Fifty Years of the Tax Constitution (I): Introduction and Main Phases of the First Five Decades of the 1976 Constitution

1. The constituent procedure and the different constitutional moments

The genesis of the Portuguese Tax Constitution of 1976 and the consolidation of constitutional case law in tax matters over the course of five decades rest upon a material and formal break with the authoritarian and corporatist regime of the 1933 Constitution. As J. J. Gomes Canotilho analyses in his dogmatic-constitutional reconstruction of the text approved on 2 April 19761, the drafting of the Fundamental Law followed the paradigm of original constituent power and dualist democracy, grounded in the direct election of the Constituent Assembly by universal, equal, direct, and secret suffrage. This procedural itinerary unfolded under several political and institutional constraints, marked by the conclusion of the Platforms of Constitutional Agreement (MFA–Parties Pacts I and II) and the coexistence of two sources of authority: revolutionary legitimacy, vested in the Council of the Revolution, and democratic legitimacy, emanating from the Constituent Assembly.

In Gomes Canotilho's teaching, the gestation of the 1976 text was characterised by the intersection of three overlapping institutional moments: the revolutionary moment (associated with the reconfiguration of the economic and social structure through democratisation, decolonisation, agrarian reform, and nationalisations); the extraordinary moment (centred on political transformation and the stabilisation process following 25 November 1975); and the compromise or Machiavellian moment. From this procedural matrix emerged a constitution characterised as uni-textual, rigid, extensive, programmatic, and compromise-based.2

From the perspective of constitutional theory, a functional coexistence arose between two models: the paradigm of a programme-constitution — directive, socialising, and oriented towards economic and social transformation — and the model of a process-constitution, designed to safeguard the rules of the democratic game, political alternation, and the protection of fundamental rights and freedoms. The compromise nature of the 1976 Constitution translated into a pact among heterogeneous political forces, articulating the liberal principle and the socialist principle, electoral legitimacy and revolutionary legitimacy, and the personalist dimension of fundamental rights with the protection of workers' rights.3

2. Early stages of the Portuguese tax constitution

In the tax sphere, the original 1976 text enshrined the principle of tax legality and democratic self-taxation in Article 106 of its initial wording, reserving to the Assembly of the Republic exclusive legislative competence to create taxes and define their essential elements. However, the initial version of the 1976 Constitution did not contain an explicit rule establishing a prohibition of retroactive taxes, and the derived constituent power of 1982 rejected proposals aimed at expressly including such a provision, such as the one set out in Francisco Sá Carneiro's draft Uma Constituição para os anos 80 (A Constitution for the 1980s).4

Given the absence of a concentrated court of constitutional justice during the early years of the 1976 text, it fell to the Constitutional Commission to determine the meaning and scope of temporal limitations on the taxing power. Through a consistent line of decisions — expressed in deliberations such as Opinions nos. 25/79, 5/81, 16/81, 25/81, 28/81, and 14/825 — the Constitutional Commission held that the 1976 Constitution had not enshrined a categorical or generic prohibition of retroactive tax laws. For the Constitutional Commission, the prohibition of retroactivity in tax matters derived solely, by implicit inference, from the principle of the democratic rule of law set forth in the Preamble to the Fundamental Law (and, following the 1982 constitutional revision, codified in Article 2), censuring only those taxing provisions that proved “intolerable, arbitrary, or disproportionately harmful to the legitimate expectations” of citizens.

3. Methodological delimitation and the body of case law

The present study is grounded in an essentially empirical and systematic examination of a representative body of case law comprising 262 rulings delivered by the Constitutional Court in tax matters over more than four decades (1983–2026), selected for their doctrinal significance (excluding summary decisions and serial repetitions of identical judgments) and encompassing almost all decisions on the merits delivered by the Plenary and the Sections on the constitutional tax questions brought before the Court since its establishment. The quantitative characterisation and overall decisional typology of the analysed universe are systematised in the following table:

On the substantive plane of the judgments, 117 rulings (44.7%) culminated in findings of unconstitutionality (organic, formal, or material), whereas 141 rulings (53.8%) upheld the conformity of legislative choices with the Constitution.

