The decision last March by the Administrative Arbitration Centre (CAAD) cites European Union Law and European case law to consider that "the self-assessment of the so-called ASSB (Solidarity Contribution on the Banking Sector) is invalid because it is contrary to Union law" and that "the tax act in question must be annulled due to substantive illegality".

The decision to which Lusa had access does not mention the bank that is appealing the decision, only that it is the branch of a French bank, and the amount in question is almost 353 thousand euros.

In this process, which has been ongoing since 2022, the bank in question is appealing the decision of the Tax Authority, regarding the payment of the additional amount for 2020, considering that this collection is illegal for several legal reasons.

One of the arguments is that there is discrimination against branches because the tax base on which the solidarity contribution is calculated is different from that of banks resident in Portugal.

The bank argues that by operating in Portugal as a branch "it has no equity or own funds" and therefore cannot deduct them from the tax base on which the solidarity contribution is calculated, considering that this is a "clear situation of discrimination between resident and non-resident entities, which is prohibited under European Law".

It is in this argument that the arbitral tribunal agrees with the bank, thus deciding on the "illegality of the liquidation carried out".

The Tax and Customs Authority (AT) also argued that, contrary to what the bank alleged, "branches are not prevented from deducting equity, and the branch is able to qualify the funds allocated to it by the head office as liabilities or as equity, depending on whether or not they are subject to remuneration and their permanent nature", but the arbitral tribunal did not agree with it.

In addition to the refund of the amount collected, the CAAD also determines the "payment of compensatory interest from the date of the undue payment until the date of processing of the respective credit note".

The solidarity contribution on banks was created in 2020 as an additional contribution to help bear the costs of responding to the impact of the covid-19 pandemic, with the revenue obtained being directed to the Social Security Financial Stabilisation Fund. This tax has been maintained since then.

According to the 2024 State Budget, public coffers should receive 38.8 million euros this year.

The additional contribution to the banking sector was contested by the banking sector when it was created, with the Portuguese Banking Association (APB) saying at the time that it "did not know and did not understand" the reasons justifying applying an additional solidarity contribution "only to the banking sector".

This specific cost for banks is in addition to the contribution on the banking sector (which finances the bank Resolution Fund), an extraordinary measure instituted by the Government of José Sócrates in 2011, but which all governments have since maintained and even increased.

The leader of the Portuguese Banking Association (APB), Vítor Bento, said in March, after the inauguration of the current Government (PSD/CDS-PP), that he intended to request a meeting with the new Minister of Finance and remind him that the solidarity contribution that continues to be charged to banks has already been considered unconstitutional.

Jornal de Negócios reported in March that the Constitutional Court (TC) considered the Additional Solidarity Contribution on the Banking Sector (ASSB) unconstitutional, as this tax was created by a law that came into force in July 2020, but was applied to the entire year, which violates the Constitution of the Republic, since it contradicts the principle according to which "no one can be forced to pay taxes" that "have a retroactive nature".

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