Religious Entities and IPSS and Other Member States), in 2022, 11,155 inspection procedures were completed, in within the scope of which missing tax amounting to EUR 49.86 million was found (of which EUR 26.36 million of EUR of corrections and EUR 23.50 million of voluntary regularizations).

Of the amounts referred to in the previous paragraph, considering only reimbursements under the Normal Regime of VAT, in 2022, 9,114 inspection actions were completed, with missing tax amounting to EUR 47.83 million (with EUR 25.43 million of corrections and EUR 22.40 million of voluntary regularizations).

REFUNDS PAID

Regarding the value of reimbursements paid in the years 2020 to 2022, the following evolution was recorded:

Table 44 – Refunds paid – normal regime

Despite there being consistency in the evolution of the value of reimbursements requested and paid throughout of recent years, a direct comparison of these values in the same year cannot be made, due to to the time lag between the declaratory periods to which the requests relate, the moment of their submission and the moment of payment thereof, which may imply that the payment of a claim relating to a calendar year is made in a subsequent year.

4.3.1.6. Crossing with third party obligations

The Tax and Customs Inspection, in order to perform its functions more efficiently, uses to the different sources of information available to define risk criteria to identify subjects liabilities in possible situations of default. The ancillary obligations of third parties assume a relevant role as a source of information, whether to identify inconsistencies through cross-referencing with the values declared by taxpayers, or as additional information for case-by-case analysis in the scope of inspection procedures.

In this sense, AT monitors the delivery of these obligations and analyzes and treats of your information for planning ITA’s operations. Briefly, we present some of the activities developed by ITA in 2022 in relation to the following declarative obligations:

MODEL 38

The LGT, in paragraphs 2 and 7 of article 63-A, establishes that credit institutions, financial companies and other entities that provide payment services must report to AT, through the declaration Model 38 – Declaration of Cross-Border Transactions, transfers exceeding 12,500 EUR per beneficiary, individual or fractional operations, for all jurisdictions listed in Annex III of the Banco de Portugal Notice No. 8/2016.

The Tax and Customs Authority, in compliance with the provisions of Ordinance no. 256/2017, of 14 August, in June 2022 updated, on the Finance Portal, the statistical information relating to transfers and sending of funds, as referred to in paragraph 3 of article 63-A of the LGT, which is summarized in following table::

Table 45: Transfers and sending of funds – Model 38

The declarations submitted in 2022, relating to operations carried out in 2021, reflect a relative stability, which has been observed over the last three years. ITA has regularly used the information provided by this statement in identification of risky taxpayers, based on the transfers they made and the framework in relation to the activity developed, which resulted in 2022 carrying out 139 inspection procedures, with voluntary corrections and regularizations of 7.5 million EUR of matter tax and EUR 2.7 million in tax.

Following inspection procedures carried out over the last few years, based on information from Model 38, which resulted in corrections in this regard, it was found that, in 2022:

ÿ 11 litigation processes were initiated, with a global contested amount of 4 million of EUR;

ÿ 4 decisions were handed down, all in favor of the State. The overall unfavorable value for taxpayers was EUR 1.1 million;

ÿ Following inspection actions concluded in 2022 to control the Model’s information 38, it did not result in the initiation of any investigation into the commission of the crime of fraud Supervisor.

MODEL 40

The LGT also establishes, in paragraph 4 of article 63-A, the obligation of credit institutions, financial companies and other entities that provide payment services, declare the amount of payment flows with credit and debit cards or other means of payment electronic form, carried out through you, embodied in the declaration Model 40 – Value of Payment Flows.

The information reported in this statement, which is disaggregated by payment method, in addition to payments made with cards, whether at Automatic Payment Terminals, Multibanco or immediate transfers, also includes operations carried out with other means of payment, such as for example, those made with «ATM References», have been used by the Inspection Tax with the aim of identifying taxpayers at risk of tax non-compliance, by cross-check with the values declared in the IES, in the Periodic VAT Declaration and in the e-Fatura system.

As a result of the analysis of the data declared in Model 40, 587 inspection actions were completed in 2022, with voluntary corrections or regularizations totaling EUR 12.6 million having been determined of tax base and 2.3 million EUR of tax.

4.3.1.7. Certification of invoicing computer programs

Portugal was the first country to implement SAF-T47(PT), in 2008, following a recommendation from the OECD. With this adoption, it became possible for the Tax and Customs Inspection to have access to a Structured and standardized file for accounting and invoicing application records. This one file was central to the implementation of certification, which is a process of holding producers for the functionalities of the programs, initiated with the submission of a Model declaration 24, with the commitment to comply with legal requirements, as a measure to combat fraud and tax evasion practiced using the manipulation of records of invoices issued.

In 2022, AT, in addition to continuing to assist in the implementation and verification of legal requirements applicable for the issuance of the respective certificates, also provided support for compliance in implementation of requirements relating to the QR Code and ATCUD, identifying errors and supporting their resolution, extending this support to previously certified programs, in order to allow implementation of the corresponding associated measures, namely, the communication of billing documents by purchasers by scanning the QR Code.

Improving the quality of information produced and made available by billing programs resulting from the implementation of the certification process, both at the level of the SAF-T (PT) file which, initially, it was created with the aim of being a standard audit file, to be used in scope of inspection procedures, such as with the implementation of ATCUD and QR Code, has been take on a very important role as a facilitator of AT’s implementation of other security measures support for billing compliance and control.

At the end of 2022, 2,979 billing programs had already been certified by AT.

4.3.1.8. AT Validation Seal (SVAT)

The SAF-T file, which was developed with the aim of facilitating audits in an electronic environment within the scope of the Tax and Customs Inspection, it contains two distinct components, relating billing and accounting. The billing component, whose information quality benefited from validations implemented within the scope of the certification process for billing programs, demonstrated a broader usefulness than initially anticipated, by allowing the implementation of the e-Fatura system and the Code QR.

The SAF-T file with accounting information, which must be generated by accounting applications accounting, in order to make information regarding accounting records available, in view of the flexibility of accounting standards, only allowed a case-by-case analysis of information. For To overcome this limitation, in 2016, taxonomies were introduced into the SAF-T file, with the aim of allow a systematic analysis of the information produced.

Given the experience gained with improving the quality of billing information with the certification, it proved necessary to implement a similar process, making available to producers of accounting programs that request it, a voluntary compliance support service that does not being mandatory, neither for producers nor for users of accounting programs, aims to advise and support the implementation of procedures that result in the creation and export of SAF-T audit files with the desired quality in your accounting component.

In this sense, following the creation of the AT Validation Seal (SVAT) by Ordinance No. 293/2017, of October 2nd, AT started to provide a support and validation service for the attribution of SVAT to a accounting program, which is valid for two years and is renewable at the request of the respective producer.

At the end of 2022, 80 SVAT requests were submitted, relating to 59 different requests and 21 renewal/replacement requests, with SVAT being awarded to 14 accounting programs.

4.3.1.9. Reports

The analysis of complaints or reports regarding possible tax infractions proves to be a important source of information for determining the tax situation of taxpayers and an important monitor of fraud trends. During 2022, around 4,618 complaints were received by the tax anti-fraud unit and participations of which 2,502 came from other public entities and 2,116 from public entities external including private individuals.

Among the facts that are the subject of the complaints analyzed in 2022, situations related to with the omission of income (48%) and irregularities relating to leasing and provision of accommodation services (5%).

4.3.1.10.Forensic Audit

The Forensic Informatics Center (NuIF)’s mission is to support the AT in the collection and availability in an appropriate format of “DIGITAL EVIDENCE”, especially within the scope of Criminal Investigation tasks of this Authority.

NuIF’s basic activity consists of collecting digital evidence, intended to support investigations. Judicial proceedings initiated on suspicion of committing tax and customs crimes, and in support of various Inspection teams, especially in the collection and processing of evidence. During the year 2022, 2,365 requests within the scope of Forensic IT (of which 302 concerned “Evidence Collection”, commonly known as “judicial searches”), which corresponded to a total of 3,568 actions, at the request/support of following entities:

Table 46 – Forensic Computing Center – Number of actions per request

Taking into account the type and scope of interventions, we must divide them as follows:

Table 47 – Forensic Computing Center – Type and scope of interventions

“Expert Analysis” refers to the treatment given to the equipment or information that was seized. “Technical Support” refers to the support that NuIF provides to users, in the most diverse aspects, ranging from equipment configuration, to support in the use of tools that that entity develops. Also included in this area is the internal development of tools to support management and forensic activity to support users.

“Evidence Collection”, the most visible activity of NuIF, concerns search actions carried out with based on court orders, which allowed not only the selective collection of information, but also the seizure of multiple storage devices, which are subject to analysis and subsequent processing.

This vast and multifaceted set of judicial searches resulted in the seizure of 668 devices electronic devices, containing digital information, which as a whole represented a volume of information around 69.43 TeraBytes, whose treatment was assured. Here is its distribution:

Table 48 – Forensic Computing Center – Equipment seized in judicial searches

4.3.1.11.Other control actions

In 2022, following the National Teams prepared at central level with the collaboration of operational Organic Units, 2,800 procedures were carried out by the Tax Inspection inspections, resulting in voluntary corrections or regularizations of EUR 168.8 million tax base and 34.3 million euros in tax, which were essentially applied to the following areas of expertise:

• Control of taxpayers who cumulatively present more than three criteria of risk in a given period;
• Control of taxable persons who carried out cross-border transfers listed in the Model 38;
• Control of taxpayers who transferred properties;
• Control of collective taxpayers whose corporate bodies presented reduced income;
• Control of taxpayers with payment flows using debit and credit cards (Model 40);
• Control of taxpayers reporting VAT without requesting a refund;
• Control of VAT deductions and margins;
• Control of taxpayers receiving high-value allowances;
• Control of initial and final inventories declared at the IES;
• Control of taxpayers who requested several VAT refunds without inspection procedure;
• Declarative control of taxpayers who benefited from the incentive system for investment and business development – SIFIDE (R&D);
• Control of taxpayers who present declarative divergences in IR;
• Control of taxpayers with impairment losses;
• Control of taxpayers with Goodwill amortization;
• Control of taxpayers with asset variations.

4.3.2. Customs inspection activity

4.3.2.1. Intervention in the prevention of fraud and customs and tax evasion

Within the scope of preventing fraud and customs and tax evasion, the Customs Anti-Fraud Area of AT promotes, in particular, the following activities:

COLLECTION, PROCESSING AND DISSEMINATION OF INFORMATION

Risk management in terms of cross-border movement of goods requires authorities to EU customs authorities, the ability to identify and assess the wide range of threats and risks associated goods, their circulation and means of transport.

In order to differentiate risk levels and determine whether goods will be subject to controls specific customs procedures, AT collects, processes and disseminates information from sources open or reserved and also in cooperation with relevant entities, constituting this process, essential tool of a preventive nature and thus contributing to feeding the System Automatic Selection System (SSA) and the Integrated Anti-Fraud Customs Information System (SIIAF). With In this process, more intelligent controls are carried out, contributing to maintaining a balanced balance between control and facilitation of legitimate trade.

In addition to controlling the external border, it also aims to provide greater quality in the selection and promotion of actions, within the scope of carrying out inspection actions or other operational nature, to be carried out by the various AT organic units, in the customs area, special taxes on consumption, internal security or preventing and combating trafficking illicit goods prohibited, or subject to restrictions in relation to their circulation.

In 2022, AT’s Customs Anti-Fraud Area prepared and disseminated 1,749 risk information products (PIR), distributed across several risk areas, as summarized in the table below, with the they assume characteristics of:

• Information of a reactive nature, prepared for action; or
• Information of a preventive and proactive nature, associated with risk analysis measures implemented in SSA.

With these information supports, customs’ capabilities in matters of knowledge, risk levels are distinguished and controls are prioritized, managing available resources and directing control efforts towards higher risk situations.

Table 49 – Information products by risk areas

The considerable expression of risk areas associated with prohibitions and restrictions, illicit trafficking and evasion of customs procedures reflects, in a significant way, those that were the priorities of a year profoundly marked by war, which led to the implementation of an extensive package of restrictive measures, but also a new slowdown in the economies and consequent impact on the international trade in goods.

These events meant that criminals and other fraud actors had to adapt and look for new types of goods, while at the same time having to continue supplying European customers of certain illicit goods associated with addictions, with inelastic demand and which required maintaining the level of supply.

The analysis of this phenomenon gave rise to a great deal of activity in AT, with the aim of anticipating new fraud methodologies, maintaining a high level of control, harmonized and equivalent throughout of the entire external border, this effort having been guided and guaranteed by the implementation of measures intelligent risk analysis and assessment.

In this context of proactivity, a total of 1,749 PIRs were prepared, which results in a higher average to four events per day, which after internal treatment, and which were directly reflected in the performance of the first-line customs offices – customs – responsible for customs control of the cross-border movement of goods. Overall:

• 1,204 were translated into SSA measures, supporting the automatic selection of declarations customs, highlighting 169 of these that gave rise to risk profiles;
• 545 configured operational information aimed at carrying out control actions specific a posteriori, inspection of companies and preventive actions.

With regard to the supervisory role of the national aspect of the Union’s international trade, the special emphasis on the work of monitoring customs operations relating to goods subject to special measures, within the scope of the Union’s common commercial policy, namely taxation in matters of anti-dumping duties or countervailing duties, the application of restrictive measures and ensuring product conformity.

On the other hand, preventing possible under-invoicing practices associated with imports, the reinforced control, with the maintenance of the set of complementary measures, at the level of analysis of automatic risk that contribute to an increasingly risk-oriented selection of the transaction, in order to obtain the appropriate balance between control and facilitation.

RISK MANAGEMENT, IN TERMS OF SAFETY AND PROTECTION

EU customs authorities must, in accordance with the UCC, take measures to ensure the integrity of the supply chain with regard to goods crossing the EU border. Union and thus ensure the security of the Union and its inhabitants. To fulfill this responsibility, AT maintains fully operational, in 24 hours a day, seven days a week mode, the National Center for Risk Analysis, carrying out a systematic risk analysis in terms of safety and security, thus contributing to make Europe an increasingly safer place. Risk assessment applies to all goods that enter or are removed from the customs territory of the Union, through a national port or airport or even, in situations where they simply remain on board the means of transport. AT carries out an air safety risk analysis on all goods transported by air, namely by express mail and by post, in advance loading these goods onto the transport aircraft to the Union, preventing incidents in the scope of aviation that could result in loss of human life.

The practical implementation of the declarative obligation for all postal packages, preventing transport of potentially dangerous goods on board an aircraft, combined with the increase in movement stimulated by digital commerce, led to them being delivered and subsequently analyzed the risk of around four million statements.

Table 50 – Risk analysis in terms of safety and security

4.3.2.2. Intervention in detecting compliance and repressing fraud and customs and tax evasion

NATIONAL AND INTERNATIONAL OPERATIONS

In the context of combating fraud, carrying out operations carried out in concert with other police forces and community and international entities, seeking to reinforce collaboration between the various national authorities, as well as the creation of synergies and strengthening collaboration with supranational authorities.

In this type of actions, those carried out under the auspices of the EC (OLAF) and EUROPOL stand out – in this case based on several EMPACT projects, from OMA and INTERPOL, whose development, in situations specific activities, also occurs in conjunction with FRONTEX, within the scope of their respective competencies. These operations have an effect on strengthening intervention capabilities at the Union’s external border European Union and the national customs territory, for tax, economic, environmental and health protection purposes. society, in terms of safety and security.

Therefore, within the scope of its duties and competencies in the customs area, in most situations in the As national coordinating entity, AT participated in the planning and execution of 18 international operations. These actions focused on very diverse subjects, based on risk and crime trend analysis that is permanently updated. An example of this adaptation was the fact that in 2022, the activity related to the risks associated with pandemic has ceased to have expression.

