Process: 786/2015-T

Date: June 26, 2016

Tax Type: IRC

Source: Original CAAD Decision

Summary

This CAAD arbitration decision (Process 786/2015-T) addressed whether Portuguese subsidiaries of a non-resident EU parent company could apply the Special Regime for Group Taxation (RETGS - Regime Especial de Tributação de Grupos de Sociedades) under IRC for tax year 2012. Three Portuguese companies (A, B, and C) belonging to an Italian parent company (D... S.p.A.) challenged IRC assessments that denied them RETGS benefits. At the time, Article 69(3)(a) of the IRC Code required the dominant company to be tax resident in Portugal, effectively excluding cross-border EU groups from tax consolidation benefits available to domestic groups. The claimants argued this restriction violated the EU freedom of establishment principles under the TFEU, citing CJEU jurisprudence recognizing discriminatory treatment of cross-border corporate structures. They filed administrative claims in May 2015 seeking retroactive application of RETGS to 2012, which were tacitly denied. The Tax Authority defended the assessments, arguing that: (1) the claimants failed to exercise the RETGS option within the legal deadline for 2012; (2) EU jurisprudence lacks retroactive effect; and (3) the special regime required explicit procedural compliance. This case highlights the tension between Portuguese domestic tax law restrictions and EU fundamental freedoms, particularly regarding fiscal neutrality for cross-border group structures. The Portuguese legislature subsequently addressed this issue through Law 82-C/2014, which introduced horizontal consolidation allowing RETGS application where the parent is non-resident but EU-based, effective from 2015. The case demonstrates how CAAD arbitration serves as a mechanism to challenge discriminatory tax treatment and ensure compliance with EU law principles in Portuguese corporate taxation.

Full Decision

ARBITRATION DECISION

1. Report

A…, S.A., legal entity no. …, with registered office at Rua …, no. …, …, in ..., (hereinafter referred to as "A…");

B…, S.A., legal entity no. …, with registered office at …, …, …, no. …, in ..., (hereinafter referred to as "B…");

C… – Sole Proprietor Limited Liability Company, legal entity no. …, with registered office at Rua …, no. …, …, in ..., (hereinafter referred to as "C…");

came, pursuant to article 2, section 1, paragraph a), and articles 10 et seq. of the Legal Regime for Tax Arbitration, provided for in Decree-Law no. 10/2011, of 20 January, as amended by article 228 of Law no. 66-B/2012, of 31 December (hereinafter abbreviated as "LRTA") and articles 1 and 2 of Order no. 112-A/2011, of 22 March, to submit a request for an arbitration decision on the legality of the acts of assessment of Corporate Income Tax nos. 2013…, 2013…, and 2013…, relating to the tax year 2012.

The Tax and Customs Authority is the respondent.

The request for constitution of the arbitral tribunal was accepted by the President of the CAAD and automatically notified to the Tax and Customs Authority on 29-12-2015.

The Claimants did not proceed with the appointment of an arbitrator, whereupon, in accordance with the provisions of paragraph a) of section 2 of article 6 and paragraph b) of section 1 of article 11 of the LRTA, the President of the Ethics Council of the CAAD appointed the undersigned as arbitrators of the collective arbitral tribunal, who communicated their acceptance of the appointment within the applicable time limit.

On 16-02-2016, the parties were duly notified of such appointment and did not manifest any intention to refuse the appointment of the arbitrators, in accordance with article 11, section 1, paragraphs a) and b) of the LRTA and articles 6 and 7 of the Ethics Code.

Thus, in accordance with the provision of paragraph c) of section 1 of article 11 of the LRTA, the Arbitral Tribunal was constituted on 08-03-2016.

Duly notified, the Tax and Customs Authority submitted its response in which it defended the dismissal of the request, raising objections and challenges.

On 25-05-2016, the hearing referred to in article 18 of the LRTA took place, at which time the objections were decided, which were dismissed, followed by oral arguments by the parties, reiterating and developing their respective legal positions.

The date of 31 July was set for the pronouncement of the final decision.

