Lisbon, April 16, 2025 (Lusa) - Portugal's Court of Auditors (TdC) found flaws in checks carried out by the country's Tax and Customs Authority (AT) of tax rules benefiting real estate investment funds, according to an audit report released on Wednesday. In an audit of the tax benefits for property investment companies, the Court of Auditors states that in 2023 there were 265 property funds operating in Portugal, with assets under management totalling €14.440 billion (equivalent to 5% of the countrys's gross domestic product). Regarding checks carried out by the AT, the court concluded that "the procedures put in place do not guarantee that the tax regime benefits only those funds that are entitled to it." Added to this is the fact that, according to the document, property funds are not subject to specific control procedures, despite the fact that their tax situation is monitored by the Large Taxpayers Unit. With regard to the tax benefits granted to these organisations in terms of IMI (municipal property tax) and IMT (municipal property purchase tax), the TdC identified "shortcomings in the control of the deadline for resale, as well as exemptions granted under legal provisions that were no longer in force." In the meantime, the procedures for recovering the missing amounts set in motion by the AT, following this audit, have made it possible to recover around €1 million "arising from tax exemptions unduly granted." The audit also concluded that the "assessment of this more favourable IRC [corporate income] tax regime is compromised by the fact that the Tax and Customs Authority does not calculate the revenue that will no longer be collected" - stressing that this quantification was also "not done in the context of the assessment carried out by the government in 2020, which nevertheless concluded that the tax regime should be maintained." Among the recommendations the court makes to the Ministry of Finance and the At, following this audit, the TdC mentions the need to ensure the quantification of corporate income tax revenue that is no longer collected as a result of the more favourable tax regime and that the gaps and weaknesses detected in terms of control are corrected. It also wants the discriminatory situations identified by the Court of Justice of the European Union (CJEU) to be eliminated, in a reference to the fact that that institution concluded that Portugal's system for levying IRC on these funds does not ensure the free movement of capital provided for in the European Union Treaty because it excludes non-resident entities. LT/ARO // ARO. Lusa