Experts advocate new 20-year maximum for tax debt statute of limitations even with interruptions

Experts from the tax reform commission argue that tax debts should expire after 20 years, even when there are interruptions and suspensions in the counting of the term.

The report prepared by the Commission for the Review of the Tax Process and Procedure and Taxpayer Guarantees was presented this Monday at a conference organized by the Ministry of Finance.

The group, chaired by lawyer Rogério Fernandes Ferreira, proposes defining in the General Tax Law (LGT) a maximum limitation period of 20 years, even when there are reasons that interrupt or suspend the count.

The amendment proposed to the Government concerns situations in which the limitation period for tax debts is already longer than the normal period, as the general rule continues to be that tax debts are time-barred within eight years, counting, in the case of periodic taxes, from the end of the year in which the taxable event occurred.

This is the case with tax debts, where the taxable event is related to a tax haven or when a bank account located in a bank in another European Union country or outside the community area has not been declared in the IRS to the Tax and Customs Authority (AT).

In these situations, the time for the tax authorities to collect the tax is longer and, therefore, the limitation period is also longer, extending up to 15 years, a period that is also maintained in the proposal. However, the committee's experts propose that "regardless of the prescriptive period provided for and the occurrence of suspensive or interruptive facts, the tax debt will expire whenever 20 years have passed since the initial term of the limitation period."