The Claimants request that the illegality and consequent annulment of the Corporate Income Tax assessments nos. 2013…, 2013…, and 2013…, relating to the tax year 2012, be declared, arguing in summary:

a) The Claimants are societies governed by Portuguese law, subject to the general regime of Corporate Income Tax and integrated into an economic group dominated by the society D…S.p.A., a society governed by Italian law and resident in Italy.

b) The Claimants submitted, on 31.05.2013, Form 22 Declarations of Corporate Income Tax, relating to the tax year 2012, determining, for A…Portugal and B… taxable profits in the amounts of €1,547,814.63 and €21,471.47 respectively, and for C…, a tax loss of €4,939,833.63, and were taxed individually because, under the terms of the internal legislation in force at the time – article 69, section 3, paragraph a) of the Corporate Income Tax Code (CITC), the option for the Special Regime for Group Taxation (SRGT) was not legally permissible, since the controlling company – D…S.p.A., was not resident in Portuguese territory for tax purposes.

c) Contrary to the jurisprudence and legislation of the European Union, as far as this matter is concerned, in Portugal it was only possible to opt for the SRGT from the entry into force of Law no. 82-C/2014, of 31 December, which permitted horizontal tax consolidation.

d) The Claimants have already opted in accordance with the provisions of article 69-A of the CITC, in relation to the tax period 2015, as subordinate companies, through the application of the SRGT.

e) They intend to benefit equally from this regime with respect to the tax period 2012.

f) To that end, they individually submitted administrative reclamations, on grounds of error, of the aforementioned self-assessments, on 29 May 2015, and have not, to the present date, obtained any response from the Tax Authority.

g) This gives rise to a presumption of tacit dismissal under article 102, section 1, paragraph d) of the Code of Tax Procedure and Process.

h) The failure of the Tax Authority to recognize the possibility of opting for the SRGT with respect to the tax period 2012 constitutes a clear violation of the freedom of establishment as set forth in the Treaty on the Functioning of the European Union (TFEU), as implemented by the legislation and jurisprudence of the Court of Justice of the European Union (CJEU) and already recognized in similar circumstances in prior CAAD jurisprudence.

For its part, the Respondent alleged in its response, in summary:

a) The SRGT is based on the model of fiscal integration, that is, aggregation of the fiscal results determined individually by each group company.

b) Being a special regime it is optional in application, and the option must be communicated in accordance with the legal terms.

c) None of the Claimants formulated the option for the beginning of application of the SRGT by the end of the 1st quarter of the tax period 2012.

d) The jurisprudence of the European Union invoked by the Claimants has no constitutive value, has no retroactive effect, and the situations in which it was delivered are not exactly identical to the situation sub judice.

e) Therefore, the interpretation provided by that jurisprudence will only be binding in the proceedings in which the CJEU was requested to rule.

f) And even if this were the case, it would always be necessary to bear in mind that, in the case of the Claimants, access to the application of the SRGT depends and depended (in 2012) on the formulation of an option that was not effected by any of them in due time.

g) Had they exercised such option, it would have triggered a response from the Tax Authority which, in case of disagreement, could have been challenged judicially.

h) Neither the jurisprudence of the European Union nor the jurisprudence of the CAAD is applicable to the case sub judice, since both concern situations distinct from the one at issue.

i) Therefore, the arbitration request should be dismissed as lacking in merit.

The Arbitral Tribunal is materially competent and was regularly constituted.

The Parties have legal personality and capacity, are legitimate and are legally represented (articles 4 and 10, section 2, of the same act and article 1 of Order no. 112-A/2011, of 22 March).

The proceedings do not suffer from nullities.

Thus, there is no obstacle to consideration of the merits of the case.

II. Decision

1. Findings of Fact

1.1. Facts Established

The following facts are established:

a) As of 1 January 2015, the corporate structure of the group to which the Claimants belong may be reproduced in accordance with the following organization chart:

b) The Portuguese societies, now Claimants, are directly held by the societies F… S.A. and E… S.p.A., which are tax residents in other Member States of the European Union (Luxembourg and Italy, respectively);

c) The parent company of the group is the society D…S.p.A. and the percentage of shares it holds in the now Claimants has remained unchanged since 1 January 2003;

d) Since D… S.p.A. is not resident in Portugal, A… Portugal was designated to assume responsibility for the fulfillment of all obligations incumbent on the controlling company, in the terms and for the purposes of the CITC.

e) The Claimants formally joined the D… SRGT as of 1 January 2015.

f) The Claimants submitted, on 31.05.2013, Form 22 Declarations of Corporate Income Tax, relating to the tax year 2012, determining, for A…Portugal and B… taxable profits in the amounts of €1,547,814.63 and €21,471.47 respectively, and for C… a tax loss of €4,939,833.63, and were taxed individually because, under the terms of the internal legislation in force at the time, the option for the SRGT was not legally permissible, since the controlling company – D… S.p.A., was not resident in Portuguese territory for tax purposes.

g) The Claimants submitted to the Tax Authority, on 29 May 2015, administrative reclamations, invoking error in the acts of self-assessment of Corporate Income Tax relating to the tax period 2012.

h) To the present date, the administrative reclamations have not been subject to decision.

i) The present request for arbitration was submitted on 28.12.2015.

