• 29/07/2026

The coverage of an imputed expense for property acquisition is assessed based on the actual use of the funds.

In the case under review, the taxpayer was assessed with an imputed income difference due to the purchase of real estate, as the tax authorities rejected the claim that the expenditure was covered by bank loans granted to a company in which he was a partner and manager.
The Administrative Court of Appeal dismissed the taxpayer's claim, ruling that the connection between the loans and the real estate purchase had not been proven.
The Council of State ruled that this reasoning was deficient, emphasizing that the court was obliged to examine whether the loan amounts were actually used to cover the expenditure, regardless of the person or entity to whom they were originally granted. It further stressed that tax presumptions are rebuttable and must not lead to the taxation of non-existent income, recognizing the taxpayer’s right to prove the actual source of the funds by any legal means of evidence (Council of State Decision 139/2026).