Insolvency and the Limitation Period for Debts: Unconstitutionality of article 100 of the CIRE

Judgment no. 557/18 of the Constitutional Court («CC»), handed down in Case no. 418/18, was published recently. This judgment confirmed the understanding already expressed in three previous cases on unconstitutionality and declared unconstitutional, with general mandatory force, the rule in article 100 of the Insolvency and Corporate Recovery Code (Código de Insolvência e da Recuperação de Empresas or «CIRE»), approved by Decree-Law no. 53/2004, of 18 March. The CC held that, interpreted in the sense that the insolvency declaration suspends the limitation period for tax debts imputable to the subsidiary debtor (and not to the original debtor, found insolvent in the meantime) in the context of tax proceedings, the rule is inconstitutional because it violates article 165(1)(i) of the Constitution of the Portuguese Republic («Constitution»).