In 2022, the main areas covered were those that focused on products that violate human rights of Intellectual Property (counterfeiting, forgery, non-conforming products), with special emphasis on products whose use or consumption was associated with a very high risk, in terms of concerns its users at European level. In this context, it is worth highlighting the operations that affected on counterfeit food products, pesticides (plant protection products) and toys (especially vulnerable consumers – children), all EMPACT priority operations, organized by Europol, and with very long time spans.

Still within the scope of actions with an emphasis on Intellectual Property Rights, it is worth highlighting the several international operations on counterfeit medicines, including in some cases, also, doping substances, under the aegis of various entities, such as EUROPOL, INTERPOL and the WCO.

Another area that is becoming increasingly important is the fight against environmental crime, which presents several aspects. One of the main ones and on which several operational activities were carried out in the within the IMPEL network (integrating a large network of national authorities, of which AT is part), focusing on the transboundary movement of waste (in particular paper, plastic, of electronic material, and also about gases that are harmful to the ozone layer or gases that enhance the effect greenhouse), with a view to its treatment and reuse, constituting one of the great concerns at a global level.

Other aspects that constitute operational activities aimed at combating trafficking that threatens fauna and flora and the protection of species (CITES Convention), especially various activities operational in the protection of autochthonous species, such as the eel (glass eels), but also trafficking in protected species of wood or wildlife.

In addition to these, international operations focused on illicit trafficking were also carried out, such as such as drugs, undeclared money movements, associated with money laundering and financing of illicit activities and terrorism, as well as the trafficking of firearms and ammunition, especially relevant in light of the conflict taking place in Ukraine.

Finally, it is worth highlighting the carrying out of national operations in specific risk areas, identified at AT level, such as the control of imports of chemical products and chemical precursors new psychoactive substances.

4.3.3. Settlements resulting from the actions of the Tax Inspection and Customs

4.3.3.1. Tax Area

As already mentioned, due to the changes introduced by Law No. 7/2021, regularizations voluntary actions carried out by taxpayers within the scope of inspection procedures, became part of a new phase of the inspection procedure, with the moment and conditions in which that regularizations can be carried out.

In this sense, the value of the collection notes issued for each type of tax became also contemplate the value of voluntary regularizations carried out within the scope of the procedure of the proposed corrections, the number of billing notes originating from the ITA increased, as, inspection. Considering that voluntary regularizations may be of full or partial value in view of for the same correction, a billing note representing the regularization may be issued voluntary partial acceptance by the taxpayer and a billing note representing the part of the correction not accepted by the taxpayer

IRC – COLLECTION NOTES ISSUED

In 2022, 2,724 collection notes were issued with a global value of EUR 292 million, originating in corrections made by the Tax Inspectorate.

Having carried out a historical analysis, it appears that the number of IRC collection notes issued in 2022, showed an increase compared to the corresponding year 2021 (1,001 more collection notes issued), billing notes, since, as previously mentioned, the increase in billing notes approximately, an increase of 58%, without this having translated into an increase in the value of results from the implementation of Law No. 7/2021.

Graph 38 – IRC – Value of billing notes issued

The value of IRC collection notes issued in 2022 amounted to EUR 292 million, which, given compared to the same period in 2021, it represents a decrease of 5% (15 million EUR).

IRS – COLLECTION NOTES ISSUED

Based on inspection actions carried out on natural persons, in 2022 1,704 notes were issued collections, representing EUR 105 million. In 2021, the number of collection notes issued amounted to 1,156, which demonstrates the existence of an increase in the number of settlements issued, approximately 47%, thus following the evolution observed for other taxes, as a result of changes introduced in the procedure inspection by Law No. 7/2021.

However, with regard to the value of these settlements, there is, compared to 2021, a slight decrease of around EUR 4 million (4%), in line with the trend that has been observed in recent years, given AT’s strategy of supporting voluntary compliance, through different instruments upstream of the ITA, such as issuing alerts and divergences.

Graph 39 – IRS – Value of billing notes issued

VAT – COLLECTION NOTES ISSUED

In 2022, 15,486 collection notes were issued (around 25% more than in the previous year) with based on corrections made by the Tax Inspection, which resulted in missing tax in the amount of EUR 456 million.

In addition to the increase in the number of billing notes issued, in line with what happened for other taxes, resulting from the changes introduced in the inspection procedure by Law No. 7/2021, It is important to highlight that the increase in the value of VAT collection notes is influenced by corrections made in previous years, whose current accounts were updated only in the year 2022.

Graph 40: VAT – Value of billing notes issued

4.3.3.2. Customs Area

ADDITIONAL SETTLEMENTS (IEC, CUSTOMS DUTIES AND OTHERS)

In the year 2022, it was proposed for collection as part of an inspection procedure, according to the group tax, the values shown in the following table.

Table 51 – Amounts proposed for collection in the customs inspection process

4.3.4.Large Contributors

In 2021, by Ordinance No. 318/2021, of December 24, which revoked Ordinance No. 130/2016, of 10 December May, UGC monitoring was extended to entities that celebrate and maintain in force APPT, to entities, resident or with a permanent establishment, in Portuguese territory, which are part of a multinational group subject to the submission of a financial and tax information declaration by country or by tax jurisdiction (CbCR), and also to non-resident entities without a permanent establishment (NRsEE) that carry out an economic activity in the national territory subject to the supervision of the Bank of Portugal.

In addition to these entities, the UGC continues to monitor the tax situation of banks, entities with a global value of taxes paid exceeding EUR 20 million per year and collective investment entities under the supervision of the Securities Market Commission (CMVM).

In the case of individual taxpayers, people with income greater than 750 thousand EUR per year or assets exceeding five million EUR (directly or indirectly, in assets and rights).

UGC also accompanies people with manifestations of fortune congruent with these income and assets, and people (or companies) that, even if they do not comply with those criteria, may be considered relevant because they have a legal or economic relationship with other large contributors.

Additionally, with the aim of consolidating and providing stability to the lists of taxpayers accompanied by the UGC, also recommended due to the powers of the local peripheral body granted to it by Law no. 100/2017, of August 28, the rules of validity were changed registration, maintaining the four years previously set, but providing for the automatic extension of this period, whenever there are no reasons justifying its review.

Table 52 – Summary Table Registration of Large Taxpayers (CGC)

TAX REVENUE OF LARGE TAXPAYERS

The tax revenue (not including municipal taxes) of taxpayers monitored by the UGC was, in the year 2022, of around EUR 23 billion, representing approximately 44% of the total budget execution..

RESULTS OF INSPECTIVE ACTIVITY

Inspection, through its own procedures, seeks to ensure coverage of risks, which are not can be carried out within the scope of designated compliance programs, allowing the reduction of risk of tax compliance to appropriately low levels. During 2022, 253 inspection procedures, of general or partial scope, were completed. to taxpayers monitored by the UGC. Additionally, other procedures were performed highlighting the procedures for controlling VAT refunds (increase of more than 30% in VAT refunds selected for analysis, compared to 2021), people control procedures individuals with high asset capacity, including the control resulting from obtaining information obtained through other tax administrations, the procedures inherent to the APPT program and the PAR program , and the procedures for identifying and controlling reporting financial institutions (DAC2/CRS).

Following the procedures carried out by the UGC inspection area, corrections amounting to around EUR 700 million of potentially missing tax. Das corrections made, including voluntary regularizations, highlighting those made under IRC (around 52%) and VAT (around 43%), followed by Stamp Duty and IRS.

Considering the relevance, as a legal instrument to combat fraud and tax evasion, it is important Please note that, during 2022, corrections were designed and/or implemented under:

• The capital loss exclusion regime with the transfer of equity instruments of entities subject to a clearly more favorable tax regime: projected corrections to the result taxable amount of around EUR 90 million;
• From the general anti-abuse clause (article 38 of the General Tax Law): corrections to the taxable profit of around EUR 25 million;
• The transfer pricing regime (article 63 of the IRC Code): corrections projected to the taxable profit of approximately EUR 20 million;
• The improper use of the benefits of Council Directive no. 2003/49/EC, of June 3, 2003, and/or the Conventions for the Avoidance of Double Taxation. In this context, due to improper application to taxable persons who are not the effective beneficiaries of the income, and by application to income obtained that does not conform to those that would result from the application of the principle of full competition, tax corrections were made that amount to values greater than 13 million EUR;
• The income imputation regime of non-resident entities subject to a tax regime privileged: corrections of around EUR 2 million.

Additionally, it is important to note that the UGC, during 2022, allocated several tax inspectors to criminal investigation carried out within the scope of investigation processes involving several subjects procedures that form part of the register of large taxpayers

4.3.5. Highly complex tax fraud

Combating fraud and tax and customs evasion is undoubtedly one of the fundamental strategic objectives of any tax administration, whether for economic reasons, since fraud seriously compromises the sustainability provided by public resources, as well as the stability of economic systems, but above all, for ethical reasons, since the effectiveness of this The fight has a direct relationship with the application of the principle of equity and tax justice.

In this context, it is necessary for ITA to guide its actions in order to quickly identify and detect, the new fraudulent trends boosted by the globalization of the economy and new models of business, as well as the practice of illicit operations and abusive tax planning schemes, further intensifying its operations in areas of high complexity and in combating the economy parallel.

Therefore, bearing in mind the current context of globalization of the economy that has been boosted, whether through digital platforms or through the mobility of citizens and capital, it becomes decisive the use of new technologies, as well as the access and use of new sources of information, namely, that resulting from the exchange of information and cooperation with other tax administrations, thus ensuring more effective and timely management of available information, which leads to a faster identification of fraudulent taxpayers and those acting outside the system.

In the context of preventing and combating fraud and tax evasion, ITA continued, in 2022, the following priority areas of action:

• Preparation of studies on sectors/situations identified as having a high risk of fraud, with the aim of defining and adopting global strategies;
• Carrying out targeted actions, within the scope of administrative investigations, aimed at proof, with taxpayers, of signs of fraud;
• Criminal investigation, whether of crimes detected within the scope of administrative investigations, or other tax crimes, especially those of high complexity.

STUDIES ON SECTORS WITH HIGH RISK OF FRAUD

(i) Analysis of taxpayers with VAT refund requests

VAT refunds are often the most visible face of fraud schemes that aim to lead the tax administration to carry out undue asset attributions and constitute the most serious harm to the State, insofar as tax is returned, which was not delivered to the coffers of the State.

With the aim of preventing undue VAT refunds from being obtained, a set of indicators considered to be risk and an analysis was carried out which allowed us to conclude that there were irregular or alert situations related to taxpayers benefiting from reimbursement of VAT and with its suppliers, or with their suppliers.

(ii) The exchange of automatic information – its usefulness in identifying taxpayers with associated fraud risk

The basis of the analysis was the information received as part of the automatic exchange between the authorities taxes, under DAC 1 and 2, FATCA and CRS, which includes data on income obtained, or assets held abroad by taxpayers resident in Portugal, combined with the data available in the AT system.

At the same time, criteria considered relevant were determined, in the definition of which it was given special focus on those related to the analysis of assets held abroad, namely, income obtained abroad and increases in the total balance of your bank accounts held there, apparently not justified by the income and realized amounts declared in IRS Model 3, and in this way proceed to identify and prioritize actions based on the predictable level of risk associated with each of the taxpayers.

(iii) Analysis of taxpayers terminated in VIES in 2020 and 2021

The essential objective of this study was to verify whether taxpayers terminated officially for the purposes of VIES, in the years 2020 and 2021, within the scope of the option provided for in paragraph 6 of article 35 of CIVA, continued to exercise their activity and whether there were signs that, through a reconversion of their modus operandi, they could have continued to be involved in fraud schemes, namely internal.

The analysis carried out revealed that only a small percentage, around 2.8% of the universe of taxpayers officially terminated for the purposes of VIES, in the years 2020 and 2021, showed evidence of their involvement in internal fraud schemes, namely through issuance of false invoices, suspected of not representing real transactions.

It is therefore concluded that unofficial termination for the purposes of VIES is a relevant mechanism in combating fraud, since the targeted taxpayers immediately end their commercial activity or they do so after a few months, which means it is an instrument that should be used within the scope of Tax Inspection.

ADMINISTRATIVE INVESTIGATION PROCESSES

The tax anti-fraud unit concluded 62 administrative investigation processes of two of which correspond to schemes with signs of fraud, and involved the following values:

Table 53 – Administrative Investigation Processes

Of the situations mentioned above, the following stand out:

PARALLEL ECONOMY AND FAKE INVOICE

In this category, 23 investigations are identified in the tax anti-fraud unit, in relation to which there were suspicions that its participants could be operating in schemes of omission of income to avoid real taxation of your activity or in invoicing usage schemes false.

The analyzes carried out originated in situations related to:

• The use of false invoices;
• Operators in the automotive commerce and e-commerce sector, with signs of omission of income;
• Other operations, indicative of undeclared income.

Among the processes included here, a scheme apparently related to the use of “false invoices”, the amounts involved amounting to 7,655,364 EUR, taxable amount of IRC and 2,031,788 EUR of VAT.

SPECIAL ACTIONS

“Abusive use of other jurisdictions”

Continued monitoring of abusive use of other jurisdictions by subjects national liabilities, with the aim of reducing tax payments in the national territory.

Two cases stand out, in which the jurisdiction used was Malta:

ÿ In one case (already mentioned above), the taxpayer was an individual with the status of RNH in Portugal, which used the artificial relocation of income generated in national territory to a Maltese company, which subsequently distributed them to the taxpayer, in the form of dividends. However, as the taxpayer resides in Portugal, they are subject to the total exemption method, thus enjoying zero taxation, contrary to what would happen if such dividends were distributed directly by Portuguese society, in that they would be subject to taxation at a rate of 28%;

ÿ In the other case, it was a collective taxpayer who introduced a Maltese company, with which it had special relationships, in the billing circuit, between its main supplier and the national company, in order to inflate the latter’s “costs” and thus reduce its results and the corresponding taxes payable in the national territory.

“Electronic platforms”

The monitoring of new business models continued, with the main focus in those that are part of the so-called collaborative economy, where the acquisition, supply or Sharing access to goods and services is generally facilitated by an online platform, through the resort to the use of apps and websites.

The objective is to understand in general, but taking into account the specificities of each specific case, the how this type of business operates, who its stakeholders are and how they remunerate themselves, in order to identify possible risks associated with this type of model business that may result in the lack of income taxation or the lack of VAT settlement.

The actions carried out resulted in voluntary regularizations, summarized in the table below:

Table 54 – Miscellaneous investigations / Special actions

“Work-dependent income – Concealment strategies”

Two situations were identified that were used to disguise the obtaining of true income from the dependent work, as they allow for more beneficial taxation, in terms of IRS, for the employee, and in terms of social security for both (employee and employer), and which is substantiate:

• In the use of an incentive payment system for dependent workers, through of gift cards or vouchers, marketed by a group of companies that sell them to employers of those for the provision of services, and who declares the income paid to workers as bonuses not awarded by the employer (tips).
• Constitution of a company to provide individual services, with the aim of the subject These amounts are only subject to taxation at a rate of 10%, regardless of the value; passive provider of the service, in this case the managing partner of the company, obtain benefits at the level of taxation, to the extent that the income generated by the company in the years 2019 to 2021, arising from services rendered by the managing partner, in the total amount of more of 450 thousand EUR, having stopped being taxed in terms of IRS and on the other hand having been allowed to deduction of expenses, under IRC, that would otherwise not be deductible and that appear be of a personal nature, but which consume almost all of society’s income, and which thus constitute a hidden remuneration of the managing partner providing the services.