This decisional balance demonstrates that constitutional tax litigation has served simultaneously as a guarantee protecting taxpayers against abuses of power and as a legitimising arbiter of legislative tax policy, even under conditions of acute budgetary pressure. Concrete review constitutes the primary avenue of access to the Constitutional Court (185 rulings, or 70.6% of the corpus), showing that the construction of constitutional tax case law has been driven above all by taxpayers' reactions against concrete tax assessment acts challenged before the tax courts and, over the past decade and a half, before the CAAD arbitral jurisdiction. Alongside litigation that is constitutive of the rule of law, these figures also reflect litigation triggered by legislative instability and the proliferation of exceptional tax regimes6.

A methodological datum of particular relevance lies in the effectiveness of the 22 declarations of unconstitutionality with general binding force (erga omnes), which account for 8.4% of the corpus. Of these, 14 resulted from the application of the procedural generalisation mechanism provided for in Article 82 of the Constitutional Court Act (LTC), whereby the delivery of three coincident concrete decisions striking down the same rule requires the Public Prosecutor's Office to initiate abstract review proceedings. This instrument for purging unconstitutional norms from the legal order proved decisive in areas such as the invalidation of the Municipal Civil Protection Fee, the curb on regulatory de-legalisation via ministerial order (as in the case of ANACOM regulatory fees), the striking down of false interpretative laws with retroactive effect, and the elimination of irrebuttable statutory presumptions of income and real estate capital gains.7

Finally, the high percentage of rulings accompanied by dissenting or concurring opinions (58.8%) confirms that taxation is far from being a domain of bureaucratic-technical consensus. On the contrary, it has been one of the areas of sharpest division within the Constitutional Court, particularly regarding the limits of the protection of legitimate expectations, the boundary of commutative tributes, and the substantive reach of the ability-to-pay principle. Building on this empirical foundation, the following chapters trace the evolution of the Court's case law through its leading cases — landmark turning-point judgments and declarations with general binding force around which the parliamentary statutory reserve, open typicity, the prohibition of retroactivity, the tertium genus of financial contributions, the ability-to-pay principle, and the reserve of primary legislative function have been forged.

4. Subject matter of the study and key milestones of the 1976 Constitution

This study offers a systematic outline of the evolution of constitutional case law across the fifty years of the 1976 Tax Constitution. It aims to demonstrate how Portuguese constitutional case law on the tax constitution transitioned, over the past five decades (1976–2026), from a judicial review model based on the test of legitimate expectations and non-arbitrariness to the consolidation of a constitutional dogmatics grounded in objective rules of guarantee.

This trajectory unfolds across five periods, tracking the constitutional revisions and structural mutations of the tax system: (i) the founding phase (1976–1989), marked by the transition from the Constitutional Commission to the Constitutional Court, the assessment of tax retroactivity in the light of the principle of protection of legitimate expectations, the defence of the parliamentary statutory reserve (including in tax benefits and more favourable amendments), and the classical dichotomy between tax (imposto) and fee (taxa); (ii) the opening of the economic model (1989–1997), which embraced a concept of tax typicity grounded in sufficient determinability, eliminated pockets of judicial unreviewability of administrative tax assessments, and reinforced guarantees in tax enforcement proceedings; (iii) the period following the 1997 Constitutional Revision (1997–2008), defined by the express constitutional prohibition of tax retroactivity (Article 103(3) of the Constitution of the Portuguese Republic — CRP), the constitutional autonomisation of financial contributions (Article 165(1)(i)), and the strengthening of due process and the protection of banking secrecy; (iv) crisis and post-crisis taxation (2008–2019), dominated by the distinction between authentic retroactivity and retrospectivity in periodic taxes and autonomous taxation, the affirmation of ability to pay, proportional equality, and the dignified existential minimum in the face of budgetary emergency measures, and the expansion of sectoral levies; and (v) the recent period (2019–2026), characterised by the invalidation of false interpretative laws, judicial scrutiny over the perpetuation of ostensibly extraordinary financial contributions, the curb on regulatory de-legalisation, and the declaration of unconstitutionality of irrebuttable tax presumptions. The subsequent instalments examine this evolution, laying bare the winding road that constitutional case law had to travel in order to move from case-by-case review based on the arbitrariness test to a body of objective rules of guarantee, seeking to balance the democratic legislature's margin of appreciation with the effective protection of taxpayers.