CFE ECJ Task Force: Opinion Statement ECJ-TF 3/2021 on the CJEU decision of 18 March 2021 in Case C-388/19, MK v Autoridade Tributária e Aduaneira, on the taxpayers’ option to avoid discriminatory taxation of capital gains

This is an Opinion Statement prepared by the CFE ECJ Task Force1 on the MK v Autoridade Tributária e Aduaneira case, in which the First Chamber of the Court of Justice of the EU (ECJ) delivered its decision on 18 March 2021,2 which deviated from the Opinion delivered by Advocate General Hogan, on the 19 November 2021.3 In MK, the Court confirmed its previous case law and held that the Portuguese (optional) regime for taxation of capital gains from immovable property of non-residents was contrary to the free movement of capital under Article 63 TFEU since non-residents were taxed less favourably than residents. The fact that the domestic system provided an election for non-residents to be treated as residents was not sufficient to consider the rule as compatible with EU Law.