IRC Withholding Tax on Non-Resident Entity: CAAD Ruling on Repeated Tax Inspection Legality (131/2013-T)

ARBITRAL DECISION

The Arbitrators Manuel Luís Macaísta Malheiros (Presiding Arbitrator), José Pedro Carvalho and João Santos Pinto, designated by the Deontological Council of the Administrative Arbitration Centre to form an Arbitral Tribunal, hereby decide as follows:

I – REPORT

1. A, taxpayer no. …, with its registered office in …, requested the constitution of an Arbitral Tribunal, pursuant to articles 10, nos. 1 and 2 of the Legal Regime for Tax Arbitration, provided for in Decree-Law no. 10/2011, of 20 January, hereinafter designated "RJAT", and articles 1 and 2 of Order no. 112-A/2011, of 22 March, having as its subject matter the decision dismissing in part the tax objection lodged against the assessment of income tax withholding no. 2012 …, of 17 August 2012, as well as the assessment of compensatory interest no. 2012 …, relating to the tax year 2008.

2. The TAX AND CUSTOMS AUTHORITY (hereinafter designated as ATA or Respondent) is hereby required, which succeeded the General Directorate of Taxes.

3. The request for constitution of an arbitral tribunal was validated and accepted on 05 June 2013 by His Excellency the President of the Administrative Arbitration Centre (hereinafter designated as "CAAD"), and the ATA was notified of the presentation of the aforesaid request on the same date.

4. The Claimants did not proceed to the appointment of an arbitrator, wherefore, pursuant to article 6, no. 1, of the RJAT, the signatories were designated by the President of the Deontological Council of the CAAD as arbitrators in the present arbitral tribunal, having accepted the designation in the terms legally provided.

5. The Arbitral Tribunal was duly constituted at the CAAD on 07 August 2013 to assess and decide the subject matter of the present proceedings.

6. In summary, the Claimant bases its claim on the following:

ü According to no. 4 of article 63 of the General Tax Law ("LGT"), a new procedure for external inspection concerning the same taxpayer, tax and tax period is only permitted with reasoned authorization from the senior official of the service and based on new facts.

ü The Tax Authority, after issuing the final report with the conclusions of an external inspection procedure for the year 2008 and, therefore, after the termination of the latter, used documents obtained in such procedure to promote a subsequent correction disguised as an alleged "internal" inspection procedure.

ü The Claimant does not understand how the Tax Authority can argue that "there is no continuity of inspection procedures", but rather one action of external inspection, followed by another internal one "triggered by new documents, namely documents from AFH [Dutch Tax Authority] obtained in the context of mutual assistance and international administrative cooperation.

ü If on the one hand the Tax Authority considers that it only proceeded with a mere formal analysis of documents and their consistency, on the other hand it invokes new documents which did not exist at the date of the termination of the inspection procedure.

ü It is not apparent what legal framework legitimises the carrying out of an internal inspection action concerning the year 2008 (i) after the conclusion of the external inspection action on the same year and with the same scope and (ii) based on documentation collected in the context of the said external inspection action.

ü The principles of legality, legal certainty, proportionality and good faith impose that the taxpayer does not remain ad eternum dependent on the conclusion of proceedings by the Tax Authority, particularly after having been notified of the Inspection Report, which, as aforesaid, brings about the termination of the inspection procedure.

ü The internal inspection procedure carried out by the Inspection services concerning the year 2008 is tainted by the defect of illegality, whereby the respective assessment notice should be annulled, this fact being aggravated by the fact that the situation described was not addressed in the decision dismissing the tax objection by the Tax Authority services.

ü The arguments put forward by the Claimant in the tax objection procedure, both as regards the legality of the internal inspection action based on documentation obtained in the context of an external inspection action, and as regards the assessment of the disputed substantive issue, merit no reflection or conclusion on the part of the UGC, limiting itself to presenting a summary thereof.

ü Whereby the decision dismissing the tax objection is tainted by the defect of illegality, due to lack of reasoning, and the respective assessment notice should be annulled.

ü When making payment to B, the Claimant carried out all necessary diligence in order to comply with the obligations to which it was bound regarding withholding at source, having requested from the entity in question the form 21-RFI, duly completed, so that it would benefit from the provisions of the Treaty for the Avoidance of Double Taxation (ADT), the Claimant being thereby relieved of the obligation to effect withholding at source.

ü In the context of the external inspection action, the Claimant was in possession of the said form, duly completed and authenticated by the Dutch tax authorities, which attested to the residence of B for tax purposes as the actual beneficial recipient of the income.