Table 55 – Global results of the actions carried out

4.3.1. AREA OF RELATIONSHIP WITH THE TAXPAYER

TAXPAYER RIGHTS: DEFENSE

Taxpayers can direct their complaints regarding tax and customs procedures to AT in which they were or are involved. The use of this mechanism makes it possible not only to promote appropriate solutions to resolve the reported constraints, as well as clarifying the tax situation, the correction of acts carried out by the AT, or the means provided for by law, to provide compliance with tax or customs obligations, or to exercise defense rights.

The results obtained in 2022 allowed us to conclude that taxpayers intensively use and growing, the specific communication channel “AT complaint”.

Graph 41: Complaints – Annual evolution

The perception that citizens have of their rights, along with the dissemination of the service (which is believed to occur mainly through the sharing of opinions), certainly contributed to the significant increase in number of interactions that reached AT in 2022 – 19,804 – and the number of complaint processes opened – 5,345 (an increase of more than 100% compared to 2021).

Table 56: Evolution rate of complaints filed

Complaints filed in 2022 can be analyzed by AT’s areas of activity.

Graph 42: Complaints by areas of activity – 2022

Regarding the assessment of complaints made by taxpayers, it was found that 60% of the responses were of a purely informative nature. Regarding other requests, 22% received a response favorable to the taxpayer (3% of these, partially favorable), and in 10% it was concluded that the taxpayer there was no reason. The remaining 8% refer to requests that did not present sufficient assumptions for consideration and/or identical requests sent to more than one entity, resulting in duplication of processes.

Graph 43: Complaints – Assessment of complaints

4.3.2.Tax Justice17

4.3.2.1. Administrative litigation

Taxpayers may, under legal terms, react before the Tax Administration against acts of who are recipients, having for this purpose a set of means of defense that do not require essential formalities, as well as the payment of costs.

The Tax Administrative Litigation System (SICAT) is the computer application that supports the processing of administrative litigation processes, which includes the procedures for graceful complaints and hierarchical resources analyzed in the report.

The annual evolution in the field of graceful complaints, regarding the establishment, extinction and rate of achievement, can be seen in the following graph:

17 It is important to note that the information from RCFEFA 2022 regarding the area of Tax Justice is not comparable with reports from previous years, as the respective data reflects the understanding and capacity that AT currently has in producing more careful and assertive management information on the matters covered here. Therefore, data from previous years were replaced, so that they remain comparable to the adjustments introduced this year in the indicators analyzed.

Graph 44: Graceful complaints – Annual evolution

It appears that the achievement levels recorded in the periods under analysis are around 100%. Compared to 2021, the 2022 period records an increase in both the number of complaints filed in the order of 15% (+8,278), or of the number of dismissed complaints of 19% (+9,963), presenting a completion rate of 102%, three pp higher than the previous year of 99%.

The initiation and termination of graceful complaints processes verified in 2022 may be analyzed by origin of the acts litigated in the following graph It appears that the achievement levels in 2020 and 2021 are slightly below 100%, the contrary to previous periods, indicating an accumulation of the balance of complaints in recent two years under analysis.

Compared to 2020, the 2021 period records an increase in both the number of complaints filed in the order of 12% (+5,676), or of the number of dismissed complaints, 13% (+6,176), showing a greater volume of services entered and performed by the Tax Authority.

The establishment and termination of graceful complaints processes verified in 2021 may be analyzed by origin of the acts litigated in the following graph.

Graph 45 – Complaints granted in 2022, by origin of litigated acts

From the analysis of the graph, litigation originating in the area of tax management of property taxes (IUC, IMT, IS and IMI) stands out, with higher levels of filing representing 38% (23,671) of the total of graceful complaints, highlighting litigation of the IUC with a weight of 20% (12,555) of the establishments and presenting a completion rate of 104%. With regard to taxes, it is worth highlighting the contested acts originating from IRS assessments, which represent 33% (20,534) of the total of graceful claims filed, with a realization rate of 100%.

At the end of 2022, graceful complaints present a balance of 10,091 processes, The following graph represents its age.

Graph 46 – Graceful complaints – pending cases in 2022 – seniority

Regarding the age of the balance, it appears that the vast majority of pending cases were initiated in 2022 (82% / 8,233), and that processes initiated in 2021 and in previous years represent, as a whole, 18% (1,858) of the balance of graceful complaints without a decision at the end of the year.

Of the 63,790 cases terminated, 59,807 (94%) concluded through an administrative and 3,983 (6%) were involved in legal litigation, converted, transferred or annulled. The meaning of administrative decision, is illustrated in the following graph.

Graph 47 – Graceful complaints – Meaning of the decision

The graph shows that more than half of first-degree administrative litigation decisions, 38,321, were decided in favor of the taxpayer, and that unfavorable decisions on the merits to the taxpayer affect 15% of the processes, with decisions having the meaning of a partial decision of taxpayers’ claims represent 4% (2,655) of the universe.

This factuality cannot be attributed solely to AT errors, in fact, this situation is related to errors committed, with some frequency, by the taxpayers themselves, which give rise to excess tax assessments, and which they later rectify through declarations of replacement that are converted into graceful complaints, which after verification by the services of the mere lapse committed by the taxpayer are consequently granted.

In the field of hierarchical resources, the following graph shows their annual evolution, in terms of establishment, termination and rate of realization.

Graph 48 – Hierarchical resources – Annual evolution

The achievement levels recorded in the periods under analysis are above 100%, indicating a recovery of the balance of resources without a decision, each year.

It appears that in the period from 2019 to 2021, there was a 20% reduction, both in the number of resources initiated (-701), or in the number of extinctions (-802), with completion rates of 117%, 116% and 118%, respectively. In the period relating to 2022, there was an increase in the level of establishment of 5% (+141) compared to 2021, and in terms of extinction a slight decrease of 4% (-127), marking a
achievement rate of 108%.

In hierarchical resources there is a balance of 1,836 processes at the end of 2022, their seniority is shown in the following graph.

Graph 49 – Hierarchical resources – pending cases in 2022 – seniority

Analyzing the age of pending processes, it appears that hierarchical resources filed in previous years have a weight of 28% (514) of the balance of undecided appeals. filed in 2022, represent 54% (999), 18% (323) of the appeals relate to 2021, and the Of the 3,103 terminated processes, 2,863 (92%) concluded by means of an administrative and administrative is illustrated in the following graph. 240 (8%) were attached to legal litigation, transferred or annulled. The meaning of the decision

Graph 50 – Hierarchical resources – Direction of the decision

From analysis of the graph it can be concluded that half of the decisions were unfavorable to the taxpayer, which This means that in 50% (1,420) of the cases the meaning of the previous decision was not changed by the resource. Only 27% of the processes were totally (769) or partially 5% (144) in favor of the taxpayer.

The evolution of the average process decision time (TMC) indicator over the last four years may be verified in the following graph.

Graph 51 – Average process decision time (in months)

The average time that elapses between the initiation and decision of graceful complaints has increased progressively over the periods under analysis, with 2022 recording a time of 3.67 months, revealing an increase of 0.95 months (around 28 more days) compared to that recorded in 2019 (2.72 months). Regarding hierarchical appeal procedures, the indicator shows a decrease increased by 5.26 months (about 160 days less), from a time of 19.88 months in 2019 to 14.62 months in 2022.

4.3.2.2. Judicial litigation

Taxpayers may, under legal terms, react before the courts against the acts of which they are recipients, using for this purpose, in particular, judicial challenges, oppositions, embargoes from third parties and complaints about acts in tax enforcement that will be the subject of analysis in this report.

Within the scope of these processes, AT is responsible for sending the initial petition (when delivered to a finances) to the court, the organization of the administrative process and the possibility of revocation (total or partial). Public Treasury representatives contest the request presented by the taxpayer, after being notified by the courts to that effect.

Until the courts decide, representatives of the Public Treasury are still carrying out multiple interventions in proceedings, such as allegations, inquiries, responses to court requests, responses to requirements, analysis of MP opinions, etc. After the court decision, they proceed to analyze the sentence, in view of the appeal request, appeal counterclaims, non-appeal information and final and unappealable communication.

The computer application that supports these processes is the Tax Judicial Litigation System (SICJUT).

In view of what is established in the Tax Procedure and Process Code (CPPT), oppositions Conversely, judicial challenges may, at the option of the challenger, be delivered to the lawsuits and third-party embargoes are obligatorily delivered to the finance services, in a
finance or directly in court. For this reason, the number of legal challenges registered in the SICJUT, when extracting information, may not correspond to all objections presented each year by taxpayers.

The annual evolution of judicial litigation (includes challenges, oppositions, third-party embargoes and complaints of the chief’s acts in tax enforcement), regarding the initiation, termination and realization rate, can be seen in the following graph.

Graph 52 – Judicial litigation – Annual evolution

Source: AT/SICJUT

The realization rate represented in the graph shows values much higher than 100%, indicating a good recovery of the balance of processes in the period under analysis. The gradual decrease of 33% stands out (-2,646) of establishment levels, in the period from 2019 to 2021, resulting in a progressive increase in achievement rate, from 130% to 178%.

In the period of 2022, compared to 2021, there is an increase of 7% (+376) in the number of cases initiated and a decrease of 11% (-1,081) in the number of cases terminated, motivating a drop in the level of achievement to 148%. The following graph analyzes the processes established and terminated, in 2022, distributed by value bracket.

Graph 53 – Processes initiated and terminated by value level

When considering the initiation and termination of processes, by value level, it appears that the rate of achievement is above 100% in almost all levels, with the exception of the level of processes with a value between “100 thousand EUR to 249 thousand EUR” which presents a realization of only 59%.

It should be noted that the value bracket “Up to 99 thousand EUR” records the vast majority of the number of cases 4,834 (83%) were initiated.

The following graph analyzes the processes initiated and terminated, distributed by type of process.

Graph 54 – Processes initiated and terminated by type of process

It appears that in number, the opposition and challenge processes are the most significant, extinct for each of the aforementioned procedural species, with realization rates of 124% and 201%. representing, respectively, 45% and 34% of the cases initiated, and 38% and 47% of the cases Of the 8,636 cases extinguished in 2022, 6,726 (78%) were extinguished by court decision, 719 (8%) were resolved by administrative decision and 1,191 (14%) were annulled, transferred or converted. O meaning of the decisions handed down in the tax courts of first instance, during the year 2022, can be seen in the following graph.

Graph 55 – Meaning of the judicial decision in the TAF – in number of cases

In analyzing the graph, the weight of 40% (2,677) of sentences handed down in an unfavorable sense stands out. to the taxpayer, superior to the meaning of decisions on the merits favorable to the taxpayer, which represent 31% (2,093). It should also be noted that 10% (671) of the sentences were partially in favor of the taxpayer..

4.3.2.3. Fine Reductions and Administrative Offenses

Efficiency in detecting and sanctioning tax infractions constitutes a strategic vector in promoting of tax justice among taxpayers, taking a proactive role in preventing irregular practices. The Administrative Offenses Management System (SCO) is the IT application to support processes fine reduction and administrative offense processes, the evolution of which in recent years is mirrored in the following graph.

Graph 56 – Fine reduction processes (PRC) and Administrative Offense Processes (PCO) – Annual evolution

The levels of achievement recorded in the periods under analysis show some fluctuations interspersed, higher or lower than 100%, indicating a recovery and accumulation of the balance, respectively. The year 2022 compared to 2021 records a decrease in the results achieved, translating into a 15 pp decrease in the completion rate, which went from 103% to 88%, in a context of positive variation in the opening of 52% (+1,309,182 processes) smaller than the extinction of processes by 30% (+767,920 processes).

Of the processes initiated, they concern reporting entities belonging to Inspection and Control Tax 2,767,700 cases (73%) and the remaining 1,047,861 (27%) refer to non-payment of toll fees and the use of public transport for passengers without a valid transport ticket.

The following graph presents information regarding the 2,787,252 infractions that gave rise to of the processes initiated by the Tax Inspection and Control, distributed by punitive rules of the General Regime of Tax Offenses (RGIT).

Graph 57 – Infractions initiated by RGIT punitive rules

In 2022, as in previous years, the failure to deliver tax payments (83%) and the lack of or delay in the delivery of declarations (13%) represent the overwhelming majority of processes instituted, given the existence of a control system for the aforementioned types of infraction. defaulters, which automatically detects the aforementioned irregular practices using information resident in computer databases.

The age of the balance of 1,290,543 pending cases at the end of 2022 is represented in the graph Following.

Graph 58 – Fine reduction processes (PRC) and Administrative Offense Processes (PCO) – pending processes in 2022 – seniority

It emerges from the graph that the balance of pending processes at the SCO is mostly composed of processes initiated in 2022, corresponding to 93% (1,200,543 processes) of the total pending cases existing ones, previous years show little expression, representing 1% (13,863 processes).

The number of cases with suspensions that make it impossible to process the process is still expressive, totaling 6% (76,137 processes) of the existing balance.

COLLECTION OF FINES AND PROCEDURAL COSTS FOR OFFENSES

The amount of fines and procedural costs for administrative offenses charged by AT, in 2022, was 194.36 million EUR, this value represents an increase of 7% compared to 2020, and a decrease of 4% compared to 2021.

Graph 59 – Evolution of the results of the collection of fines and procedural costs for administrative offenses – Millions of EUR

4.3.2.4. Tax Executions

DEBT INSTALLATION

Analyzing the annual evolution of the amount established, in its fiscal aspect, in relation to the total of debts, it appears that, in the period from 2014 to 2018, the proportion of tax debts presents a range of variation that fluctuated between 67% and 84%, revealing, as a rule, an evolution proportionally unequal. Since 2019, the filing of tax debts compared to the total filing, quantified at 89% (average of last four years), presents a proportionally stable evolution. In other words, the tax component is in line with the evolution of all outstanding debts.

In the following graph we can observe the evolution of total and fiscal debt amounts since 2012.

Graph 60 – Evolution of debt initiation (2011-2022)

The annual evolution of tax debt due to the main taxes can be seen in the graph that follows.

Graph 61 – Value of accumulated VAT, IRS, IRC and IMI charges

Income taxes (IRS and IRC) show an increase of around 10% in 2022 compared to last year. Conversely, other tax debts, which include municipal taxes, have a negative variation of 18%. The introduction of VAT in 2022 did not vary significantly
on the last year.

By analyzing the previous graph, it can also be seen that income taxes, when compared to the period preceding the COVID-19 pandemic, they reveal a less increase significant, quantified at around 5%.

DEBT INSTALLATION RESULTING FROM NON-PAYMENT OF VAT

The establishment of new debt is particularly important in terms of VAT, as it is the tax where the Non-compliance with payment obligations tends to be higher. Non-delivery of VAT received of customers is a particularly serious non-compliance, given that it involves the appropriation of tax paid by third parties, which may be qualified as a crime of abuse of fiscal trust when your value is more than 7,500 EUR per tax period.

The following graph analyzes the evolution of the volume of new debts incurred, by tax period, for non-payment of VAT determined in the corresponding periodic declaration, in value and number of statements.

Graph 62 – Debt resulting from non-payment of VAT

It appears that, in 2022, the value of the proceeding from missing payments (PF) of VAT recorded a slight decrease accompanied by a more pronounced decrease in the number of PF.

This trend is in line with previous years 2019 and 2021 and reflects, not only the entry into force of Decree-Law No. 125/2021, of December 30th (added by Decree-Law No. 42/2022, of June 29th), as well as increasing the effectiveness and efficiency of AT policies in preventing and combating this type of non-compliance, not only in coercive collection, but also in patrimonial and criminal liability the decision-making center for companies’ non-compliance – their administrators and managers.

DEBT PORTFOLIO

The debt portfolio, managed by AT services, is not, in its entirety, susceptible to the practice of acts coercive. Thus, with regard to legally suspended debt, there is a legal inhibition for practice of any coercive act with a view to collecting it. Another component of the debt portfolio is the value declared in default. Declaration of failures is an act mandatory, as long as the legal requirements are met, as set out in article 272 of the CPPT and is carried out after all tax enforcement operating systems have been compelled, based on pre-defined requirements.

