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On 15 September 2016, the Court of Justice of the European Union gave a judgment in Case C-516/14 Barlis 06 – Investimentos Imobiliarios e Turisticos SA v Autoridade Tributaria e Aduaneira, involving the right of the Portuguese company to deduct VAT from invoices documenting legal services provided to it by a firm of lawyers.

Recently there have been communications of changes to the system of taxation of income earned by natural persons. The principles of levying tax and social security contributions on income applied to date are to be replaced by the so called unified tax, the amount of which will take into account income tax of natural persons and contributions for social and health insurance.

When determining equity for the purpose of thin capitalization, a taxpayer has to leave out from the calculation e.g. the value of revaluation capitals or equity from subordinated loans received. Proper determination of equity for those purposes has an impact on tax deductible expenses in connection with interest paid on loans advanced by related companies.