On 19 September 2019, the Portuguese Official Gazette published a Law no. 120/2019, the new law establishes dispute settlement mechanisms involving the competent authorities of Portugal and other Member States of the European Union as a result of the interpretation and application of international agreements and conventions to avoid double taxation of income, transposing Directive (EU) 2017 / 1852 of the Council of October 10, 2017. The law includes the following measures:
- Defining individuals and entities eligible for the dispute resolution mechanism;
- Requiring initiation of the procedure within three years from the receipt of the first notification of the dispute;
- Implementing procedures to begin, dismiss, and withdraw complaints;
- Implementing a timeline for the tax authority to complete the required steps; and
- Establishing an advisory committee or an alternative dispute settlement committee to resolve disputes.
The measures apply to disputes filed from 1 July 2019 in relation to tax years beginning on or after 1 January 2016.