The following graph disaggregates the accumulated debt portfolio (fiscal and non-fiscal), allowing us to separate that which is susceptible to acts leading to charging for AT services and that which is legally suspended.

Graph 63 – Debt portfolio breakdown

The debt portfolio, recorded at EUR 24,271 million at the end of 2022, presents a relative increase of 4.4%, when compared to the previous year. In line, active debt and debt declared failures recorded increases of 3.8% and 12%, respectively. In contrast, debt suspended registers a decrease of 1.7%.

Due to this evolution, the suspended debt, in terms of value, became the second largest in 2022. largest component of the debt portfolio, with the top place now occupied by debt declared in failures. The absolute increases can be explained through the indirect effect of the change case law relating to the matter related to prescription, a position accepted by the AT, which on a today’s peaceful form welcomes the understanding of the lasting effect of interrupting the prescription, which consequently generated a smaller number of prescribed debts, which, as they are old debts and difficult to collect, will, after the exhaustion of all legal attempts to collect them, end in processes declared failed.

However, the value of the suspended debt maintains a substantial weight in the portfolio, representing more of a third of the total. In this context, portfolio management assumes particular importance, as AT can only operate on debt that is not legally suspended, which obviously restricts the universe of potential action. On the other hand, the Tax Execution Processes (PEF) suspended with guarantee, ensure a greater possibility of generating revenue in the event of non-compliance with the assumptions of the suspension or in cases of judicial outcomes in favor of AT. The challenges to efficiency that arise require rigorous monitoring and follow-up close to the debt portfolio, alongside the implementation of management measures, supported by analysis of the maturity of the phases and debt.

4.3.2.5. Coercive Collection

The annual performance of coercive collection has registered variations that are justified by the conditions resulting from the application of legislation published in response to the economic situation experienced in these years.

Table 57 – Coercive collection in view of the proposed objectives

In 2022, with the entry into force of the changes to the regime for the suspension of tax enforcement processes, provided for in Law no. 7/2021, of February 26, in the name of reinforcing taxpayer guarantees and simplifying procedures, if an impact on the processing of processes in the same year, in particular resulting from the suspension of tax enforcement processes, for a maximum period of 120 days, between the end of the voluntary payment period and the presentation of the means of judicial or administrative litigation reaction of investigation of the legality of the debt, when tax debts worth less than 5,000 EUR or 10,000 EUR are at stake, depending on whether we are dealing with natural persons or legal entities.

Likewise, the entry into force of Decree-Law no. 125/2021, with profound changes to the installment payment regime, creating a true pre-executive phase, as well as the extension of the maximum benefit limit and the temporal extension of the conditions for exclusion from new installment plans, suggested a scenario of restrictive effect on the volume and availability of the portfolio, particularly with regard to the availability of debt incurred in the same year.

It should be noted with special emphasis that coercive collection depends on the debt portfolio, especially new debt that matures annually. In fact, the higher the new debt, that is, the failure to pay, the higher the amount to be charged by the coercive collection system. The evolution in the establishment of tax debt has a direct and immediate impact on the level of collection coercive.

However, analyzing the final results for the year 2022, it appears that despite the identification of potential constraints, the volume of installation was generally higher by 3.7%, when compared to the average of the last three years (2019, 2020 and 2021); in relation to 2021 alone, it presents a positive variation of 1.7%.

Analyzing the age of the debt collected coercively in 2022, it appears that approximately 39% comes from debt incurred in the same year, revealing a certain stability, when compared to the average value of the previous three years, which stands at 41%.

The previous graph shows the evolution of the collection ratio over the expected objective, over the years, allowing a direct relationship to be made between the amounts charged, the established objective and its overcoming. The years 2013 and 2016 were those in which the highest ratios between collection and objective were reached, coinciding with the periods in which the RERD – Exceptional Debt Recovery Regime and PERES – Special Plan for Reducing Debt to the State were in force. , respectively.

Regarding the values reached in the coercive collection of the last decade, it should be noted that, despite the cyclical constraints mentioned above, the AT in 2022 managed to be in line with previous years, which is revealing of the efficiency and effectiveness of the services.

Therefore, the performance of AT services is highlighted, to which the monitoring and control measures of information systems and the debt portfolio contributed, namely:

• Monitoring and controlling the performance of coercive collection systems, assessing the quality of acts performed and speed of execution;
• Monitoring the results of regional bodies;
• Implementation of management measures, supported by the analysis of the maturity of the phases and the debt;
• Processing of management information, which optimized the consultation of debt portfolio data, coercive collection, establishment, extinguished PEF and seizures, to all those responsible for monitoring it, whether at local or regional level;
• Provision of management information and decision support, which allows greater efficiency in managing the debt portfolio and greater effectiveness in obtaining results.

As for the coercive collection of tax debts, in 2022 it reached a value of 1,085 million EUR, representing 84% of the total debt collected (1,294 million EUR). The following table shows the value of tax debts recovered by AT, distributed across the various taxes and their respective interest, comparing it with the amounts charged in 2021.

Table 58 – Value of tax debts recovered

As in the previous year, the IRS continues to be the tax from which the greatest revenue is identified collected, with a weight in 2022 of more than 30%. However, it is the IRC that presents the greatest variation positive, registering an increase of 28%.

4.3.2.6. Management measures to increase the effectiveness of the management system coercive collection

4.3.2.6.1. Monitoring plan for integrated debtor management strategic (PAGIDE)

A strategic debtor is selected based on the following inclusion criteria: global debt, in a Finance Department, greater than 500,000 EUR or global debt, in more than one DF, greater than 250,000 EUR; and all the largest debtors, not included in the previous criteria, whose total debt make up 80% of the SF portfolio. A new strategic debtor can also be selected by decision of the Director of Finance.

In addition to losing their status as strategic debtors and being considered terminated when extinguish their debts in tax enforcement, since March 2018, the exclusion automatic payment for strategic debtors with a debt of less than EUR 50,000.

On the other hand, in accordance with Service Instruction no. 60 064/2018, whenever the AT is appointed for the committee of creditors, the Director of Finance must verify whether the insolvent person to be monitored is already classified as a strategic debtor, and, if not, it must be included as such, in the SIGIDE application (Strategic Debtors Integrated Management System).

PAGIDE is a fundamental instrument for managing strategic debtors, whether in combating uncollectibility of high-value tax debts, or in the fluidity of the processing of tax processes debtors involved. SIGIDE centralizes all strategic debtor information and supports its management.

At the end of 2022, around 61% of the total portfolio were concentrated in 17,288 strategic debtors of the debt. These debtors are responsible for only 6% of the total number of enforcement proceedings pending taxes (see following graphs).

Graph 64 – Decomposition of the debt portfolio (December 2022) – value of processes

The debt portfolio of strategic debtors, at the end of 2022, represented:

• 61% of the total debt portfolio;
• 35% of the processable debt portfolio;
• 86% of debt suspended;
• 59% of debt declared in default.

The breakdown of the strategic debtors’ debt portfolio is distributed as follows: 17% in processable phases, 49% in suspension phases and 34% declared in failure. In the remaining debtors, this distribution was 50%, 13% and 38%, respectively.

Regarding the number of cases, at national level, 21,165,328 cases of tax execution (PEF), of which strategic debtors were responsible for around 6%, with 1,345,126 PEF, distributed as follows: 35% in processable phases, 27% in phases suspension and 38% declared failures.

In the remaining debtors, this distribution was 56%, 10% and 34%, respectively.

Graph 65 – Decomposition of the debt portfolio (December 2022) – number of processes

The amount of PEF of strategic debtors, at the end of 2022, represented:

• 6% of total PEF;
• 4% of PEF in processable stages;
• 16% of PEF in suspension phases;
• 7% of PEF declared failures.

4.3.2.6.2. Marking and constitution of seizures

In 2022, 522,727 seizures were registered in the electronic seizure computer system (SIPE). The AT makes repeated communications, recommending the regularization of the tax situation of debtors and warning of the consequences of the persistence of the non-compliance situation, before starting the practice of acts of coercion, namely seizure of debtors’ assets.

Registration of the attachment in the SIPE constitutes, as a rule, the initial impulse of this coercive act, and is a consequence the persistence of the irregular tax situation. In 2016, the seizure system was implemented electronics, which systematized the integration of systems and automation of procedures for detecting seizable assets and promoting acts of seizure by the authorities tax enforcement.

Since that year, the number of seizures has been decreasing successively. Despite the sharp decrease recorded in 2020, with a negative variation of 49%, the year 2021 revealed a new and notable decrease in marked seizures, quantified at 32%, a direct result of the measures that led to the inhibition of the practice of coercive acts during the period of validity of the exceptional and temporary measures to respond to the epidemiological situation, as well as plans unofficial services.

Analyzing the data for 2022, it appears that, despite the recovery compared to the year previous, where it presents a positive variation of 40%, there is a marked slowdown in the number of registered seizures compared to the pre-pandemic period.

These results can be explained by the implementation of measures to mitigate the effects pandemics explained in the previous point “Coercive Collection Carried Out”, which continue to have repercussions effects on the debt portfolio and consequently on the practice of coercive acts. In the following graph The evolution of seizures registered in the period from 2017 to 2022 is shown.

Graph 66 – Annual evolution of the number of registered seizures

Seizures affect various types of assets and the following graph shows their distribution. In 2022, the seizure of Other Values and Income is the one that assumes the greatest expression, representing 42% of registered seizures. Wages and Salaries and Credits, with 21% and 16%, respectively, are the assets that appear in second and third places. Properties represent 5.2% of total registered seizures.

Graph 67 – Number of seizures marked per asset

Other Values and Income, Wages and Salaries, Pension Credits, Rent and Certificates of Savings, represent 83% of all seizures. This situation complies with the provisions of the law, particularly with regard to the selection of assets to be seized as a priority, which are also the easier to make money.

4.3.2.6.3. Coercive sales

The Integrated Coercive Sales Management System (SIGVEC) is the application that manages electronically the entire procedure for the sale of assets seized in the context of tax foreclosure, meeting the requirements on which it depends (personal summons completed, absence of pending litigation and evaluation of the property under CIMI terms).

SIGVEC allows integrated and computerized management of the entire sales procedure, from its appointment, until the award, including  the respective advertising on the internet. Nowadays it is increasingly yet another essential instrument for the effectiveness of fiscal executive action. Its implementation dematerialized the sales procedure, promoting increased speed and savings procedural, bringing the attachment closer to the respective sale.

The following graph shows the evolution of the number of sales marked by AT services, since the year 2017.

Graph 68 – Evolution of sales marking in SIGVEC

In 2022, scheduled sales increased compared to 2021 (+18%), reversing the trajectory verified in 2021.

4.3.2.6.4. Plan for the effectiveness of credit complaints (PERC)

During 2022, 408 degrees were completed with a total value of 27.4 million EUR. Control of pending deposits awaiting decision and completion of payment procedures graduation of credits is carried out regularly, so that approval for graduation is quick, with the processing and notification to creditors and debtors of the outcome of the graduations, in order to avoid frustrated expectations of debt collection. In the following graph we can see the degrees completed, in value and quantity, between 2013 and 2022.

Graph 69 – Degrees completed – quantity and value

In the year 2022 there was a recovery in credit graduations, in number and value, resulting from the direct reflection of the increase in sales made.

4.3.2.6.5. Holding administrators and managers responsible for company debts societies

REVERSALS IN EXECUTIVE PROCEEDINGS

The institution of reversal consists of calling to the executive process those responsible for the subsidiary, upon verification of certain legal constraints. Subsidiary liability is like this effected through the reversal in tax execution, in accordance with articles 23 and 24 of the LGT and 153 and 160th of the CPPT. In this way, AT has been promoting the call for administrators and managers responsible for paying the debts of their respective companies, whenever the legal assumptions.

The measures implemented to mitigate the effects of the COVID-19 pandemic transported the debt to the sphere of suspension of executive processes, thus reducing the number of reversals with the aim of to legitimize the subsidiary taxpayer before the tax enforcement body. The following graph shows the number of rollbacks initiated since 2017.

Graph 70 – Number of reversals determined against company administrators and managers

Compared to 2021, in 2022 there will be a negative variation of 33% in the number of reversals initiated, in line with the rigor imposed by the AT in verifying the legal assumptions of the subsidiary responsibility, guided by the quality necessary to validate the act.

4.3.2.7. Debt portfolio qualification

TAX DEBT CANCELLATIONS

The aggregate value of tax debt write-offs made in 2022 was EUR 870.7 million, more 33% than in 2021. However, the number of cancellations only increased by around 3% compared to the previous year, as shown in the following table.

Table 59 – Cancellation of tax debts

Debt cancellations result, for the most part, from the presentation of replacement declarations for correction of errors made by taxpayers, the origin of objection processes or graceful claim and cancellations by decision of the creditor entity.

PRESCRIPTION OF TAX DEBTS

The prescription of a tax debt occurs, as a general rule, eight years after the year in which the tax debt occurred. event giving rise to the tax obligation or from the end of the year in which the tax event occurred, depending on whether it is a single or periodic obligation tax, unless the causes suspension and interruption of the legal term.

Coercive collection systems have the capacity to detect all seizable assets of debtors and to carry out, in all processes, all acts legally provided for and necessary for the debt collection. They are also in a position to carry out all acts related to the execution, such as advertising in the Debtors List, offsetting debts with reimbursements and cancellation of tax benefits.

When all the acts have already been carried out and there are still outstanding amounts, the law obliges the AT to declare debts in default, and proceed with their extinguishment as soon as the legal deadline has elapsed The board.

The following section shows, per tax, the value of tax debts whose limitation period has occurred and whose legal impossibility of collection was verified.

Table 60 – Prescription of tax debts

The prescription statement does not reveal the ineffectiveness of the services. Its timely assessment guarantees security and legal certainty, as well as the quality and efficiency of coercive collection systems, avoiding the practice of unnecessary coercive acts and litigation.

Regarding the sharp growth in the amounts of prescribed tax debt that occurred in 2022, compared to 2021, (previous table) it is mentioned that the reading of these data necessarily requires contextualization, because only then can they be fully interpreted. In fact, as is known, as direct consequence of the COVID-19 pandemic, all executive action was suspended at the end of the first In addition to the periods mentioned above, there is also the suspension resulting from the introduction of plans quarter of 2020, only resuming its normal processing in July of the same year, a situation that unofficial installments prepared by AT. These suspensive periods, in addition to suspending all any coercive act with a view to collecting the debt, resulted in the suspension of limitation periods, which postponed its occurrence until a later period. it repeated itself at the beginning of 2021.

4.3.2.8. Suspended debt relief

During 2022, quarterly monitoring of all procedural phases was carried out suspensions, with the aim of monitoring the automatisms of the Execution System Tax (SEFWEB) and the strict control of endorsements that are carried out manually.

All measures adopted aim to verify whether all the conditions for suspension are met legality of the processes. Once suspended, AT is inhibited from taking any coercive measures that aimed at charging these processes.

The processes in each suspensive phase are counted, in number and value. The set of these Records allow for evolutionary behavioral analysis and the detection of atypical variations, i.e. variations that may not result from the normal course of tax enforcement proceedings.

The measures adopted have had an impact on the suspended debt portfolio, by checking whether they are all the conditions for the legal suspension of debts are met. Along with the crossings of information from the various systems already implemented, situations are regularly monitored of suspension, which are still manual intervention.

Table 61: Debt suspended by manual suspension phase

The table above reveals the result of resolving the suspended debt in the manual processing phases.

