The European Commission is to take Portugal to the EU Court of Justice for tax rules which the Commission alleges discriminate against taxpayers who cease to be tax resident in Portugal. According to the Commission, Portugal imposes an immediate tax on exchanges of shares and certain transfers of assets and liabilities abroad when a taxpayer changes residency from Portugal. The Commission considers such provisions to be incompatible with the right to free movement as set out in the TFEU and the corresponding provisions of the EEA Agreement.

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. 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 the TFEU and the corresponding provisions of the EEA Agreement in the Commission’s view.

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. The response given by Portugal to these reasoned opinions was not considered satisfactory.