ü For the Claimant, the Dutch Tax Authority certified that B, as the actual beneficial recipient of the income, is resident for tax purposes in the Netherlands.

ü The Claimant had no way of ascertaining who the actual beneficial recipient of the income in question was, nor was it aware that in the case in question such a procedure would be necessary, given that, as aforesaid, it was in possession of a document duly certified by the Dutch tax authorities, having acted in good faith.

ü If we look at the provisions of the Corporate Income Tax Code that impose on the taxpayer the burden of ascertaining whether the entity to which the income is paid also constitutes the actual beneficial recipient (a concept which is not defined in Portuguese tax legislation), it is clear that this obligation is imposed in situations where special relationships exist (namely of a capital nature), allowing more easily the said control, which is clearly not the case in the situation in question.

ü The issue of the determination of the actual beneficial recipient is a matter of a complex nature, having given rise to reports on this subject by the OECD and occupying part of the Commentary to article 1 of the Model Convention on Income and Capital ("Model Convention").

ü The Claimant has total freedom in the management decisions that affect it, and these may be taken on the basis of different criteria, of a diverse nature, without the Tax Authority being granted the discretionary power to scrutinise such decisions or to speculate about the motivations underlying them, without presenting concrete elements that support its position.

ü The "exchange of correspondence" that the DIEF intended to be made available to it does not exist, not because we are faced with an elaborate tax planning scheme, but only because, in accordance with commercial practice, negotiations in this regard are conducted in the manner described: in a spirit of proximity and confidentiality.

ü The Inspection Report is silent as to the elements on which it is based to promote the assessment of compensatory interest sub judice, making no mention of the Claimant's fault in the alleged delay in the assessment of the tax.

ü The assessment of compensatory interest is not an immediate and automatic consequence of any additional tax assessment, but rather can only correspond to the final result of the entire cognitive and evaluative process where the nexus of causality referred to is established and a judgment of censure is formulated as to the taxpayer's conduct.

ü It must therefore be concluded that there is an absence of reasoning for the assessment of compensatory interest, particularly as regards the Claimant's fault in the alleged delay in the assessment of tax, which violates the provisions of article 35, no. 1 and articles 77, nos. 1 and 2, both of the LGT, as well as the provisions of article 268, no. 3 of the Constitution (CRP).

ü The Claimant concludes by requesting:

o the declaration of illegality of the assessment of income tax withholding no. 2012 ...;

o the declaration of illegality of the compensatory interest assessment notice no. 2012 ....

1. In its response, the ATA sets out, in summary, the following considerations:

ü In strict compliance with legality and, consequently, its duties, the Respondent carried out two distinct inspection procedures, in compliance with the provisions of article 13 of the Supplementary Regime for Tax Inspection Procedures (RCPIT), which provides for the possibility of inspection procedures being of two types (internal and external);

ü It is not, therefore, as alleged by the Claimant, a reopening of the inspection procedure but merely the "...formal analysis and consistency checking of documents..." which were already in the possession of the Respondent and, consequently, logically and in light of the wording of the law, an internal procedure.

ü In the case sub judice there is no continuity of inspection procedures, but rather, as results from the case file, an external inspection and subsequently, triggered by new documents, namely documents from the AFH obtained in the context of mutual assistance and international administrative cooperation, an internal inspection;

ü As appears from the case file, the tax correction made by the AT resulted from the fact that the Claimant did not present documents proving the actual provision of the service by B, BV, and consequently proving that it was the actual beneficial recipient of that income for the purposes of applying article 98 of the Code of Corporate Income Tax - hereinafter CIRC.

ü Not having been proven that it was the entity B BV that actually provided the service to A, but that it was provided by another entity resident in the British Virgin Islands, which are part of the list of privileged taxation countries, B having been contracted to act on behalf and in the name of the latter, in the invoicing and receipt of the "negotiation service" with A, the AT, in strict compliance with its attributions, made the corresponding correction;

ü A report, following an inspection procedure, is nothing more and nothing less than that, a report which contains, or does not contain, corrections, it is not a ratification of the accounts presented by the taxpayer;

ü The Claimant challenges the arguments set forth in the inspection report and its conclusion, and the AT, in assessing such arguments, dismissed the tax objection, maintaining the tax act with all the reasoning previously presented.

ü It is demonstrated that the Claimant fully understood the meaning and scope of the reason for dismissal and its respective grounds, as results from the legal-argumentative exercise itself that it carries out through the present request for arbitral decision.

ü Not finding merit in the arguments put forward by the Claimant, which is debtor of the outstanding amounts, there being no grounds for its exemption, being, therefore, as a substitute taxpayer, responsible for the remittance of the tax, in accordance with no. 5 of article 90-A of the CIRC.

