European Court of Justice Issues Preliminary Ruling on Portuguese Capital Gains Tax Rules

The European Court of Justice (ECJ) Nov. 16 issued a preliminary ruling for Case No. C-472/22, on Portuguese capital gains tax rules. The taxpayer was a French national residing in Portugal and tax resident there. He transferred his shares in a French company regarded as a “small enterprise,” while continuing to be a majority shareholder, to another French company. On transfer date, he was a majority shareholder in the latter company. The Portuguese Tax and Customs Authority calculated tax on the entire capital gain, refusing the 50 percent reduction in tax for transfers of shares in micro, small, and medium-sized ...