Supreme Court Clarifies Standstill Clause on VAT Deductions for Swiss Company in Portugal

• The Portuguese Official Gazette published a Supreme Administrative Court Judgment on June 4, 2025.
• The judgment clarifies the application of the standstill clause under the EU VAT Directive.
• The case involved a Swiss company in the motor vehicle industry.
• The company challenged the Portuguese Tax Authority’s partial rejection of a VAT refund.
• The Tax Authority argued that the exclusions were not covered by the standstill clause.
• The Supreme Administrative Court ruled that the standstill clause covered VAT deduction exclusions at Portugal’s EU accession.
• The clause allows Member States to maintain pre-accession VAT exclusions until EU rules are adopted.
• The Portuguese VAT Code complies with EU law by using the standstill clause to exclude certain expenses from deduction.

Source: news.bloombergtax.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

---

---