ü Although it is true that the requirement of compensatory interest depends on the existence of a nexus of causality between the taxpayer's conduct and the consequent harm to the State, it is nevertheless certain that the imputability required for responsibility for the payment of compensatory interest depends on the existence of fault on the part of the taxpayer, and that fault exists when a given conduct constitutes a fact qualified by law as unlawful, not because fault is merely presumed, but because it is something which as a rule or prima facie is connected to the unlawful-typical character of the respective fact.

ü The ATA concludes that in its understanding the tax act is to be maintained and that the compensatory interest in question is due, inasmuch as there was a delay in that assessment, there also being a nexus of causality between the taxpayer's conduct and the consequent harm to the State, as creditor.

1. A meeting was held on 25 November 2013, at 11.00 hours, as referred to in article 18 of the RJAT, of which the respective minutes are attached to the case file.

2. At the said meeting it was decided that the parties would submit their respective pleadings in writing, which both did.

Having reviewed all matters, it behoves us to deliver

II. DECISION

A. STATEMENT OF FACTS

A.1. Facts taken as proven

1. During the tax year 2008, the Claimant made a payment of €500,000.00 to entity B, a non-resident without a permanent establishment in Portugal, which was not subject to withholding at source.

2. The said payment is supported by a contract concluded between the Claimant and the said entity, in … and on 16-07-2008, with the following content:

• "The ... will grant the total net amount of € 500.000 to B ...for the assistant for the transfer of the ... to ... from ....".

1. The same payment was made on the basis of a document called "Invoice", dated 21-07-2008, which charges the amount in question, with the following reference:

• "Services for our assistance in the transfer of the professional ... Mr. ..., from ... to A, following the agreement signed on 16.07.2008"

1. When making the payment to B, the Claimant requested from that entity the form 21-RFI, duly completed, in order to benefit from the provisions of the Treaty for the Avoidance of Double Taxation in force between the Portuguese Republic and the Kingdom of the Netherlands.

2. Through letter no. …, dated 2010-07-01, the AT activated the mechanism of exchange of information with the Dutch tax authorities, in order to be provided information and documents regarding the confirmation of services provided, furthermore, by company B, resident in the Netherlands, in the intermediation of the negotiation and transfer of the rights of images of the ….

3. In the response to the request for exchange of information above-referred, the Dutch tax authority, through letter attached to the case file, informed, furthermore, that:

a. B is resident in the Netherlands for tax purposes;

b. the service in question (relating to the …) was not actually provided by B, but by company C, resident in the British Virgin Islands;

c. Company B received the invoiced amounts which it transferred immediately to the final recipient, after deducting its commissions.

d. Company B did not benefit from more favourable treatment based on article 28 of the Treaty for the Avoidance of Double Taxation in force between the Portuguese Republic and the Kingdom of the Netherlands.

1. The above-referred response was already in the possession of the Portuguese AT on 13-04-2011.

2. In the context of Service Order no. …, an external inspection action was carried out on the financial statements of the Claimant, relating to the tax year 2008, which was duly concluded and in whose final report, regarding the matter in question in the present proceedings, did not propose any type of correction.

3. During the said external inspection action, the Claimant was in possession of the form 21-RFI referred to above, duly completed and authenticated by the Dutch tax authorities, which attested to the residence of B for tax purposes.

4. The transfers of funds from the Claimant to B and from the latter to the final recipient thereof are duly supported by banking documents likewise sent by the Dutch tax authority.

5. In the context of Service Order no. … an inspection action, qualified by the AT as internal, was carried out on the financial statements of the Claimant, relating to the tax year 2008, of partial scope, concerning the procedures adapted in respect of income tax withholding at source.

6. In the context of the said inspection action, on 17 April 2012, the Claimant was notified to present evidence that "entity B, resident in the Netherlands, would have actually provided the declared services", the Claimant providing the clarifications it deemed appropriate on 9 May 2012

7. On 10 July 2012, the Claimant was notified of the Draft Report Conclusions, by means of which the Tax Authority services proposed a correction concerning withholding at source allegedly not effected on payments made to entity B, for intermediation in the negotiation and conclusion of a sports employment contract for a ….

8. The Claimant did not exercise the right to a prior hearing on the Draft Report Conclusions, whereby the proposed correction was fully maintained in the Final Tax Inspection Report, of which the Claimant was notified on 1 August 2012.

9. In the sequence, there were issued on 17-08-2012, the assessment of income tax withholding no. 2012 ..., as well as the compensatory interest assessment no. 2012 ..., relating to the tax year 2008.