There is a reduced number of processes in phases F10818 and F11119 in response to the efforts of consider the procedures to disable these phases as completed. The F10920 phase accounted for in 2022 at 110.2 million EUR, substantiated by 5,173 processes, reveals a decrease in number of processes (negative variation of 39%) and the amount owed (- 23%).

The objective is to continue developing IT functionalities that prove suitable for controlling suspension, leading to the automation of procedures or the sanitation of phases that are still carried out manually.

18 F108: Suspension by SEAF Order 7/98-XIII of March 4

• Extinction of the phase as soon as the reduced universe of processes contained in it ends.

19 F111: Suspension Decree-Law No. 124/96

• Extinction of the phase as soon as the reduced universe of processes contained in it ends;
• Verification of pending situations;
• Steps to complete the procedures.

20 F109: Suspension Pending Cancellation

• Periodic checking whether the assumptions still hold;
• Steps to resolve associated problems;
• Availability at AIG of a monitoring list of suspensions registered more than six months ago.

4.4. Action in the criminal sphere

4.4.1. Tributary and customs authority

4.4.1.1. Criminal investigation – tax area

In recent years, Criminal Investigation has assumed an increasingly important role in AT’s performance, and which has been reinforced by the changes to articles 40 and 41 of the General Regime of Tax Offenses (RGIT), introduced by Law No. 7/2021, of February 26th.

CRIMINAL TAX INQUIRIES

The Fiscal Criminal Inquiry System (SINQUER) is the computer application to support investigations criminal offenses and appears as an automatic management and communication tool between Security Services AT Criminal Investigation and the Public Ministry, the judicial entity responsible for directing mentioned surveys.

In order to make SINQUER an increasingly useful tool, both in procedural management and in obtaining statistical data, several developments were made in this application, allowing all data presented to represent the entire AT criminal investigation, either at central or regional level, instead of previous reports where, in some headings, only reference was made to data from the central criminal investigation unit. During this change, data from previous years were therefore updated, in the tables and graphs presented below, containing data at national level.

The following graph shows AT’s performance in the field of criminal tax investigations managed by SINQUER application, for the same period, from December 2019 to December 2022.

Graph 71 – Criminal investigations – Annual evolution

The achievement levels achieved in the periods under analysis are below 100%, in 2021, indicating an accumulation of the balance, and above 100%, in 2019, 2020 and 2022, showing a recovery of the balance of criminal investigations.

The period of 2022, compared to 2021, marks a decrease in the number of cases initiated by 39% (1,438) and a decrease in the level of extinction of around 8.7% (256), resulting in an increase in the rate realization of 40 pp, going from 81% in 2021 to 121% in 2022. The reduction in cases initiated essentially results from the exceptional standards to support the voluntary compliance, which were in force in 2020 and 2021 (COVID-19 regulations) and which are now reflected in the initiation of new criminal proceedings that cover these periods. The approval of the Law No. 7/2021, of February 26, which reinforced taxpayer guarantees and simplification procedural, also contributed to the situation mentioned above.

The distribution by crime of the 2,204 criminal investigations opened in 2022 can be viewed on following graph:

Graph 72 – Criminal Investigation Processes – Established due to RGIT crimes

In 2022, of the crimes recorded by the AT, abuse of tax trust is the most significant (59%), mainly due to the existing control system that automatically detects signs of the aforementioned criminal practice. Tax fraud, credit frustration and tax fraud as a whole present 16% of criminal investigation processes initiated, usually detected within the scope of inspection procedures. It should also be noted the weight of crimes recorded by the Public Prosecutor’s Office and other entities and investigated by AT, 15% of the total.

At the end of 2022, there were 1,521 investigation files under investigation, whose age relative to their establishment is reflected in the following graph:

Graph 73 – Criminal investigation processes – pending in 2022 – seniority

The balance of criminal inquiries under investigation essentially comprises 50% of cases initiated in 2022. It should be noted that the processes initiated in previous years still have some expression, totaling 44% as a whole. It is also worth noting that the processes suspended for legal reasons, in accordance with no. 2 of article 42 of the RGIT, represent 6%, and therefore have not been still sent to the Public Ministry.

Tax inspection plays an important role both in detecting conduct that may indicate the commission of tax crimes, either after their detection or during their investigation.

During the investigation, the tax administration bodies are responsible for the powers and functions that the Code of Criminal Procedure (CPP) attributes to criminal police bodies and authorities, assuming that they are delegated the practice of acts that the MP can attribute to those entities, regardless of the value of the illegitimate patrimonial advantage. AT’s area of activity, within the scope of Criminal Investigation, focuses on essentially:

• In the investigation of inquiries relating to crimes detected within the scope of AT activity, with its own competence under the terms of no. 1 of article 41 of the RGIT or in which the competence has been delegated by the MP;
• In investigating inquiries, jointly with other Criminal Police Bodies (OPC) in Mixed Teams, in accordance with the provisions of no. 4 of article 41 of the RGIT;
• In providing information to judicial authorities, in the context of criminal proceedings or prevention of Money Laundering. The following table presents a summary of the evolution of criminal investigation activity in AT, in Central and Regional Services, with regard to processes initiated and concluded in the last two years:

Table 62: Criminal investigation processes21

The processes under investigation at AT assume a special degree of complexity, involving fraud schemes, with territorial dispersion within the national territory, and in most cases also with connections to EU countries or third countries, many of them designated as “offshore”, The investigation of hundreds of taxpayers, both natural and collective, is at stake.

AT’s criminal investigators carry out countless investigative steps every day, with with a view to obtaining evidence of the commission of tax crimes, committed by individuals, who claim fraud schemes, sometimes complex, through the use of companies, whether in Portugal or abroad, they circulate the money through bank accounts, domiciled in national banks or foreigners, with the aim of taking advantage of barriers, whether accessing banking transactions or cooperation between countries, making the investigation of this type of crime very complex and sometimes slow.

In this context, in 2022, numerous investigations were carried out, of which 358 stand out searches, 2,163 defendants constituted, 1,467 witnesses interviewed, 117 communications interceptions (targets) and 22 arrests, the most significant of which are highlighted in the following table:

21 In the 2021 anti-fraud report, these data only referred to AT’s central services. In the present The report also includes data relating to regional AT services.

Table 63 – Criminal investigation procedures

As the “constitution of defendants” and “witness examinations” play a significant role, In the total of criminal investigation procedures, the seizure of accounts stands out in 2022 banking and cash. AT has sought to monitor the processes of criminal investigation, with a view to collecting statistical data relating to accusations and convictions, result of the investigative work carried out, following the decisions that should be communicated in accordance with the provisions of articles 45 and 50 no. 2 of the RGIT.

However, it has been very difficult to obtain this data, which has meant that in many cases, AT has not come to be aware of the decisions made, given that, contrary to the legal established, the Courts and the Public Prosecutor’s Office do not always communicate their decisions to the AT. At the In the following table, a summary and evolution of the known results are presented, grouped into last two years of the respective communication to AT.

Table 64 – Decisions communicated to AT

HIGHLIGHT OF JUDICIARY DECISIONS IN PROCESSES INVESTIGATED BY AT NA QUALITY OF CRIMINAL POLICE AGENCY

(i) Process related to the cork sector

In the context of a criminal case involving qualified tax fraud investigated by the AT, a decision was made condemnation, regarding the use of these false invoices, with the State having seen its revenues decrease in terms of VAT and IRC in the amount of 337,737 EUR. Following the trial, a defendant was single person convicted, in co-authorship, to a sentence of three years and nine months in prison.

In the same decision, two more single defendants were sentenced, in co-authorship, to prison sentences of three years and two years and nine months in prison, suspended upon payment of the missing amount and respective legal additions. The defendant company was sentenced to 480 fine days.

(ii) Process linked to the activity of certified accountant – Tax Fraud

In a case linked to the activity of a certified accountant and investigated by the AT, a decision was made sentencing in January 2022. Briefly, between 2011 and 2013, the main defendant, taking advantage of his situation of exercising the functions of accountant of all defendant companies, being also the legal representative of some of these same companies, acted together with the remaining defendants, in a scheme illicit simulation of withholdings at source, thus managing to obtain refunds, some paid by the Public Treasury and others being suspended upon detection, in a total of around 800,000 EUR.

Following the trial, the following convictions were obtained for nine defendants (individuals):

• Three of the defendants were sentenced to effective (non-suspended) prison sentences of 11 years, six years and six months, and six years and three months, respectively, with one of them also being sentenced to being banned from working as an accountant;
• The remaining defendants were sentenced to suspended prison sentences of between two and three years months and five years. The same judicial decision sentenced nine companies accused of committing the crime of qualified fraud, in its attempted and completed form, to fines between 480 and 1,500 days.

(iii) Process linked to fraud in the intra-community acquisition of cars

A sentencing decision was handed down, in April 2022, for committing the crime of qualified tax fraud in the importation of vehicles. The facts occurred between 2014 and 2016 and refer to the import of vehicles, with the State being harmed by 232,246 EUR.

In short, the defendants in question, in order to conceal intra-community acquisitions, carried out or caused the legalization of vehicles in national territory, with the Customs, using invoices drawn up by them or by someone under their command, issued in the name of taxable persons, of Portuguese nationality. , as if these were the real intra-community buyers of them, which was not true.

In this case, the main defendant was sentenced to four and a half years in prison. Another manager of the company was sentenced to three years and ten months in prison, with a suspended sentence, with the suspension being conditional on payment to AT of the amount of 232,246 EUR. The court also sentenced the company to a 750-day fine.

(iv) Process linked to scrap activity

In March 2022, a conviction was handed down for the commission of a continuous crime of qualified tax fraud, which will have harmed the State by 333,311 EUR.

Briefly, the accusation was confirmed that, between 2015 and 2017, a company, whose purpose was the wholesale trade of scrap and metal waste, deducted VAT and accounted for expenses incurred in invoices that did not record real operations. Following the trial, the following main convictions were obtained:

• The defendant company was sentenced to a fine of 900 days;
• The defendant manager was sentenced to four years in prison, suspending his execution, on the condition that the defendant pays the State the value of the tax installments and legal additions.

HIGHLIGHT OF OPERATIONS CARRIED OUT BY AT, AS A POLICE AGENCY CRIMINAL

(i) “Operation Ferry”

As part of this operation, which took place in the district of Porto, in the Autonomous Region of Madeira and in Malta, eight non-domestic Search Warrants were executed, carried out by 12 Tax and Customs Inspectors, seven IT specialists and 12 military personnel from the GNR Tax Action and four soldiers from the Madeira GNR Territorial Command.

The facts under investigation, which motivated the initiation of the case in question, substantiate the practice of acts capable of constituting criminal offenses of qualified fraud and money laundering, refer to the years 2014 to 2016 and constitute a transaction carried out using another jurisdiction , in order to reduce taxable profits in Portugal. This procedure essentially aimed to reduce the amounts payable under IRC, as well as camouflage a possible distribution of the profits obtained, totaling around EUR 2 million.

(ii) Process related to fraud in the construction and forestry sector

During the investigation of an inquiry initiated on suspicion of the crime of qualified tax fraud, a network of fraudulent operators was identified, which aimed to provide documentary support for operations not carried out, with the aim of harming the State by undue deduction of VAT and expenses not incurred. In order to prove the facts, four home search warrants and two non-home search warrants were issued, which were carried out by 15 tax inspectors, six members of the AT Forensic Computing Center and with the operational support of 12 members of the GNR. At the end of the investigation, 20 defendants were named, and a request for civil compensation was proposed, totaling around EUR 2 million.

(iii) Process linked to fraud in the meat sector

AT is in charge of, under the direction of the Department of Investigation and Criminal Action (DIAP) of Braga, investigations related to a tax fraud scheme, in practice for several years by a group of family-owned companies, operating in the meat in the northern region, which consists of the acquisition of live animals in Spain, through the interposition of “shell companies”, for which “iron front” managers are appointed, who do not fulfill their tax obligations, harming the State coffers.

With this scheme they intend to hide the real participants in the business, who in this way are able to avoid complying with declarative obligations and subsequent taxation due in Portugal, “transferring” their obligations to shell companies.

The scheme also allows the parallel economy to be promoted in the national territory, through sales without issuing the appropriate invoice, defrauding the State coffers in terms of VAT and IRC. The scheme had been in place for several years, resulting in the loss of State revenue by around EUR 2.8 million. Following this operation, 20 defendants were constituted, including companies, managers and “foremen”, and the seizure of assets was carried out to guarantee the loss caused to the State, to be determined in the end, specifically: six rustic buildings, five urban buildings and 24 vehicles.

Searches were carried out in 14 locations, including companies, homes and an accounting office, involving a total of 58 personnel in the operation (25 Tax Inspectors, five Forensic IT Specialists and 28 PSP agents and GNR military personnel with a view to to guarantee the safety of the places where the operation took place).

(iv) “Operation ADMIRAL”

This process, led by the European Public Prosecutor’s Office, which delegated competence to AT, as a Criminal Police Body, began as a carousel VAT fraud in the mobile phone sector, and was later found to involve distance sales of smartphones (mainly iPhones ) . through a Marketplace, to end consumers in the various Member States, whose sales proceeds were channeled to the accounts of Portuguese companies, which did not register in the aforementioned Member States and the corresponding payment of VAT.

The modus operandi involved simulating intra-community transmissions, exempt from VAT, always with the aim of hiding the actual operations – sales on the Marketplace. It is estimated that this fraud could have amounted to more than EUR 100 million at European level.

Following around 100 home and non-home searches, carried out in the municipalities of Porto, Matosinhos, Vila Nova de Gaia, Braga, Guimarães, Vila do Conde, Póvoa de Varzim, Coimbra, Figueira da Foz, Lisbon, Seixal, Vila Franca de Xira, Sintra and Funchal, 14 individuals linked to this organization of transnational character and dimension, who were in national territory, were arrested.

The police operation involved around 250 members of the Judiciary Police (PJ) from different departments, as well as 35 members of the AT, with the participation of a judicial magistrate, a European Prosecutor and two Portuguese Delegated European Prosecutors. During the police operation, cars and other luxury goods, computer equipment, money worth more than EUR 2 million were seized, as well as various documentation relating to the commission of the acts, and around 50 vehicles, 47 properties and around 600 national bank accounts.

4.4.1.2. Criminal investigation – customs area

The crime detected by AT customs services resulted in the discovery and participation of a considerable number of illicit activities, with 41 of the processes reported classifying as crimes of a customs nature and 16 of a non-customs nature. During the year 2022, for investigation, a total of 37 new cases.

The investigation of criminal inquiries by the AT customs area is not limited to crime customs department participated by the Customs, and the Public Prosecutor’s Office is also responsible for fined by other OPCs, whether or not of a customs nature. On the other hand, there are also customs crimes (such as some cases of exporting elvers) which, not despite being participated by the customs services, their investigation has been called upon by the Competent magistrate of the Public Prosecutor’s Office, with a view to the convenient centralization and reinforcement of investigation of this illicit act, which has been demanded for better protection of species in the Space of HUH.

It is worth highlighting as a novelty the existence of four criminal cases of smuggling under investigation under direction of the European Public Prosecutor’s Office (EPPO), a body that has mechanisms at its disposal facilitators in transnational research.

During the investigation activity carried out in the year under review, 41 processes were concluded, of which ten were proposed to the Public Prosecutor’s Office for prosecution, ten for convolution in criminal cases. administrative offense and six cases to be archived. The remaining 15 cases were closed by others reasons, namely: 11 due to incorporation into other processes, one because the investigation was delegated to another OPC and three due to suspension. For the year 2023, 72 processes were carried forward (in investigation, challenged or suspended for other reasons). Contributing to these numbers is not only the complexity of some processes under investigation, but also the delay in the Courts and the continued lack of human resources for even greater efficiency of the activity.