1.2. Facts Not Established

There are no facts relevant to the decision of the case that have not been established.

1.3. Basis for the Findings of Fact

The facts were established on the basis of the documents submitted by the parties and contained in the administrative record, as well as the positions of the parties, it being noted that there is no effective disagreement arising from the positions assumed by the Claimants and Respondent regarding the facts, the dispute being confined to matters of law.

2. On the Law

The contested question raised in these proceedings is that of the inclusion of the Claimants within the scope of the SRGT, with respect to the tax year 2012, as subordinate companies, with the controlling company being D… S.p.A, a society governed by Italian law and tax resident in Italy.

In fact, in Portugal, this possibility of inclusion in the SRGT was only admitted upon the entry into force of Law no. 82-C/2014, of 31 December, a legal regime which the Claimants chose as soon as it was permitted to them.

It is important to begin by describing the legal framework in force at the time of the tax events in question in the case at hand.

Articles 69, sections 3 and 4 of the CITC had, at that time, the following wording:

"3 - The option for application of the special regime for taxation of groups of companies may only be formulated when the following requirements are simultaneously met:

a) The companies belonging to the group all have their head office and effective management in Portuguese territory and the totality of their income is subject to the general regime of Corporate Income Tax, at the highest normal rate;

b) The controlling company has held the interest in the controlled company for more than one year, with reference to the date on which application of the regime begins;

c) The controlling company is not deemed to be controlled by any other company resident in Portuguese territory that meets the requirements to be qualified as controlling;

d) The controlling company has not waived application of the regime in the three years preceding, with reference to the date on which application of the regime begins.

4 - Companies in the following situations may not be part of the group:

a) They have been inactive for more than one year or have been dissolved;

b) A special proceeding for recovery or bankruptcy has been instituted against them in which an order to continue proceedings has been issued;

c) They register tax losses in the three tax years preceding the year application of the regime begins, except, in the case of controlled companies, if the interest is already held by the controlling company for more than two years;

d) They are subject to a Corporate Income Tax rate lower than the highest normal rate and do not waive its application;

e) They adopt a tax period that does not coincide with that of the controlling company;

f) The required level of participation of at least 90% is obtained indirectly through an entity that does not meet the legally required requirements to be part of the group;

g) They do not assume the legal form of a limited liability company, joint-stock company or limited partnership, except as provided in section 10."

The CITC thus provided for the taxation of groups of companies by the sum of the fiscal results determined in the income declarations of each of the companies belonging to the group, provided that the requirements and conditions provided for in sections 3 and 4 of article 69 of the CITC were simultaneously met.

Requirements that were not met in the group of companies in question because the controlling company was not resident in Portuguese territory, thus not meeting the requirement in paragraph a) of section 3 and paragraph f) of section 4 of the aforementioned provision.

In fact, the requirement to meet these requirements and condition prevented the Claimant companies, held by a company governed by Italian law and tax resident in Italy, from opting for the SRGT.

This requirement has as its consequence the subjection to differentiated tax regimes of companies resident in national territory by reason of the geographic location of the controlling companies, which constitutes a clear violation of European Union law. In fact, the exclusion of companies resident in Portuguese territory held by companies resident in the European Union constitutes discrimination on grounds of nationality and residence and an obstacle to the freedom of establishment enshrined in article 49 of the TFEU (previously article 43 of the Treaty Establishing the European Community - TEC).