10. On 6 December 2012, the Claimant presented its respective tax objection.

11. On 12 March 2013, the Claimant was notified of the final decision dismissing the tax objection, through Letter no. …, of 11 March 2013.

A.2. Facts taken as not proven

1. The information from the Dutch tax authority was provided after the closure of the external inspection procedure, carried out under the said service order no. OI….

A.3. Reasoning of the statement of facts proven and not proven

The statement of facts taken as proven results essentially from the documents attached to the case file by the parties, being generally consensual between the parties.

In particular, the letter and the date indicated in the fact taken as proven in point 5, as well as the date indicated in the fact taken as proven in point 7, result from document 1 attached with the response of the ATA.

The fact taken as not proven results from the absence of sufficient proof thereof, which should, of necessity, be documentary, and would pass through the demonstration, which was not made, of the dates on which the external inspection procedure terminated and on which the information from the Dutch tax authority was received.

B. ON THE LAW

In view of the rules on the order of examination of defects contained in article 124 of the Tax Procedure Code (CPPT), subsidiarily applicable pursuant to article 29, no. 1, paragraph a), of the RJAT, defects in violation of substantive law shall be examined as a priority, as these are those whose eventual merit determines the most stable protection of the interests of the Claimant.

B.1 On the impossibility of carrying out more than one external inspection procedure

In the case under analysis, two inspections occurred, one external and subsequently another internal, concerning the same taxpayer, tax and tax period.

The Claimant alleges that the internal inspection should be qualified as external. Should that possibility be confirmed, the carrying out of the second inspection would be prohibited in view of the prohibition on carrying out two external inspections, in accordance with article 63, no. 4 of the LGT. Under the same provision only the following are excepted: i) cases in which there is a reasoned decision based on new facts by the senior official of the service or in which ii) the inspection seeks only the confirmation of the presuppositions of rights which the taxpayer invokes before the tax administration without prejudice to the assessment of the tax situation of the taxpayer through inspection or inspections directed at third parties with which it maintains economic relationships.

Analysis:

As regards the location of the inspection procedure, article 13 of the RCPIT classifies them as external and internal. In accordance with its paragraph a) an inspection may be qualified as – internal - "when the inspection acts are carried out exclusively in the services of the tax administration through formal analysis and consistency checking of documents;". In turn, an inspection may be qualified as – external - "when the inspection acts are carried out, wholly or in part, in the premises or facilities of taxpayers or other obligated parties, of third parties with whom they maintain economic relationships or in any other place to which the administration has access."

It is thus found that the distinction between external and internal inspection is not immaterial, not only because of the prohibition of the aforementioned article 63, no. 4 of the LGT, but also because, in the case of an external inspection, the limitation period for the right to assess is suspended (cf. article 46, no. 1 LGT). In reality, with the prohibition on carrying out more than one external inspection, the legislator intended to prevent the AT from suspending the limitation period more than once, successively opening external inspection procedures, and to prevent taxpayers from being subject more than once to the intrusive proceedings permitted within the framework of those procedures.

Finally, notwithstanding the qualification by the AT of a particular inspection as external or internal, nothing prevents such qualification from being subject to judicial or arbitral review and its qualification being altered accordingly, if the material acts do not correspond to the initial qualification, whereby the question which is the object of the present proceedings is pertinent and it is important to analyse.

In order to support its position, the Claimant further alleged that the same legal solution should be applied to the present case as in the arbitral decision delivered in the context of Proc. no. 14/2012-T of the CAAD.

Under the terms of the said decision, it is an offence against the principle of legality the "re-examination" of elements obtained by the Tax Administration in the context of the right to a hearing in an inspection procedure after the report has been drawn up and the procedure concluded. It was understood that "(…) regardless of some corrections having been effected on the basis of other elements provided by the Claimant in exercising the right to a hearing on the draft of that report, it must be considered established that the corrections effected and notified to the Claimant had as their source elements collected in the external inspection procedure for the year 2001".

In turn, in its pleadings on law, the Respondent invoked the Judgment of the Northern Administrative Court of Appeal, delivered on 13-12-2013 in the context of case no. 20/13.2BEBRG, which in the opposite sense of the above decision delivered by the CAAD, understood that: "(…) the internal or external nature of the inspection does not depend on the nature of the elements collected, but on the place where they are found at the time of the inspection procedure." Concluding that "to ascertain the location of the inspection acts, it is not relevant to know which documents are to be inspected but the place where these are located."

Quid juris.

It is clear from the case file that in the context of the internal inspection, the decisive element for motivating the correction in question was the information obtained from the AFH.

