Portugal Gazettes Supreme Administrative Court Judgment Clarifying VAT Deduction Exclusions Under EU Standstill Clause

The Portuguese Official Gazette June 4 published Supreme Administrative Court Judgment No. 6/2025, clarifying the application of the standstill clause under the EU VAT Directive to VAT deduction exclusions. The taxpayer, a Swiss company, was involved in the production and marketing of motor vehicles and related products. The company challenged the Portuguese Tax Authority’s partial rejection of a VAT refund related to expenses incurred during a promotional event for a new car model. The Tax Authority claimed that the exclusions were not covered by the standstill clause. The Supreme Administrative Court held that: 1) the standstill clause covered the VAT ...