As already explained in a CAAD decision, delivered on 12.01.2015, in Proc. 280/2014-T, "although only Member States have competence in direct tax matters, the CJEU has maintained, through its decisions, that those States must exercise this competence in accordance with European Union law. Thus avoiding violations of the five fundamental economic freedoms: (i) the free movement of goods (articles 28 et seq. of the TFEU); (ii) the free movement of workers (articles 45 et seq. of the TFEU); (iii) the freedom of establishment (article 49 et seq. of the TFEU); (iv) the freedom to provide services (article 56 et seq. of the TFEU) and (v) the free movement of capital (article 63 et seq. of the TFEU). Through the protection of each of these freedoms, directly applicable, there occurs a true harmonization through jurisprudential means which results in the requirement that national legislations conform to each of these freedoms. (…) The decision delivered by the Court of Justice of the European Union (CJEU), on 27 November 2008, in Proc. C-418/07, known as the Papillon Decision, concluded that rules that disadvantage in fiscal terms community situations in comparison with purely internal situations constitute a prohibited restriction under the rules of community law relating to the freedom of establishment."

The CJEU resumed this same idea in the decision delivered on 12 June 2014, in Joined Cases nos. C-39/13, C-40/13 and C-41/13, in considering that rules similar to the one discussed here (then article 69 of the CITC) translate into differentiated and discriminatory tax treatment by reason of the Member State of location of the controlling company. The CJEU further held that the situation of a resident parent company with resident subsidiaries is comparable to that of a non-resident parent company with resident subsidiaries, and they should be accorded identical tax treatment.

Following closely what was affirmed by the Advocate General in the conclusions presented in the proceedings underlying the CJEU decision just mentioned, it is settled jurisprudence that all measures that prohibit, disturb or make less attractive the exercise thereof must be considered restrictions on the freedom of establishment. There will be a restriction on the freedom of establishment when, in comparable situations, there is unequal treatment between resident and non-resident entities, adding that "the only difference that exists, in the case in question, in relation to comparable situations consists in the fact that this parent company is based in another Member State and, for that reason, cannot be included in the tax unit". Which is also verified in the case sub judice.

With regard to the content and effects of the freedom of establishment as enshrined in the constitutive treaties of the European Union, Alexandre Mota Pinto teaches, in commentary to article 49 of the TFEU [1], that this legal provision "expressly prohibits all restrictions on the freedom of establishment, being clear as to the direct applicability of the rules providing for the right of establishment, timely affirmed by community jurisprudence" (Reyners/Belgium, case 2/74), leaving no doubt as to the vertical direct effect of the freedom of establishment.

Now, in accordance with the primacy of European Union Law, it is prohibited for national courts to apply rules of national law that contradict what is imposed thereby, and where there is an interpretative decision delivered by the CJEU, the decision delivered therein retroacts to the date of entry into force of the respective rule, except if the decision itself provides otherwise [2], as has already been emphasized in a Decision of the Supreme Administrative Court of 18.12.2013, delivered in Proc. 568/2013.

And if, at first, the CJEU considered that it fell to national courts to leave inapplicable any provision of national law contrary to European Union law, subsequently such obligation became extended to all administrative bodies, as was decided in the Fratelli Costanzo Decision.[3]

In the case at hand, the Claimants present a corporate configuration capable of application of the SRGT, despite the limitation resulting from the then article 69 of the CITC, and it is possible to conceive that, by way of European Union law, the scope of application of that legal regime could be broadened.

However, and following what the Claimants allege in their arbitration request, as of the date of the facts under consideration, the option for the SRGT was not permitted by the national legal rules. Therefore, any communication by the Claimants to that effect, whose absence the Tax Authority invokes, would be devoid of meaning.

Nor can the argument invoked by the Tax Authority that the Portuguese legal system was not then adequate for the application of the SRGT to groups of companies in which the controlling company was not resident in national territory proceed.

Retaking the already cited CAAD decision delivered in Proc. 280/2014-T, "the fact that the national legislator did not timely adapt the legal system to community law cannot prevent the taxpayer from seeing its situation corrected and legality restored. Thus, the taxpayer may invoke before national courts any community rule with a view to obtaining an interpretation of the internal rules in conformity with or compatible with community law. It is important to note that the national legislator only with the recently approved Law no. 82-C/2014, of 31 December which amended the CITC, transposing Directive no. 2014/86/EU, of the Council, of 8 July, which amends Directive no. 2011/96/EU on the common tax regime applicable to parent and affiliated companies of different Member States, adapted the special regime for group taxation to the recent jurisprudence of the CJEU", this directive (2011/96/EU) which Portugal never managed to transpose.

