€23 Billion Sits Frozen in Portugal's Tax Courts, a Sum Worth 8% of the Economy
Some 641 tax cases each worth more than €1m are stuck in Portugal's courts, together totalling €23.16bn — roughly 8% of GDP. The CSTAF blames a shortage of judges, with the bottleneck at the appeal stage holding up significant funds for both companies and the State.
A sum equal to roughly 8% of everything Portugal's economy produces in a year is sitting frozen inside the country's tax courts, waiting for judges who are too few to clear it. New figures point to €23.16 billion tied up in the largest tax disputes alone — money that neither the companies contesting the bills nor the State chasing them can currently use.
The data come from the Conselho Superior dos Tribunais Administrativos e Fiscais (Superior Council of Administrative and Tax Courts, or CSTAF), the body that oversees the courts handling disputes between taxpayers and the State. Its count covers only the biggest cases: 641 tax proceedings, each worth more than €1 million, together adding up to that €23.16 billion figure.
An average case worth €10.7 million
Spread across those 641 files, the arithmetic is striking: the average large case involves more than €10.7 million. These are not routine disputes over a few hundred euros of income tax but heavyweight clashes over corporate assessments, VAT rulings and the reach of the Autoridade Tributária (Tax Authority), often pitting large firms against the State over sums that can dwarf a company's annual profit.
The bottleneck, according to the CSTAF, is concentrated at the second instance — the appeal stage, where a first-instance ruling is challenged and the case can stall for years. A dispute that reaches this level tends to sit in a queue rather than move toward resolution, and the larger the amount at stake, the more likely both sides are to fight on.
Too few judges
Eliana de Almeida Pinto, a judge and secretary of the CSTAF, points to a straightforward cause: a shortage of magistrates. There simply are not enough judges to work through the volume of complex, document-heavy tax litigation the system generates, and the backlog compounds as new filings arrive faster than old ones are cleared.
The consequences, she warns, fall on both sides of the dispute. The delays hold up “very significant funds” for companies and for the State alike — capital that a business might otherwise invest and revenue the Treasury might otherwise collect, both suspended while the case grinds through the courts.
Why it matters beyond the courtroom
For a country that markets itself to foreign investors and entrepreneurs, the speed and predictability of tax justice is part of the offer. A system where a serious dispute can take the better part of a decade to resolve is a deterrent in itself, and it weakens the deterrent effect of tax rules when enforcement outcomes are so distant.
It is also a fiscal problem. Billions of euros in contested assessments represent revenue the State has booked but cannot bank until the courts rule, leaving public accounts exposed to the eventual outcome of cases that may not conclude for years. Clearing the backlog would require more judges and faster procedures — reforms long discussed but, on the evidence of these numbers, not yet delivered.
