In the proceeding against the Portuguese Republic, the ECJ highlighted the fact that the taxpayers’ obligation to appoint a tax representative requires them to submit additional paperwork and pay administrative costs which could dissuade them from undertaking investments in other member states.
Furthermore, the ECJ explained, in response to Portugal’s defense, that they cannot base the obligation to name a tax representative on the effort to guarantee tax controls and fight tax evasion since, in the Court’s opinion, there are already adequate measures such as the directives on Mutual Assistance between the tax authorities of the different EU member states in place for this end.
The Kingdom of Spain submitted arguments in the proceedings as a third party to the action. It is worth noting that there are open proceedings against Spain before the ECJ relating to the obligations established by the Spanish tax rules for appointment of a tax representative under certain circumstances, and which might possibly have the same outcome as the current proceedings against Portugal.
For further information, please contact Gustavo Yanes: [email protected]