Table 65 – Number of criminal investigations – customs area

As part of the necessary steps, in connection with a criminal investigation in the customs area, 386 actions were carried out, as shown in the map below:

Table 66 – Type of procedures in criminal investigations – customs area

CUSTOMS CRIME PROCEEDINGS WITH SPECIAL RELEVANCE

Within the scope of criminal proceedings investigated by the Customs Anti-Fraud Area, in 2022, Some processes with special relevance or complexity stand out:

(i) Smuggling

In the context of defending the EU’s financial interests, two smuggling cases stand out that were completed in 2022:

• One that has already been the subject of an indictment against a company and its legal representative, for committing 13 crimes of smuggling qualified by importing goods originating in China, which were declared as originating in Vietnam with the aim of not being subject to the payment of anti-dumping and compensatory duties, in amount of EUR 2,177,185, an amount that has already been regularized;
• Another, for committing two crimes of qualified smuggling, for importing merchandise also originating from China, declared as being of Korean origin, thus deceiving the payment of anti-dumping duties, in the amount of EUR 371,838, an amount that is already regularized.

(ii) Fraudulent introduction into consumption

In the context of excise taxes, the investigation into an illicit activity was completed organized at international level, concerning the fraudulent introduction into the consumption of alcoholic beverages in United Kingdom, through simulation of 521 shipments of beverages from tax warehouses located in several European Union countries, for a tax warehouse in Portugal, created for the purpose of avoiding taxation upon introduction into consumption, accounting for the drinks in the warehouse in Portugal under a storage regime (fiscally suspended from taxes) and validating in a fraudulent receipt.

To carry out the fraudulent introduction into consumption, which will have occurred in a third country (Kingdom Kingdom) resorted to the continued practice of falsifying documents, an essential act within the network of carrying out an international fraud scheme by validating false circulations of merchandise under tax suspension with supposed destination to Portugal, and also when issuing invoices false for simulating sales, configuring the crime of document forgery, which is foreseen and punishable under the terms of article 256 of the Penal Code (CP), attributable to two defendants, namely the legal representative of the company (English citizen) and the accountant.

(iii) Goods seized by customs

In 2022, actions were promoted by customs and central customs anti-fraud services, which led to seizures of goods worth around EUR 34 million. The most significant figures are shown in the table below.

Table 67: Total irregularities and value of seized merchandise

(iv) Seizures of various goods

With regard to counterfeiting, the number of detections, during 2022, continued to increase, It may be noted that many seized products are not only counterfeit, but also do not comply with security and compliance rules, so this activity is of great relevance for the protection of citizens.

The seizure of counterfeit or unlicensed medicines has also continued to grow, a trend which remains in line with the growth of online shopping, which is a matter of concern to AT.

Despite the legislation relating to the obligation to declare amounts in money that exceed the 10,000 EUR has been in force for several years, many situations of non-compliance declaration or inaccurate declarations, which total significant sums. The attempt to import Counterfeit money has also been observed.

Regarding intervention in the fight against trafficking in protected species, special emphasis has been placed on the intervention of Air Customs in supporting the existing taskforce at national level, enhancing In this way, the fight against trafficking in glass eels, also known as glass eels, which originate in national rivers and are protected by community regulations.

(v) Drug and cigarette seizures

The context that took place in 2022, marked by the war in Ukraine, from the first months of the year, led to the fight waged by AT in  matters of prevention, detection and seizure of illicit drugs and tobacco products, individualized here, constituted a challenge of constant anticipation and adaptation to new fraud methods, innovated by criminals, in order to continue to supply, in the difficult circumstances imposed by the war in Europe, demanding European customers.

In addition to permanent collaborative work with European or international counterparts, and with the relevant national authorities, namely, due to its importance, the PJ, were significantly increased risk measures, focusing on different modes of transport, anticipating new fraud methodologies.

The work methodology was based on close cooperation and collaboration with other authorities national and international and allowed, in addition to successful detection, to be conditions have been created so that, not only by the seizure of drugs, but, additionally, they can be created, in a timely manner, the necessary conditions so that for each detection, identification and held criminally responsible, those who enable, who support and those who are behind each trafficking operation.

The results of drug seizures in 2022, when compared with those in 2021, demonstrate the growing trend of results and the success of the anticipation and collaboration approach between national authorities, allowing the detention of dozens of individuals, with the seizure of several tons of drugs, often in direct collaboration between the AT and the PJ.

In this way, the environment was created to proceed with subsequent research, with other responsible, not just for the result and interruption of the individual logistics chain, since results, namely, the dismantling of the criminal organization and identification of the true that, if those responsible are not arrested, they will immediately proceed to another loading.

AT detected and seized more than four tons of illicit drugs, in more than 100 seizures, among which cocaine stands out, with more than 3.3 tons, as a result, clearly, of Portugal’s geographical position in Europe and the variety of traffic lines, maritime and areas that make our country a platform for international trade between America and Europe.

Table 68: Drug seizures

The performance of customs activities with regard to combating illicit trafficking and safeguarding product safety, had a significant increase in 2022, especially in terms of cigarettes seized, noting that not only did seizures in the airways increase by more than 100%, as cigarette smuggling was detected again by sea, in this specific case they were five containers were seized, representing almost 50 million cigarettes.

This situation resulted mainly from these seizures taking place in national ports, in maritime containers, which can conceal, on average, more than 800,000 cigarettes per shipment. The intervention of a mixed criminal investigation team, constituted between AT and the GNR’s Fiscal Action Unit (UAF).

Table 69: Cigarette seizures

4.4.2. Attorney General’s Office

At DCIAP, in 2022, 2 charges were filed, in investigations, for crimes of a tax nature (1) and customs (1), with 4 defendants, with a loss to the Portuguese State having been determined to be a global amount of 980,576.16 EUR.

In those cases, the Public Prosecutor’s Office filed claims for civil compensation, in one case, in the amount of 199,802.68 EUR. In 2022, 90 inquiries were processed at DCIAP and judicially declared and confirmed:

• seizure of assets and bank accounts totaling €623,430.00;
• seizure of assets and bank accounts worth €3,188,858.81
• suspension of banking operations in the amount of €10,599,835.62 and €751,980.33;
• freezing of bank balances in the amount of €10,232,000.00.

The amount of debts settled in 5 investigations filed in 2022, on suspension provisional of the process, totals €609,309.56. Within the scope of Law No. 83/2017, of August 18, and in accordance with No. 1, prevention procedures (known as PAPs) are intended to scrutinize all communications from the entities referred to in articles 3 and 4 of the aforementioned Law, relating to “suspicious operations” of money laundering and terrorist financing. Each communication corresponds to a preventive investigation procedure (known as PAP) in which seeks to determine the (il)legality of that specific operation reported to the DCIAP – financial or non-financial [e.g. online gambling, gambling in casinos, exchange agencies, real estate operations and operations carried out to and from foundations and/or non-profit organizations – NGOs]. The values described below are amounts that are blocked in the order of investigations – or that is, they constitute measures to suspend banking operations (known as SOBs) determined by the Public Prosecutor’s Office – and confirmed judicially, in an investigation – in a total of 699 (year 2022), which continued for investigation purposes.

The preventive investigation procedures (articles 43 and 47, both of Law no. 83/2017, of 18 August) are as follows:

(*) Inquiries opened — (with extraction of certificates of preventive procedures/investigations) correspond to processes — 699 new ones — and the remainder (77) are intended to instruct pre- existing inquiries, opened in the DCIAP and/or sent to the DlAPs territorially competent to carry out criminal action.

(**) the number of suspensions (1043) is higher than the total number of investigations initiated ex novo, as explained in the previous paragraph (*), as they correspond to suspensions of operations (SOBs) determined by the Public Prosecutor’s Office within the scope of preventing money laundering and subsequently, joined to pre-existing investigations, pending at the DCIAP and/or district DlAPs (opened in 2022 and previous years).

119 certificates of prevention procedures (non-urgent — communications under article 43 of the aforementioned Law) mostly sent to other DIAPs to open inquiry, and also to other entities [eg ATA-DSIFAE, Financial Services, ASAE, etc.) to act within the scope of their respective legal powers.

In DCIAP and in 2022, tax debts were settled. In fact, in an investigation, seized, and already declared lost in favor of the State, tobacco products with a global value of €59,553.36. Comparatively, in 2021, still as a result of the SARS COV2 and COVID-19 pandemic, The procedural activity of the Public Prosecutor’s Office was subject to various constraints and, until June 2021, the majority of trustees, tax inspectors and criminal police bodies were in teleworking regime, which compromised the majority of investigations, in an inquiry (started in the years 2021, 2020 and 2019).

4.4.3. Judicial Police

Given the complexity of investigating tax crime (tax, customs and security social) there has been, on the one hand, regular cooperation between the PJ and other criminal police bodies national team (in particular, AT and GNR), namely through the creation of mixed teams, and on the other, a necessary and fruitful international cooperation, including the use of technical means special needs and increased mobility due to the spatio-temporal expansion of criminal activity or the multiplicity of victims or suspects.

In 2022, we highlight, as an example, some operations within the scope of criminal investigation in tax crime investigations:

a) Operation “LEI-KONG”, in which 17 search warrants were executed in order to dismantle a tax fraud scheme and consequent money laundering carried out by ethnic Chinese citizens based in Portugal who develop retail and small wholesale economic activities, but that do not issue invoices. The values of economic activity are not declared to the tax authorities, They are not even reflected in the accounts and need to be disposed of. To this end, the authors of the fraud make cash deposits into accounts of shell companies, which hold accounts passage to send transfers abroad, namely in Europe and China, in order to make payments for acquisitions and/or repatriate funds that were not declared in companies that developed economic activity.

b) Operation “PASTOR”, on suspicion of committing the crimes of qualified tax fraud, money laundering, Willful insolvency and criminal association, carried out on 02/10/2022, focusing on a group of individuals who, through a scheme that resorts to falsifying the accounting of companies themselves, of Greater Porto, Felgueiras and Lousada, with the participation of 30 employees of this Police and were controlled companies and acquisition of properties, thus managing to obtain profits. 10 searches were carried out in the areas 9 defendants were constituted. 10 properties with a total asset value of €1,172,512.56 were also seized.

c) Operation “EASYCARD”, carried out on 15.02.2022, focusing on a group of individuals who committed acts capable of forming part of the crimes of fraud, tax fraud and money laundering, through the use of portable ATM terminals, associated with company accounts created for this purpose goal. 15 searches were carried out in the areas of Greater Porto, Braga and Vendas Novas, with 59 criminal investigation employees participated, which resulted in the creation of four defendants.

d) Operation “PARALLEL WORLD”, carried out on 02/21/2022, focusing on three individuals from same family (mother and two children) who committed acts that could be considered Fraud crimes Qualified Tax and Money Laundering, through the use of false invoicing and concealment of sales by part of the companies of which they were owners. 6 searches were carried out in the areas of Santo Tirso and Famalicão, with the participation of 16 criminal investigation employees.

e) Operation “PERSONAL LOAN”, carried out on 05.04.2022, focusing on a group of individuals of Dutch nationality who established/acquired the capital of national companies for which large amounts were transferred, with the aim of using them in the acquisition of real estate and, as well, under the cover of supposed investments in technologies related to energy renewable;

f) Operation “ELEVEN”, carried out on 11.05.2022, focusing on a group of individuals who applied an already well-identified Tax Fraud scheme, which seeks to use the weaknesses natural resources arising from the fact that we are faced with different taxation regimes – in this case, the existence of the so-called “Margin Regime”, referred to in Decree-Law no. 199/96, of 18/10, and the “general regime of the VAT” – levied on the transaction of the same good, making it possible for them to be cunning, malicious and illicitly constructed conditions, so that at the end of a chain of transactions, the ultimate taxpayer, manages to sell a motor vehicle encumbered with a much lower tax burden, than it actually should be.

g) Operation “OLD USURE”, carried out on 16.05.2022, focusing on a group of people who were dedicated to the practice of crimes of Usury, according to article 226 of the Penal Code, and illicit activity for receiving deposits and other refundable funds, pp art. 200 of the RGICSF, approved by DL 298/92. The authors benefited from the fact that one of the authors had a relevant social position, fulfilling previous public functions.

h) Operation “SPONGE BOB”, relating to the investigation into the commission of crimes of Tax Fraud, Scam Qualified, IT and communications fraud and money laundering. The investigation began with the identification of suspicious banking movements, in bank accounts held and/or controlled by targets, subsequently investigating the existence of requests for the return of funds and complaints of fraud presented by legal entities, based abroad.

i) Operation “FIATE 127”, the investigation began with the investigation of the receipt in bank accounts controlled by this organization, transfers from individuals and/or companies originating in bank accounts based abroad, corresponding to alleged acquisitions of assets or services, some of them relating to financial investments, which were demonstrated to be fraudulent (corresponding to computer fraud, consumer fraud and/or simple fraud). Posteriorly, the organization established an entire banking circuit whose sole purpose was to serve as a vehicle for the rapid transfer of amounts or benefits arising from the commission of illicit acts online and the acquisition of digital assets, which were later sold, receiving again the criminal offenses and their subsequent appropriation, with betting platforms also being used in this sense funds, already in fiat currency. From what was found, some of the fifteen individual defendants would make the criminal practice described a way of life, while others associated it with a professional activity this same practice is legitimate, and one of the organization’s leaders was free conditional on serving a sentence for crimes of the same nature.

To date, fifteen investigations are under investigation corresponding to financial flows exceeding two million euros. In this operation, with the presence of a judicial magistrate, there were seventy-three inspectors and experts from various structures of the Judicial Police were involved.

j) Operation “ADMIRAL”, carried out for the alleged commission of crimes of criminal association, fraud tax and money laundering and developed in coordination with foreign entities, under the auspices of EPPO, carrying out evidence collection procedures in Germany, France, Italy, Spain, Belgium, the Netherlands, Luxembourg, the Czech Republic, Hungary, Greece, Romania, Slovakia, Greece, Austria, Lithuania and Cyprus. Criminal activity was based on the successive constitution of a complex chain of companies, mostly with the corporate purpose of selling computer equipment in online platforms, which actually operated by carrying out the necessary acts to occupy themselves with the amounts of VAT received from the sale of these products to end customers, in a typical Missing scheme Trader Intra-Community (MTIC) Fraud, which harms the European Union’s coffers. At issue will be fraudulent transactions exceeding 2.2 billion euros.

Following the 95 home and non-home searches carried out in the municipalities of Porto, Matosinhos, Vila Nova de Gaia, Braga, Guimarães, Vila do Conde, Póvoa de Varzim, Coimbra, Figueira da Foz, Lisbon, Corroios, Vila Franca de Xira, Sintra and Funchal, fourteen individuals linked to the to this organization of transnational character and dimension, which were located in national territory.

The police operation involved around 250 members of the Judiciary Police from various departments, as well as 35 members of the Tax Administration, with the participation of a judicial magistrate and the European Prosecutor and two Portuguese Delegated European Prosecutors.

During the police operation, 21 vehicles, 31 of euros, as well as various documentation relating to the practice of the facts. The arrest was also carried out real estate and other luxury goods, computer equipment, money worth more than two million judicial, in Portugal, of 153 bank accounts, with an amount of €3,145,870.74.

k) Operation “VECTIGAL”, investigation in which suspicions of a scheme of acquisition of used vehicles in the European Community, contrary to Community legislation, resulting in its sale, the tax – VAT, was unduly altered so as not to be paid in the country of destination.

In 2022, most of the restrictions imposed by the COVID-19 pandemic came to an end, Therefore, the overall quantitative results demonstrated an evolution in relation to the years previous ones.

Thus, it was found that the number of arrests increased exponentially (115.79%) comparing with the previous year, (2020 with 20 detainees; 2021 with 19 detainees, 2022 with 41 detainees), maintaining the these, the application of a wide range of coercive measures, ranging from preventive detention, to to TIR.

