The Government realised the regime needed revising, but lacked the courage to see it through. Getting onto the list remains easier than getting off it.
The Government announced a revision of the Portuguese list of countries, territories, and regions with a clearly more favourable tax regime, with a seductive argument: to align Portugal with European standards and modernise the fight against tax evasion. Many interpreted this announcement as the start of a necessary and long-demanded change: replacing the Portuguese tax haven list (one of the most extensive in Europe, with 77 jurisdictions) with a model more coherent with the international framework (note that the European list considers only 10 jurisdictions).
The expectation was simple: less arbitrariness, more predictability, and greater alignment with the European Union. However, the legislative proposal reveals a rather different reality. Instead of bringing Portugal closer to the European list of non-cooperative jurisdictions, the Government chooses to keep the logic of the current system intact, adding only new layers of complexity. There is no substitution of the Portuguese list with the European one. Instead, it states that the European list should also be included. This, then, is not a substitution, but rather an accumulation.
In practice, Portugal continues to reserve for itself the power to maintain or include jurisdictions that are not considered problematic by the European Union. The promised convergence thus becomes a mere overlapping of criteria.
Most curious of all is that the explanatory memorandum of this proposal uses arguments that would point precisely towards the opposite solution. It speaks of predictability, objectivity, international alignment and legal certainty. Yet when we reach the concrete provisions, we find exactly the contrary. More indeterminate concepts, more subjectivity and more room for divergent interpretations.
The proposal now gives weight to elements such as the existence of adequate economic substance, potential situations of double non-taxation, double deduction or deviations from internationally accepted standards. These are familiar concepts in contemporary tax discourse. The problem is not their relevance, but rather the way they are used.
Legal certainty requires clear criteria. A company, or an investor, must be able to anticipate the tax consequences of their decisions. When criteria rest on broad and subjective concepts, predictability decreases and uncertainty increases. And uncertainty is one of the greatest enemies of investment.
There is also a deeper contradiction. Portugal is a country that seeks to attract foreign investment, decision-making centres, international talent and business groups. At the same time, it continues to maintain one of the most aggressive approaches in Europe regarding tax-privileged jurisdictions, imposing on operations with entities located in these territories a particularly heavy set of tax penalties.
It is one thing to combat abusive structures. It is quite another to create generalised presumptions of suspicion that end up affecting perfectly legitimate situations.
A serious reform should draw a better distinction between abuse and genuine economic activity. It should favour analyses based on concrete facts rather than generalisations. It should adopt transparent, automatic and verifiable entry and exit mechanisms.
But not even on this point does the proposal appear to innovate. New grounds are introduced for including jurisdictions, but there is still no truly objective mechanism for their removal. Getting onto the list remains easier than getting off it.
Particularly questionable, too, is the reference to the assessments of the Financial Action Task Force as a relevant element in drawing up the national list. The fight against money laundering is essential. However, money laundering and international taxation are not the same reality. Mixing the two planes may produce more noise than clarity.
The final impression is hard to avoid: the Government realised the regime needed revising, but lacked the courage to see it through, opting to update the terminology, import new international concepts and preserve the complexity of the existing structure. Once again, in political discourse, the aim was to simplify. In the legislative text, the result appears to be exactly the opposite.
