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Statute of Limitations in Portuguese Tax Law: Caducidade vs Prescrição
🧩 Two Different Deadlines
- Caducidade (expiry of the right to assess): the deadline for the Tax Authority to assess (calculate and notify) a tax.
- Prescrição (limitation of the tax debt): the deadline for the Tax Authority to collect a tax that has already been assessed.
In simple terms: caducidade is about creating the tax debt; prescrição is about collecting it.
📅 Caducidade: The Right to Assess (Article 45 LGT)
General rule: 4 years. The Tax Authority’s right to assess a tax expires if the assessment isn’t validly notified to the taxpayer within four years.
How it’s counted:
- Periodic taxes (like IRS and IRC): from the end of the year in which the taxable event occurred. For example, IRS on 2022 income can generally be assessed until 31 December 2026.
- One-off taxes (like IMT): from the date of the taxable event.
- VAT and final withholding taxes: from the beginning of the following calendar year.
Exceptions:
- 3 years when the error is evident from the taxpayer’s own return
- 12 years for facts connected with tax havens not declared to the Tax Authority, or with bank or securities accounts outside the EU not declared in the IRS return
- If there’s a criminal investigation, the period is extended until the case is closed, plus one year
- Notifications by registered mail are considered delivered on the third day after registration
⏳ Prescrição: Collecting the Debt (Article 48 LGT)
General rule: 8 years. Tax debts prescribe after eight years.
How it’s counted:
- Periodic taxes: from the end of the year of the taxable event
- One-off taxes: from the date of the taxable event
- VAT and withholding taxes: from the beginning of the following year
Interruption and suspension:
Unlike caducidade, prescription can be interrupted or suspended:
- It’s interrupted by events such as the summons (citação) in enforcement proceedings, or when the taxpayer files a complaint, appeal, challenge or request for review. In general, the first interrupting event “resets” the count.
- It’s suspended in situations such as payment plans in progress or enforcement proceedings suspended because of a pending challenge with a guarantee.
That’s why, in practice, many tax debts take much longer than 8 years to prescribe.
⚖️ Why the Difference Matters
- Caducidade protects you from late assessments: if the Tax Authority notifies an assessment after the deadline, it’s illegal and can be challenged.
- Prescrição protects you from endless collection: once a debt prescribes, it can no longer be collected.
- Prescrição is examined by the courts on their own initiative (de conhecimento oficioso) in enforcement proceedings — but it’s always wise to raise it yourself.
🧮 Example
Imagine you didn’t declare rental income received in 2021:
- Caducidade: the Tax Authority can assess the IRS on that income until 31 December 2025 (4 years from the end of 2021). If the income came from an account in a tax haven not declared, the period could be 12 years.
- Prescrição: once assessed, the debt can generally be collected for 8 years from the end of 2021 — and longer if interrupted or suspended.
💡 Practical Tips
- Keep your documents for at least the caducidade period — and longer if foreign accounts or tax havens are involved.
- Check the dates on any late assessment — the notification date is what counts.
- Don’t assume an old debt has prescribed — interruptions and suspensions are common.
- Get advice before relying on caducidade or prescription.
🚀 Final Considerations
Caducidade and prescrição are two of the most important guarantees taxpayers have. Knowing which one applies — and how it’s counted — can make the difference between paying an old tax bill or having it cancelled.
📢 Expert Advice: If you receive an assessment for an old tax year, check the notification date against the caducidade deadline before doing anything else. A late assessment can often be cancelled.
Received an old tax assessment or enforcement notice? Step Inside Portugal’s tax team can check if caducidade or prescription applies to your case — find out more about our tax services here. ✨
This article is for general information only and doesn’t constitute legal or tax advice. It reflects the rules as of October 2026; each case should be analysed individually.
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