The number of defendants constituted decreased by around 19.50% (239 defendants in 2020; 241 defendants in 2021, 194 defendants in 2022). Cash seizures, in turn, experienced a large increase, reaching almost 2 million Euros (around one million Euros in 2020 and 2021). And regarding the value of suspending debit banking operations and seizure of balances banking services, the same rose in 2022, still without definitive values and/or others to be determined, around of 24 million Euros.

As would be expected given the end of the pandemic constraints of previous years, the values of operational indicators had diversified increases. Thus in 2022, interceptions increased by around 31.97%, (2021 with 122 and 2022 with 161) while the number of searches suffered a slight increase of 5.35%, (2021 with 299 and 2022 with 315). The number of mixed teams formed remained stable (2021 with 15 and 2022 with 16) and there was a large increase of 41.17% in surveillances carried out (2021 with 549 and 2022 with 775).

It is also noted, in line with data from previous years, that 42.85% of completed surveys for crimes of a tax nature, during the year 2022, were sent to the Public Ministry with proposed indictment, an extremely positive percentage considering the complexity of the investigations.

From the completed investigations, taking into account data from previous years, elements sufficient evidence that confirms that the customs regime for suspending VAT on inter-community acquisitions of goods continues to constitute a preferential area for the development of fraud and that transactions with third countries tends to become an area of increased risk that justifies strengthening of fraud prevention measures. However, it appears that tax fraud is a crime that cuts across other economic and financial crime, such as corruption, money laundering, fraud in obtaining a subsidy and embezzling a subsidy, among others.

4.4.4. Republican National Guard

The Tax Action Unit (UAF) is a specialized unit, nationwide, responsible for continuation of the duties assigned to the Republican National Guard in the context of prevention, discovery and repression of tax, fiscal and customs infractions. In the “Guarda 2025” Strategic Plan, the strategic objective of the GNR was defined as “potentiating the areas of investigation and inspection of a tax, fiscal and customs nature”, constituting the aim of the Guard increase the fight against tax and customs infractions, by increasing its capacity to intervention and supervision and for greater qualification and specialization of the effective staff responsible for compliance of the tax mission.

In terms of tax prevention and inspection, the UAF, in 2022, committed 332 military personnel to matters of tax prevention and inspection, which led to the carrying out of 8,909 tax actions supervision within the scope of the road movement of goods and others, namely supervision in fairs, markets and establishments.

1,172,959 kilometers were covered by 8,142 investigation and inspection patrols during a total of 189,172 hours of commitment. In 2022, several training activities were provided to the Unit’s staff, either within the scope of called Continuous Training for Improvement and Update (FCAA), either within the scope of other specialization training actions, internal and external, in the areas of prevention and inspection taxes.

Participation in 06 training activities promoted by the Agency is highlighted of the European Union for Police Training (CEPOL) and 02 actions of the Organization for Cooperation and economic-financial crime.

Economic Development (OECD), in priority areas of combating tax fraud and In accordance with the provisions of the GNR Annual Training Plan (PAF) for 2022, it carried out if the 16th Fiscal Course for Guards, which constitutes specific training related to entry into the fiscal specialization of the Guard, having been attended by 25 (twenty-five) military personnel, during the 02/28/2022 to 05/20/2022, at the Figueira da Foz Training Center. Of the tax inspection activity carried out during the year 2022, the survey of 16,278 cases, which represents an increase of around 2.22% compared to 2021. The value of the seized merchandise corresponds to €9,799,893 of which €1,654,100 relates to Vehicle Tax (ISV), €7,083,410 to Tobacco Tax (IT), €578,351 to Alcohol Tax, Alcoholic Beverages and Beverages with Added Sugar or Other Sweeteners (IABA) and €5,432 relating to Tax on Petroleum and Energy Products (ISP) and Other Tax Offenses, with the minimum value of applicable fines amounting to approximately €5,214,300, which represents a increase of around 50.85% compared to 2021.

Compared to the previous year, there was also an increase of 27.56% in illicit acts under the Goods in Circulation (RBC). The infractions detected fall, fundamentally, into the following typology of situations:

• Failure to issue a transport document for RBC purposes and diverse in its processing; irregularities
• Failure to comply with the requirements for temporary admission of motor vehicles to the territory national, established by CISV;
• Failure to settle and pay the ISV upon introduction for consumption in the national territory of vehicles without national registration;
• Irregularities in the use of the reduced diesel tax benefit;
• Production and marketing of alcohol and alcoholic beverages outside the requirements established by the Special Consumption Tax Code (CIEC);
• Marketing of manufactured tobacco and alcoholic beverages in violation of safety standards sealing established by CIEC;
• Fraudulent introduction into national territory, beyond the control of the authorities customs, manufactured tobacco and tobacco leaf.

In 2022, 63,441 liters of ethyl alcohol and spirits subject to IABA were seized. 16,053,411 cigarettes and 5,737,000 grams of tobacco leaf and cut tobacco were seized thin (one gram is equivalent to a cigarette). 3,591 liters of products subject to ISP were also seized.

In 2022, a total of 21,598 pieces of counterfeit material were also discovered by the Guard, Of these, the UAF seized 11,832.

In implementing decisions by administrative and judicial authorities, 90,062.40 were destroyed liters of alcoholic beverages, 300 liters of petroleum products, 31,716 pieces of clothing, 300 pieces of footwear, 1,195 clothing items/accessories (wallets, watches and glasses), 1,012,385 cigarettes, 19,826.13 kg of tobacco leaf, 4 tobacco leaf crushing machine, 1 packaging machine, 1 machine tube tube, 155 refills for electronic cigarettes, 22 gaming machines, 10 posters exhibitors, 49 vehicles, 1 motorcycle and 2 boats.

With regard to tax and economic, criminal and misdemeanor investigations, in 2022 there were 5,6251 cases were investigated, which represents a 35.2% decrease in cases investigated compared to the year 2021.

Of the total number of cases investigated in 2022, 2,760 were carried over from 2021, 2,865 correspond to new entries with 2,969 completed. Within the scope of these investigations, fraud and evasion are estimated tax of €204,017,582.

In 2022, among other measures, 266 searches were carried out, 6,056 surveillance and follow-up actions on suspects, telephone interceptions carried out on 339 targets and 20 individuals were detained, of which 3 were in compliance with arrest warrants issued under investigations, with preventive detention being applied to 2 defendants.

The evidence gathered led to the constitution of 120 defendants for tax and economic offenses. With regard to asset and financial investigation procedures, the breach of secrecy is highlighted bank accounts to 591 bank accounts and the breach of tax secrecy to 150 natural and legal persons.

In 2022, UAF also carried out 917 digital forensic exams. With regard to international judicial cooperation, 11 European Decisions were issued Research (DEI) for Spain and Luxembourg.

In 2022, EUROPOL sponsored and operationally supported 2 investigation operations criminal activities carried out by the UAF.

In 2022, 13 mixed research teams were active, 12 with AT and 1 with other GNR units.

In 2022, in terms of criminal investigation, UAF investigators attended several courses and training actions, particularly in the areas of preventing and combating money laundering capital, collecting evidence in a digital environment, patrimonial and financial investigation and analysis of criminal information, in different national and international bodies, in this case, with particular highlighting the courses attended at CEPOL.

These courses were divided into three main areas: face-to-face training courses, carried out in several EU countries, long-term online courses and short-term online courses, these last ones on a webinar basis.

In pursuing its criminal investigation activity, it is worth highlighting the fact that UAF, in 2021, carried out of the following criminal investigation operations:

a) Operation “NICOTILLA”

The Fiscal Action Unit, through the Coimbra Fiscal Action Detachment under the direction of the Department of Investigation and Criminal Action (DIAP) of Aveiro, on February 16th, launched in collaboration with the Guardia Civil and Customs Surveillance Service, and with the operational support of EUROPOL, a police operation that resulted in the arrest of 08 individuals male, aged between 33 and 61, of Spanish nationality and Portuguesa, and the seizure of around two tons of various tobacco products.

As part of an investigation that had been going on for around a year and a half, the aim of which was to investigation of an international criminal organization, which was dedicated to the introduction and fraudulent marketing of crushed tobacco leaves, the National Republican Guard led to effect this operation with the aim of dismantling the structures dedicated to illicit commercialization of tobacco leaf and the collection of evidence on responsibility for its operationalization.

The objective was to control a marginal distribution and commercialization circuit in the territory nationally and in Spain, supported by a complex scheme of postal parcel shipments from the Kingdom of Spain, destined for distributors based in the national territory and oriented towards disguising content and hiding senders.

To this end, 27 search warrants were executed in national territory (09 searches home searches, 09 vehicle searches and 09 computer search warrants) and 06 search in the Kingdom of Spain (05 home searches and 01 non-domestic search), highlighting the following seizures:

• €37,800 in cash;
• Around 2250 kg of tobacco products;
• 520 packs of tobacco;
• Various machines used in drying, crushing and packaging food products tobacco (of which 5 manufacturing machines);
• 4 Scales;
• Various IT resources (mobile phones and hard drives);
• 3 weapons and various ammunition;
• Various raw materials used in illicit production and packaging, (1200 tubes for cigarettes, 200 packaging bags);
• Various relevant documentation.

During this investigation, and in 2021, approximately 7 tonnes of tobacco products of which around 2 tonnes were destined for Portugal, resulting in fraud estimated at an amount exceeding €163,260.00 (one hundred and sixty-three IEC and €37,260.00 (thirty-seven thousand two hundred and sixty euros), in terms of VAT. one thousand two hundred and sixty euros), being €126,000.00 (one hundred and twenty-six thousand euros), in terms of 3 (three) defendants of Portuguese nationality, aged between the ages of 30 and 61, accused of committing acts that could substantiate the crimes of Fraudulent Introduction into Qualified Consumption, Tax Fraud Qualified and possession of a prohibited weapon.

During the operation, 31 military personnel from the Fiscal Action Unit (UAF), 2 digital forensics teams from the Republican National Guard, also counting on the participation of EUROPOL elements, as well as elements of the Guardia Civil and Surveillance Service Customs.

b) Operation “LAST CLUCK””

The Fiscal Action Unit (UAF), through the Fiscal Action Detachment (DAF) of Coimbra, under the direction of the Central Department of Investigation and Criminal Action (DCIAP) and in conjunction with EUROJUST, on April 5th, in collaboration with the Guardia Civil and with the support EUROPOL’s operational team, triggered a police operation aimed at dismantling structures dedicated to the illicit production and marketing of tobacco products and the collection of proof of responsibility for its operationalization, culminating in the seizure of more than 10 tons of crushed tobacco, around a million cigarettes ready for sale, various production and packaging machinery and in the constitution of defendants of 10 citizens of Portuguese nationality and three Spanish nationalities, one of whom was arrested.

As part of an investigation that had been going on for around two years and which aimed to investigation of an international criminal organization, which was dedicated to the introduction and fraudulent marketing of various tobacco products, controlling a production circuit, distribution and marginal marketing in the national territory and in Spain, supported by a complex scheme for the production, packaging and marketing of tobacco products in Portugal and the Kingdom of Spain, destined for distributors based in national territory, oriented towards disguising content and hiding senders.

During the investigation, 25 search warrants were carried out in Portugal (14 homes and 11 in workshops, warehouses and commercial establishments) in the districts of Viana do Castelo, Porto and Braga and nine search warrants in the Kingdom of Spain, in provinces of Jaén, Córdoba and Seville, highlighting the following seizures:

• 144,000.00 euros in cash;
• More than 10,000 kilos of tobacco products;
• Around one million cigarettes;
• 12 machines used in the production and packaging of tobacco products, including:
• Six tobacco leaf crushing machines;
• Two machines for packaging packets and volumes of cigarettes.
• Four cigarette production machines;
• Three scales
• Various IT resources (mobile phones and hard drives);
• A gun and various ammunition;
• Raw materials used in illicit production and packaging, specifically:
• More than 300,000 printed cardboard packages for packaging cigarettes (packs and volumes);
• Various card printing models, with images referring to different brands tobacco.
• Around four kilos of cannabis;
• Ten vehicles;
• Two gambling machines;
• Various relevant documentation.

During this investigation, tobacco products were traded between Portugal and Spain, quantified at around 5.9 million euros worth of merchandise, resulting in fraud estimated at an amount exceeding 5.96 million euros in terms of Value Tax Added (VAT) and Special Consumption Tax (IEC).

Portuguese citizens constituted as defendants are indicted for committing acts that could be to substantiate the crimes of qualified fraudulent introduction into consumption, qualified tax fraud, possession of a prohibited weapon and illicit exploitation of games of chance.

The operation was reinforced by the Cinotechnical Intervention Group (GIC) of the Intervention (UI), by the Aveiro Territorial Command, and with the support of the Public Security Police (PSP), the Porto Municipal Police and the Campanhã Parish Council.

c) Operation “IBERIAN TOBACCO”

The Fiscal Action Unit (UAF), through the Fiscal Action Detachment (DAF) of Lisbon, and under the direction of the Department of Investigation and Criminal Action (DIAP) of Lisbon and in collaboration with the Guardia Civil of Badajoz, between June 27th and July 5th, he dismantled an illegal network selling crushed tobacco leaves, which operated in Portugal and Spain. As part of an investigation into the crimes of criminal association, qualified fraud and introduction fraud in qualified consumption, which had been going on for about a year, it was possible to determine the mode of operation of the group, as well as identifying the Portuguese and Spanish suspects involved and dismantle a vast organized network of international dimension that was dedicated to illegal marketing of tobacco products in Portugal and Spain, without paying taxes due to the respective States, such as the Special Consumption Tax (IEC) – Tax on Tobacco (IT) and Value Added Tax (VAT).

The operation aimed to dismantle the logistical bases for storage, treatment, packaging and distribution of tobacco products, including shredded tobacco leaf, as well as how to put an end to the ongoing criminal activity, which is presumed to have harmed economic interests of the Portuguese State worth more than one million euros.

During the course of the operation, in national territory, three warrants were complied with. arrest outside of flagrante delicto and 55 search warrants, 24 at home and 31 in warehouses, garages and vehicles. Following the action, various material was seized, highlighting the Following:

• More than 120 kilos of fine-cut tobacco leaf;
• Around 6,000 handmade cigarettes;
• Various machines used in crushing and packaging tobacco products;
• Various raw materials used in illicit production, such as cigarette tubes;
• More than 30,000 euros in cash;
• 17 light vehicles;
• Various computer equipment.

The operation culminated in the execution of the warrants and the arrest of three men, aged between 23 and 52, in the districts of Lisbon, Setúbal and Évora. Throughout the investigation that took place last year, a total of around 3.5 tons of tobacco products, namely tobacco leaf and fine-cut tobacco, and held four more people other than those already mentioned, who were directly related to the practice of illicit acts under investigation, whose tax provision is owed (IEC-IT and VAT) to the State Portuguese amounted to €712,477.50 (seven hundred and twelve thousand, four hundred and seventy-seven euros and fifty cents). 10 defendants were also constituted, with ages ranging from 23 and 62 years old, accused of committing acts capable of substantiating the crime of criminal association, fraudulent introduction into qualified consumption, qualified tax fraud and receipt of goods subject to customs crime. The detainees were present for their first interrogation at the Lisbon Judicial Court.

d) Operation “SAUDADE MARKET”

The Fiscal Action Unit (UAF), through the Porto Fiscal Action Detachment (DAF), in together with the Tax and Customs Authority (AT) and the Luxembourg Judicial Police, in the On September 8th, a police operation was carried out to combat and prevent illega tax nature, namely the crime of transnational tax fraud, within the scope of VAT and falsification of documents, in the districts of Porto, Braga, Viseu, Aveiro and in the Member State of Luxembourg.

