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Application no. 51736/20
against Portugal

The European Court of Human Rights (Fourth Section), sitting on 7 February 2023 as a Committee composed of:

Tim Eicke, President,
Branko Lubarda,
Ana Maria Guerra Martins, judges,
and Crina Kaufman, Acting Deputy Section Registrar,

Having regard to:

the application (no. 51736/20) against the Portuguese Republic lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) on 20 November 2020 by a Portuguese company, Paulo Oliveira, SGPS, S.A. (“the applicant company”), which was founded in 2001 and is registered in Covilhã and which was represented by Mr D. Ortigão Ramos, a lawyer practising in Lisbon;

Having deliberated, decides as follows:


1. The applicant company is a holding company belonging to the Oliveira family and operating in the textile industry.

2. In June and September 2009, the applicant company acquired 85.5% of the shares of P.O., a company which also belonged to the Oliveira family, for the sum of 91,892,075 euros (EUR). In December 2010, it acquired an additional 4.5% of this company for nearly EUR 20,000,000.

3. In 2013 the tax authority decided to conduct an inspection in order to ascertain whether the acquisition by the applicant company of 90% of the shares in P.O. constituted a fraudulent arrangement within the meaning of section 38(2) of the General Tax Law and in particular the anti-abuse clause, and whether the arrangement was intended to allow those selling shares in P.O. to avoid income tax since the capital gains resulting from these sales were exempt from taxes whereas the dividends were taxable.

4. On 2 January 2014 the final inspection report was delivered to the applicant company. It concluded that the applicant company had breached the anti-abuse clause by failing to deduct income tax for the year 2010 from the sums paid to shareholders in respect of dividends that they had received.

5. On 20 January 2014 the tax authority ordered the applicant company to pay EUR 6,197,119 in respect of the tax assessment for 2010, which it paid in order to avoid enforcement against it. In addition, the applicant company challenged the decision of the tax authority in the Administrative Arbitration Centre (Centro de Arbitragem Administrativa).

6. On 22 May 2015 the Administrative Arbitration Centre ruled against the applicant company.

7. The applicant company appealed against that decision to the South Central Administrative Court, claiming that one of the members of the Administrative Arbitration Centre panel had a conflict of interest and so could not act as such, and that the decision should therefore be annulled.

8. On 21 May 2020 the South Central Administrative Court dismissed the applicant company’s appeal.

9. Under Article 1 of Protocol No. 1 to the Convention, the applicant company complained of the lack of foreseeability of the anti-abuse clause and of the obligation to pay taxes on the income of the sellers of shares in P.O.


10. The Court reiterates that in assessing whether an applicant has complied with Article 35 § 1 of the Convention, it is important to bear in mind that the requirements contained in that Article concerning the exhaustion of domestic remedies and the six-month period are closely interrelated (see Jeronovičs v. Latvia [GC], no. 44898/10, § 75, 5 July 2016, and Lekić v. Slovenia [GC], no. 36480/07, § 65, 11 December 2018).

11. In the present case, the applicant company’s complaints concern the lack of foreseeability of the anti-abuse clause and the order to pay taxes as a consequence thereof (see paragraph 9 above). The Court observes that the appeal lodged by the applicant company against the decision of the Administrative Arbitration Centre of 22 May 2015 did not concern the merits of the decision but the composition of the panel of the Administrative Arbitration Centre. Besides, it notes that pursuant to sections 27 and 28 of the Legal Framework for Arbitration in Tax Matters (Decree no. 10/2011 of 20 January), the decision of the Administrative Arbitration Centre could not be challenged by means of an appeal to the Central Administrative Courts. Accordingly, the South Central Administrative Court’s decision of 21 May 2020 (see paragraph 8 above) cannot be taken into account for the calculation of the six-month period. Therefore, in the present case the final decision within the meaning of Article 35 § 1 of the Convention is the decision of the Administrative Arbitration Centre of 22 May 2015, rendered more than six months before the date on which the application to the Court was lodged (20 November 2020).

12. In view of the foregoing, the Court considers that the application was lodged out of time and must be rejected pursuant to Article 35 §§ 1 and 4 of the Convention.

For these reasons, the Court, unanimously,

Declares the application inadmissible.

Done in English and notified in writing on 9 March 2023.

Crina Kaufman Tim Eicke
Acting Deputy Registrar President