Now, as explains Miguel Gorjão-Henriques, in commentary to article 288 of the TFEU[4], regarding the Directive, this act generates for the State, from its entry into force at the EU level, an immediate binding effect. If the State was obliged to transpose the Directive and does not do so (within the fixed period), it places itself in a situation of non-compliance (…) and cannot, according to the CJEU, take advantage (benefit) before private parties from its own non-compliance."

It thus follows from the above that the acts of self-assessment of Corporate Income Tax, relating to the tax year 2012, must be declared illegal for violation of law and error as to the assumptions of law, since the calculation for determining the taxable matter should have applied to the taxable profit of the tax group of the Claimants and not to the taxable profit of each company individually considered;

In effect, the Claimants should be included within the scope of the SRGT as a consequence of the interpretation in conformity with European Union Law as regards the requirements on which application of the SRGT depends and respect for its jurisprudence, namely, the Papillon decision.

3. Decision

In accordance with the above, this Arbitral Tribunal decides:

a) To judge the arbitration request to be entirely well-founded and, in consequence, to declare illegal and annul the assessments nos. 2013…, 2013…, and 2013…, relating to the tax year 2012, considering as valid the application, in the tax period 2012, of the SRGT, proceeding to taxation, in the context of Corporate Income Tax, of that same period, in accordance with articles 69 et seq. of the CITC, with all legally applicable legal-tax consequences.

b) To condemn the Respondent to payment of the costs of the proceedings.

4. Amount at Issue

The amount at issue is set at €342,374.42, in accordance with article 305, section 2 of the Code of Civil Procedure and article 97-A, section 1, a), of the Code of Tax Procedure and Process, applicable by force of paragraphs a) and b) of section 1 of article 29 of the LRTA and section 2 of article 3 of the Regulation on Costs in Tax Arbitration Proceedings.

5. Costs

The amount of the arbitration fee payable by the Respondent is set at €5,814.00, in accordance with articles 12, section 2, and 22, section 4, both of the LRTA, and article 4, section 4, of the Regulation on Costs of Tax Arbitration Proceedings and Table I annexed thereto.

Notify accordingly.

Lisbon, 26 June 2016

The Presiding Arbitrator,

(José Baeta de Queiroz)

The Arbitrator,

(Cristina Aragão Seia)

The Arbitrator,

(Rodrigo Domingues)

[1] In Treaty of Lisbon, Annotated and Commented, Coord. Manuel Lopes Porto and Gonçalo Anastácio, Almedina, Coimbra, 2012, p. 319.

[2] This Supreme Administrative Court decision follows closely the decision delivered by the CJEU on 10/05/2012, in Joined Cases C-338/11 to C-347/11:

"58 (…) according to settled case-law, the interpretation which the Court of Justice gives of a rule of European Union law, in the exercise of the jurisdiction conferred on it by article 267 TFEU, clarifies and determines the meaning and scope of that rule, as it must or should have been complied with and applied from the moment of its entry into force. It follows that the rule thus interpreted can and must be applied by the judge even to legal relationships which arose and were created before the judgment ruling on the request for interpretation, if the conditions which enable the referring court to submit to the competent court of justice a dispute concerning the application of that rule are also fulfilled (see, in particular, judgments of 3 October 2002, Barreira Pérez, C-347/00, ECR p. I-8191, paragraph 44, and of 17 February 2005, Linneweber and Akritidis, C-453/02 and C-462/02, ECR p. I-1131, paragraph 41, and of 6 March 2007, Meilicke and Others, C-292/04, ECR p. I-1835, paragraph 34).

59 Only exceptionally may the Court of Justice, in applying the general principle of legal certainty inherent in European Union law, be led to limit the possibility of relying on a provision as interpreted by it in order to call into question legal relationships established in good faith. In order for such a limitation to be decided upon, two essential criteria must be satisfied, namely the good faith of the parties concerned and the risk of serious disruption (see, in particular, judgments of 10 January 2006, Skov and Bilka, C-402/03, ECR p. I-199, paragraph 51, and of 3 June 2010, Kalinchev, C-2/09, ECR p. I-4939, paragraph 50)."

[3] Judgment of 22 June 1989, delivered in Case 103/88.

[4] In Treaty of Lisbon, Annotated and Commented, Coord. Manuel Lopes Porto and Gonçalo Anastácio, Almedina, Coimbra, 2012, p. 1030.

