After several defeats in court, the Tax Authorities will now restore benefits to anyone whose disability review is below 60% by December 31, 2023.
The Tax and Customs Authority (AT) retreated from the understanding it had applied for years regarding the loss of tax benefits for taxpayers with a multipurpose certificate whose disability was revised below 60%.
The change came after the tax authorities suffered successive defeats in court and is formalized in a letter dated April 16, which recognizes the need to align administrative practice with consolidated jurisprudence.
At issue were thousands of taxpayers, including many cancer patients, who, after initially obtaining a degree of disability equal to or greater than 60%, saw this percentage reduced in a mandatory reevaluation after five years. Although the law provides for the “most favorable assessment principle”, allowing tax benefits to be maintained, the AT argued, based on an internal circular, that these benefits only applied in the year of review.
Courts, including the Supreme Administrative Court and the Constitutional Court, have consistently ruled in favor of taxpayers. In view of this “reiterated jurisprudence”, the AT decided to review its guidelines. Thus, citizens whose first revaluation took place by December 31, 2023 are now able to maintain the tax regime corresponding to the disability initially attributed, as long as the reduction refers to the same pathology, says the .
However, the decision does not cover all cases. For reviews carried out from January 1, 2024, the new regime provided for in the Union Budget of that year applies. This establishes a four-year transitional period for taxpayers with disabilities between 20% and 60%, during which tax benefits are progressively reduced. The result is the creation of two distinct treatments for similar situations.
Another controversial point is the lack of automatic regularization. Affected taxpayers will have to request recognition from the AT and file substitute income tax returns or other legal mechanisms.
The Ministry of Finance argues that the information was made available on the Finance Portal, but does not clarify whether there will be ex officio corrections.
