EU taxes

Agnes351

Hi, does anybody know if EU tax officials have jurisdiction in the UK. My parents have just sold their house in Portugal have no intention of returning and have decided not to pay the taxes on their property. What is the situation?

DoaM

If it's enough money, and the cost of chasing isn't prohibitive, then they'll find a way.

davidmcn

Debts in general can be pursued cross-border, though I don't think foreign governments have any special status above other creditors within the UK.

DoaM

I don't know whether the fact it's a "tax" changes things? (i.e. government-based rather than contract-based).

G_M

Tell them not to sell till after October 31st........

G_M

https://www.blevinsfranks.com/news/article/Portugal-capital-gains-tax

davidmcn

DoaM wrote: »

I don't know whether the fact it's a "tax" changes things? (i.e. government-based rather than contract-based).

Don't think so. UK taxes would get first bite of the cherry in the event of a (UK) insolvency. Foreign court judgments can be enforced here (bit streamlined I think if it's intra-EU).

AdrianC

Yes, a creditor can pursue a debt across borders.
No, Brexit won't change that. It may make it more expensive - but since the loser pays the costs, it's your parents who will end up footing the bill.

Why do they think they should be free to run away from paying their debts?

Bossypants

Tell your parents to pay what they owe, firstly because it's the right thing to do, and secondly because tax collectors in any jurisdiction can be extremely dogged. It'll definitely catch up with them one way or another, and when it does they'll have to pay everything they owe now, plus interest, costs and penalties.

ethank

Even worse than that, since 2012 there has been mutual recovery assistance between EU Member States has been governed by Council Directive 2010/24/EU.


It was introduced as "an essential tool to recover tax claims in cross border situations. It helps ensure that tax debtors do not successfully evade their tax payment obligations."

Essentially, the Portuguese Tax Authorities can ask HMRC here in the UK to trace you, bill you, and take enforcement action on their behalf, so they get their money back. Oh, and you'll be charged a lot of money for the privilege too.

steampowered

Yes, of course.

Debts can be enforced cross-border. The judgment of a Portuguese court can be enforced in the UK, just as the judgment of a UK court can be enforced in Portugal.

While noone knows whether that arrangement will remain in place post-Brexit, it seems likely.

Even if it doesn't remain in place, it is still possible for the Portuguse authorities to bring proceedings in the UK to recover unpaid debts, or to seek recognition of a Portuguese court judgment (just as it is possible for the US authorities to bring proceedings in the UK, or to seek recognition of a US court judgment).

You'd also better hope there are no criminal consequences to willfully refusing to pay taxes that are due. Otherwise I suppose your parents could theoretically be looking at extradition proceedings.