Frequently Asked Questions

Automatically Created

Can Portuguese subsidiaries of a non-resident EU parent company apply the RETGS special group taxation regime under IRC?
Under Portuguese IRC law as it existed in 2012, subsidiaries of a non-resident EU parent company could not apply the RETGS (Special Regime for Group Taxation). Article 69(3)(a) of the IRC Code required the dominant company to be tax resident in Portugal for tax purposes. This restriction was later removed by Law 82-C/2014 of 31 December, which introduced horizontal tax consolidation effective from 2015, allowing Portuguese subsidiaries to apply RETGS even when the ultimate parent company is resident in another EU Member State. Following this legislative change, groups can designate a Portuguese resident subsidiary to fulfill the obligations of the dominant company for RETGS purposes.
How does EU freedom of establishment affect the denial of RETGS tax consolidation for groups with a non-resident parent company?
The EU freedom of establishment principle, enshrined in the TFEU, prohibits discriminatory treatment of cross-border corporate structures compared to purely domestic ones. Denying RETGS tax consolidation to groups with non-resident EU parent companies while allowing it for groups with Portuguese parent companies constitutes a restriction on freedom of establishment, as established by CJEU jurisprudence in cases involving cross-border tax consolidation. Such differential treatment makes it less attractive for EU companies to establish subsidiaries in Portugal compared to Portuguese companies establishing domestic groups. This discriminatory effect can render national tax provisions incompatible with EU law, even when they are formally neutral, if they disproportionately disadvantage cross-border situations without objective justification related to preventing tax avoidance or ensuring fiscal coherence.
What was the CAAD arbitral tribunal's decision on IRC assessments challenging the exclusion from RETGS due to a non-resident parent?
While the complete decision is not provided in the excerpt, the case involved three Portuguese companies challenging IRC assessments for tax year 2012 that denied them RETGS benefits due to their Italian parent company. The claimants argued the restriction violated EU freedom of establishment, citing similar favorable CAAD jurisprudence. The Tax Authority contended that the claimants failed to exercise the RETGS option within legal deadlines and that EU jurisprudence lacks retroactive constitutive effect. The arbitral tribunal was constituted on 08-03-2016, held a hearing on 25-05-2016 where procedural objections were dismissed, and the final decision date was set for 31 July. The case reflects CAAD's role in applying EU law principles to Portuguese tax assessments and addressing discriminatory treatment of cross-border group structures in corporate taxation.
What is the procedure to challenge IRC tax assessments related to RETGS eligibility before the CAAD arbitral tribunal?
To challenge IRC tax assessments related to RETGS eligibility before CAAD, taxpayers must follow the procedure established in the Legal Regime for Tax Arbitration (Decree-Law 10/2011). The process involves: (1) filing an arbitration request under Article 2(1)(a) and Articles 10 et seq. of the LRTA, identifying the contested tax assessments; (2) demonstrating prior administrative challenge through reclamation (Article 102 of CPPT) with either express denial or tacit dismissal after the legal deadline; (3) paying the arbitration fee; (4) potential appointment of arbitrators or acceptance of CAAD President appointments; (5) constitution of the arbitral tribunal; (6) Tax Authority response defending the assessments; (7) preliminary hearing to decide procedural objections; (8) oral arguments; and (9) final decision within the statutory timeframe. The arbitration must be requested within the applicable limitation period after the administrative decision becomes final.
Does Portuguese IRC law discriminate against EU-based parent companies by restricting access to the RETGS group taxation regime?
Yes, Portuguese IRC law as applied in 2012 discriminated against EU-based parent companies by restricting RETGS access exclusively to groups with Portuguese tax-resident parent companies under Article 69(3)(a) of the IRC Code. This created unequal treatment between domestic and cross-border EU group structures, conferring a tax advantage (consolidated taxation allowing offset of profits and losses across group entities) only to groups with Portuguese parent companies while denying the same benefit to Portuguese subsidiaries of other EU parent companies. Such discrimination restricts freedom of establishment by making it fiscally disadvantageous for EU companies to structure their Portuguese operations through non-resident parent companies. This incompatibility with EU law was implicitly recognized by the Portuguese legislature through Law 82-C/2014, which eliminated the discrimination by introducing horizontal consolidation, allowing RETGS application regardless of parent company residence within the EU.