During an investigation, it was possible to detect which food products were purchased by foreign companies, later verifying, in documentary terms, that the merchandise was issued to other Member States of the European Union, however, and in real terms, part of this merchandise did not leave the national territory and was sold at prices well below of the average market value. During the investigation, compliance with 15 search warrants, of which 11 in companies and vehicles and four in homes, where it was various documentation seized.

The investigation had been going on for approximately 4 years, and during that period of time, the turnover of suspected companies amounts to €130,000,000.00, (one hundred and thirty million of euros).

Five companies and six individuals, aged between 39 and 65 years old. The facts were communicated to the Judicial Court of Santa Maria da Feira. This action also included the reinforcement of the Territorial Commands of Viseu, Coimbra, Braga and Harbor.

e) Operation “LAST STOP” The Fiscal Action Unit (UAF), through the Fiscal Action Detachment (DAF) of Coimbra, on November 13, it seized 1,350,000 cigarettes and detained three men in the operation “LAST STOP” which took place in the municipality of Felgueiras, in the district of Porto.

During an operation dedicated to combating illicit tobacco trade, it was given execution of two home search warrants and seven search warrants in establishments, garages and companies, which resulted in the arrest of three men, with aged between 55 and 64, for committing the crime of fraudulent introduction in qualified consumption.

The operation resulted in the seizure of:

• 135 boxes, containing a total of 67,500 packs of cigarettes packed in volumes of ten packs each, totaling the seizure of 1,350,000 cigarettes;
• 30 packaging cards for tobacco volumes;
• 50,000 euros in cash;
• Four cell phones;
• Four vehicles;
• Four gaming machines;
• An internet switch;
• 120 liters of liqueur wine;
• Three liters of spirits.

As part of the investigation, the value of the seized merchandise will exceed €300,000.00 (three hundred thousand euros) and it is suspected that it was fraudulently introduced into consumption, tobacco products whose total tax benefit will amount to more than €700,000.00 (seven hundred thousand euros) in terms of value added tax (VAT) and excise taxes (IEC).

The detainees were made defendants and the facts were communicated to the Central Department of Investigation and Criminal Action (DCIAP) in Lisbon.

This police operation was reinforced by military personnel from the Intervention Unit, the Intervention Detachment (DI) from Porto and the Coimbra Territorial Command.

f) Operation “LAST STOP II”

The Fiscal Action Unit (UAF), through the Fiscal Action Detachment (DAF) of Coimbra, on December 15th, he seized 440,920 cigarettes and accused a 54-year-old man for fraudulent introduction into consumption, in the municipality of Vila Nova de Gaia.

During the “LAST STOP II” operation dedicated to combating illicit tobacco trade, it was three search warrants were executed, two at home and one in a vehicle, which resulted in the 54-year-old man being accused of committing the crime of fraudulent introduction for consumption, and the seizure of the following:

• 22,046 packs of cigarettes, corresponding to 440,920 cigarettes;
• Four cell phones;
• One vehicle;
• Accessory equipment for transporting and packaging tobacco boxes;
• Miscellaneous documentation.

The seizure prevented the fraudulent introduction into consumption of tobacco products whose supply total tax would amount to more than 86,000 euros in terms of value added tax (VAT) and excise taxes (IEC). In turn, the value of the seized merchandise will exceed 115,000 euros.

The facts were communicated to the Central Department of Investigation and Criminal Action (DCIAP) From the investigation actions carried out by the UAF, carried out within the scope of 5 investigations, it was possible upload evidence to the records that enabled the Public Prosecutor’s Office to accuse, in 2022, 16 defendants for practice of:

• 2 customs crimes, of fraudulent introduction into the consumption of tobacco;
• 10 crimes of qualified tax fraud;
• 22 crimes provided for in the Penal Code, criminal association, active and passive corruption, money laundering and personal favoritism practiced by an employee.
• 23 crimes of illegal exploitation of gambling and illicit exploitation of sports betting at the base quota territorial.

From the investigation actions carried out by the UAF, carried out within the scope of 4 investigations, it was possible put evidence in the records that enabled the courts to judge and convict 18 defendants in the year 2022 by:

• 5 customs crimes, tobacco smuggling;
• 1 crime of tax fraud;
• 22 crimes under the Penal Code, namely criminal association, active corruption and passive, money laundering and personal favoritism practiced by an employee;
• 20 crimes of illegal exploitation of gambling and illicit exploitation of sports betting at the base quota territorial;
• 1 crime of counterfeiting, imitation and illegal use of a trademark.

In 2016, the Operational Coordination Group (GCO) was implemented, provided for in article 8 of the Protocol of 2012, celebrated between the Guard and the AT, an instrument that aimed to articulate the forms of coordination and cooperation between both institutions, at an operational level, in terms of exchange of information, prevention and investigation of tax offenses, as well as professional training.

The GCO, made up of two representatives from each of the aforementioned entities, was the mechanism related to operational support and the operationalization of information exchange, has been working established by the aforementioned Protocol for programming, coordination of mixed teams, issues regularly, since 2016, under the terms established by the aforementioned Protocol, either through meetings ordinary quarterly meetings, or with the holding of extraordinary meetings, mainly to deliberate on the creation of mixed research teams.

In turn, the publication of Ordinance No. 388/2019 of October 28 consolidated in its article 9, the GCO and created the Strategic Coordination Group (GCE). Thus, in 2022 and at GCO level, three meetings were held, two in person (March and October) and one held remotely, via telematic means (June). The meetings resulted in corresponding minutes.

At the same time, and because trust in public services is based, to a large extent, on the need for individuals to have an adequate level of access to exercise their rights and to fulfill its obligations in its relationship with the State, the aim of strengthening the relationship of trust and proximity established between its bodies and citizens involves, necessarily, the adoption of administrative simplification and modernization measures, which were, in particular, the aim of the SIMPLEX Program.

The detection of infractions within the scope of inspection actions undertaken by the UAF, triggers, in in accordance with the legal provisions in force regarding the processing of procedures administrative offense, a flow of processes between various bodies of the Central Administration of the State, namely between the GNR, supervised by the Minister of Internal Administration, and the Services Tax professionals integrated into the Tax Authority (AT), supervised by the Minister of Finance, who compete to the bureaucratization of processes and losses of efficiency.

In this context, the dematerialization of the UAF tax administrative offense procedure, through the implementation of the Tax Administrative Offenses System (SCOF), was and continues to be a project strategic and structuring framework for the UAF and the Guard, constituting one of the technological innovations fundamental to changing the paradigm of tax inspection developed by UAF. The implementation of SCOF simultaneously satisfies simplification and modernization imperatives administrative and the requirement for an increase in the effectiveness of tax inspection, currently developed in a context of more sophisticated and complex threats, at the same time that it will facilitate and improve information exchange between GNR and AT.

The completion of this project involved the implementation of two essential components and complementary:

• An automated and unbureaucratic communication channel between GNR/UAF and AT for electronic transmission of news reports collected by the UAF, through the creation of a web service;
• An aspect of mobility, with the necessary allocation of technological means, inspired by operating principles of the Traffic Offenses System, which aims to create of the electronic car and its creation completely dematerialized by the UAF military who, on the “field”, they carry out tax inspection actions.

The dematerialization of the tax administrative offense procedure, with its electronic and fully automated, it was developed by a joint team from GNR and AT, with the main goals:

• Increased efficiency and quality in the performance of the tax administration and the UAF – the computerization of the procedure aims to reduce time in preparing the file, reducing of printing and postal shipping costs, a greater speed of the process and a reduction in time spent providing face-to-face service to the public, made possible by the use of tools online, and an increase in transparency in the relationship with citizens.
• And the modernization and readjustment of tax inspection procedures – the aim is to obtain gains in efficiency and effectiveness in UAF activity by making the information collected profitable, in an automated manner, within the scope of inspection actions, taking into account the selectivity of controls on goods in circulation with an increasingly sustained approach to risk analysis, consequently, less intrusive and more capable of achieving greater fraudulent conduct seriousness and increasing the perception of the risk of discovering criminal practices aimed at evasion and tax fraud.

Despite the constraints caused by COVID19, which resulted in delays in development of the project, began and was successfully completed in the second half of 2020, the transmission tests of the files in a real situation for AT, with the entry into production of the dematerialized transmission of the tax infraction notice, within the scope of the Goods Regime in Circulation (RBC), for AT if started on the first day of 2021.

As part of the project’s continuation, we are now awaiting the dematerialization of administrative offense records in the context of infringements of the Vehicle Tax Code (CISV) and the General Infractions Regime Tax (RGIT).

The GNR Organic Law (LOGNR), approved by Law no. 63/2007, of November 6, establishes that the functional link between the UAF and the Ministry of Finance (MF), in order to allow compliance with the tax mission of the Guard, is regulated by joint MAI/MF decree (no. 3 of art. 53 and no. 2 of art. 13th of LOGNR).

With the publication of Ordinance No. 388/2019, of October 28, the connection was defined and established functional between the GNR and the Tax Authority. However, in terms of information exchange, in terms of specifically concerns the provision of tax, fiscal and customs information, necessary for carrying out prevention and investigation activities within the scope of UAF’s responsibilities, makes if it is still necessary to approve the protocols provided for therein.

In effect, it is necessary to approve and publish the protocol provided for in paragraph 2 of article 5 of Ordinance no. 388/2019, of October 28, for the regulatory framework to be completed, which is why the UAF does not yet have access to the tax information essential to the exercise of its legal powers in the scope of tax prevention and inspection. During the year 2022, work was carried out between GNR and AT, in order to define the necessary and indispensable access to tax information, which allows UAF to develop its work within the scope of its legal responsibilities, which work is in the process of being completed, AT is currently finalizing the information access protocol and adding the project on the new operators. Even so, the approval of the aforementioned protocol did not occur in 2022, and it is expected that this could occur at the beginning of 2023.

Conclusions

In 2022, through the UAF inspection system, 16,278 infractions were detected, with a increase of 2.22% compared to the previous year. In terms of infractions, the illicit acts under the Goods in Circulation Regime are those that had the greatest expression quantitative, in which there was an increase of 27.56%, compared to 2021. The value of goods seized in tax inspection activities increased by 50.85% in 2022 relative to the year 2021.

In 2022, 5,625 cases were investigated by the UAF criminal investigation structure administrative and criminal offenses, which represents a decrease of 35.2% compared to the year 2021.

As in previous years, there was a need to allocate resources, diverted from the tax inspection, to respond to requests for tax processes of high complexity, due to the organized nature and transnational dimension of the illicit acts investigated, adding to the procedural urgency given the existence of defendants subject to coercive measures depriving their liberty in some of these processes.

Although there was an effort, materialized in the continuation of the negotiation process for the regulation of the Ordinance that establishes the functional connection of the GNR to the MF, through the celebration regulatory protocol of the aforementioned Ordinance, to implement UAF’s access to information tax relevant to the exercise of its tax prevention and inspection activities, even it was not possible to conclude. However, it is expected that the same will occur at the beginning of the 1st quarter 2023.

The project to dematerialize the tax notice remains ongoing and has been completed for the fiscal aspect (entry into production of the dematerialized transmission to the AT of the news reports for illegal administrative offenses for infractions of the Goods in Circulation Regime – 01/01/2021), but not having evolved to the customs aspect (ISV, IT, IABA, ISP) in 2022.

4.5. Acting within the legislative scope

In 2022, Decree-Law no. 44/2022, of July 8, stands out, which amended article 19 of the LGT. In this sense, it is now possible for taxpayers required to appoint tax representation which, in alternative, simply adhere to a dematerialized notification channel, be it the public service electronic notifications associated with the unique digital address (MUD), the notification and summons regime electronic mail on the Finance Portal or electronic mailbox.

It should be noted that, for this purpose, two distinct situations were disaggregated:

(i) the mandatory designation of a tax representative for taxpayers residing in the foreigner or who are absent from national territory for more than six months; and, just like that,

(ii) mandatory subscription to the electronic mailbox for IRC taxpayers with activity in Portugal or for resident taxpayers covered by the normal VAT regime.

Following the legislative change to the aforementioned article 19 of the LGT, AT published the new understanding, through Circular Letter No. 90,057, of July 20, 2022, relating to the scope of application of mandatory appointment of a tax representative of the non-resident and the situations of exemption from said obligation, when taxpayers adhere to any of the notification channels dematerialized.

As a result of the recent armed conflict taking place in Ukraine, under paragraph 3 of art. 4th of Law No. 67/2003, of August 23, through Resolution of the Council of Ministers No. 29-A/2022, in the wording given by Resolution of the Council of Ministers no. 29-D/2022, it was determined to grant temporary protection, with the automatic granting of a residence permit, for a period of one year, with the possibility of extending the respective residence permit, in accordance with article 7 of Law no. 67/2003, of August 23, to national citizens of Ukraine and foreign citizens of other unable to return there, as a result of the war situation that occurs there. nationalities or stateless persons benefiting from international protection in Ukraine, coming from that country,

In this sense, it was foreseen that the relevant data contained in the declaration supporting the application of temporary protection, for the purpose of automatically assigning the security identification number social security number, tax identification number and national user number, respectively, are communicated by SEF to ISS, AT and SPMS, preferably, by electronic data transmission, in respect of the general data protection regime, in accordance with paragraphs 7 and 9 of the Resolution of the Council of Ministers No. 29-A/2022, in its current wording.

5. 2022 BALANCE SHEET

The year 2022 was marked by the military conflict in Ukraine, which began in February, which led to new socioeconomic challenges. In this context, in addition to its traditional attributions, AT was more once called for the operationalization of social support and implementation of fiscal measures decreed by the Government.

In the tax sphere, the changes resulting from Law No. 7/2021 were implemented, having with a view to strengthening taxpayer guarantees and promoting voluntary regularization within the framework inspection.

On the one hand, the considerable increase in alerts and declarative controls, as well as the improvement and the capacity of taxpayer service channels, constitute strategic measures of promoting and supporting voluntary compliance. On the other hand, the performance of the inspection action continued to be directed towards combating highly complex fraud and the informal economy, also having the identification and detection of fraudulent conduct has been maintained, as well as the identification of schemes of abusive tax planning.

In this context, there was significant growth in tax revenue, higher than the growth in economic activity, without there having been an increase in the incidence or rates of the main taxes, showing – among other factors – an increase in voluntary compliance with
tax obligations.

To obtain such results, we highlight the commitment of professionals who contribute daily to support taxpayers, to promote voluntary compliance and, specifically, to combating tax and customs fraud and evasion.

In a transversal way, the phenomenon of globalization, combined with the post-pandemic context, has accelerated further the process of digitalization of the economy, leading to greater internationalization and proliferation of new business models, also enhancing the development of new types of fraud and tax base erosion mechanisms, posing new challenges for tax and customs administrations.

The fight against fraud and tax and customs evasion thus increasingly takes on a global dimension, therefore the extensive use of information from international information exchange, as well as as instruments of international administrative cooperation and mutual assistance, each increasingly decisive for the rapid detection, correction and accountability of behaviors defaulters/fraudsters and to guarantee tax revenue.

Cooperation between the various bodies with inspection or police functions, national and international, also represents an important contribution to the success that has been achieved in the fight against fraud and tax evasion, since the visibility of the joint action of the various entities translates into a strong deterrent effect.

On the customs side, the current context has reinforced the importance of fulfilling its mission of ensure the control and security of its border, particularly regarding the implementation and evaluation of countermeasures aimed at preventing and detecting situations of circumvention or evasion of measures restrictions implemented by the European Union, particularly those resulting from the war in Ukraine.

Overall, the strategy that has been implemented has contributed to strengthening a relationship of trust and cooperation between AT and citizens and economic operators, a fundamental pillar in a modern society, with a focus on greater awareness of citizenship and literacy taxation for future generations.