Tax Treaty Case Law around the Globe 2021

S. 218I. Introduction

This is a case (52/09.8BESNT) judged by the Portuguese Central Administrative Court (CAC), South Case, on the burden of proof concerning the source of income from employment for the purposes of credit granted by Portugal as the residence state.

According to Article 8 paragraph 2 of the Portuguese Constitution, tax treaties have a direct effect upon publication. A direct effect means that there is no need for treaties’ transposition into domestic law; they are in force as such. This direct effect occurs, as long as treaties have been enacted according to the constitutional rules on competence and do not violate material principles, including EU law principles.

The case under analysis relates to the burden of proof on the application of Article 15 of the Portuguese/Spanish tax treaty.

Following the OECD Model Convention on tax treaties, Article 1 of the Portuguese-Spanish tax treaty states that the treaty beneficiaries are the residents of one or both contracting states.

Moreover, in respect of income from employment, paragraphs 1, second part, and 2 of Article 15 of the same tax treaty grant cumulative competence to the source and the residence state, if some conditions a...