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European Commission

Press release

Brussels, 23 January 2014

Taxation: Commission refers Portugal to Court over exit taxation for individuals

The European Commission has decided to take Portugal to the EU Court of Justice for discriminating against taxpayers which cease to be tax resident there. The Commission considers such provisions to be incompatible with their right to free movement set out in the Treaties.

Under Portuguese tax law, taxpayers no longer resident in Portugal are subject to immediate taxation in case of exchange of shares. Taxpayers are also taxed immediately in case of transfer to a company located abroad of assets and liabilities related to the exercise of an economic or professional activity.

The Commission considers that such immediate taxation penalises those persons who decide to leave Portugal or transfer assets abroad, by introducing less favourable treatment for them in comparison to those who remain in the country or transfer assets to a resident company. Indeed, taxpayers who cease to be resident in Portugal are taxed on the value of their assets at this given moment regardless of the future evolution of the value of their assets, while taxpayers who remain resident in Portugal would be taxed only once the assets would be realised on their value at the time of realisation.

The Portuguese rules in question are therefore likely to dissuade individuals from exercising their right of free movement and, as a result, constitute a restriction of Articles 21, 45 and 49 TFEU and the corresponding provisions of the EEA Agreement.


The Commission sent a reasoned opinion to the Portuguese Authorities on 3 November 2009 and 22 November 2012 formally requesting the Portuguese authorities to amend this legislation (IP/09/1635). The response given by Portugal to these reasoned opinions was not considered satisfactory.

The Commission's opinion is based on the EC Treaty as interpreted by the Court of Justice of the European Communities in its judgment of 11 March 2004, in Case C-9/02, De Lasteyrie du Saillant, as well as on the Commission's Communication on exit taxation (COM(2006)825 of 19 December 2006).

The Commission's case reference number is 2007/2381.

Useful links

On the January infringement package decisions, see MEMO/14/36

On the general infringement procedure, see MEMO/12/12

For more information on infringement procedures:

Contacts :

Emer Traynor (+32 2 292 15 48)

Franck Arrii (+32 2 297 22 21)

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