Even if one takes into account the arbitral decision delivered in the context of Proc. no. 14/2012-T, it is thus found that the decisive element, or in the language of Proc. no. 14/2012-T, the "source", which substantiated the corrections effected which motivated the assessment in question, was the information from the AFH obtained through mutual assistance and international administrative cooperation.

Thus, it is concluded that there took place an external inspection and subsequently an internal inspection, which is permitted by virtue of article 63, no. 4 of the LGT, a contrario.

Thus, as the assessment was effected and legally notified within the limitation period, it is concluded that the Claimant does not have a valid claim, and the carrying out of the second internal inspection is not tainted by defect of law by this route. The first ground of illegality imputed by the Claimant to the impugned assessment is therefore without merit.

B.2 On the correction made

At the time of the facts, article 90-A no. 2 paragraph a) of the CIRC was in force, presently article 98 CIRC, the wording of which does not differ as far as the present case is concerned.

Under article 90-A no. 1 of the CIRC there is an exemption from withholding at source (RF) "(…) when by virtue of a convention intended to eliminate double taxation or of another agreement of international law that binds the Portuguese State or of internal legislation, the competence for the taxation of income earned by an entity which does not have its place of effective management in Portuguese territory and does not have a permanent establishment there (…)". (underlined)

Article 90-A no. 2 paragraph a) of the CIRC provides that "in the situations referred to in the preceding number, as well as in paragraph g) of no. 2 of article 80 of the CIRC, the recipients of the income must prove before the entity which is obliged to effect the withholding at source, by the end of the period established for the payment of the tax which should have been deducted in accordance with the applicable legal provisions:

a) The verification of the presuppositions resulting from a convention intended to eliminate double taxation or from another agreement of international law or from applicable internal legislation, through the presentation of a form of a model to be approved by ministerial decision of the Minister of Finance certified by the competent authorities of the respective State of residence;" (bold and underlined)

As Alberto Xavier states: "The essential characteristics of the regime of article 90-A of the CIRC are therefore: (i) to be necessary proof, considering that the facts, which are the object of proof – in particular the residence of the recipient of income – can only be demonstrated by a certain means of proof, with the exclusion of all others admitted in Law, (ii) such necessary proof consists of an act of a foreign State administration (certificate); (iii) such proof must have as a necessary moment of presentation the date on which the substitute taxpayer effects the withholding at source; the consequence of non-presentation of proof in the terms and timeframe referred to above gives rise to a compulsory patrimonial obligation consisting of the excess of the tax withheld at the rates of the internal law compared with the conventional rates, reimbursable within two years from the date of verification of the tax event." (International Tax Law, 2nd Updated Ed., Almedina, p. 540)

Article 90-A no. 5 of the CIRC further reinforces that: " (…) when proof is not effected by the end of the period established for the payment of the tax, and likewise in the cases provided for in nos. 3 et seq. of article 14, the substitute taxpayer is obliged to pay the total amount of the tax which should have been deducted in accordance with the law. (Wording of Law no. 67-A/2007, of 31/12)". (bold and underlined)

The condition for the exemption from RF is thus the presentation of a form of a model to be approved by ministerial decision certified by the competent authorities of the respective State of residence.

Following the amendments to article 90-A of the CIRC introduced by the State Budget for 2008, ministerial decision 4743-A/2008, of 8 February 2008, published in the Official Gazette no. 37, 2nd series, of 21 February 2008, new RFI forms were approved, in replacement of those which had been approved by Decision no.30359/2007, of 29 November and which were in force from 1 January 2008.

As it is a request for total exemption from withholding at source of Portuguese tax under the Treaty for the Avoidance of Double Taxation, the correct form is indeed model 21-RFI.

It thus clearly results from the law that the presentation of a form duly certified by the tax authorities is the only element required for the exemption from withholding in the terms required by article 90-A of the CIRC.

In the case under analysis, it is proven that the Claimant provided proof of compliance with the condition required by article 90-A of the CIRC, that is, at the moment of payment of the commission, it had in its possession model 21 RFI duly certified by the AFH that the entity benefiting from the income is fiscally resident in the Netherlands.

Article 90-A CIRC does not contain any specific anti-abuse clause, or any other additional condition. Furthermore, the legislator could have instituted only the reimbursement mechanism to give the AT an opportunity to verify compliance with the requirements, which it did not do.

As it concerns a payment of a commission by an entity resident in Portugal to another entity resident in the Netherlands, the Treaty for the Avoidance of Double Taxation in force must be taken into account.

As the payment was made to an entity resident in the Netherlands, as appears from model 21-RFI, the competence for the taxation of income is that of the Netherlands given that these are business profits ('profits of enterprises'), and therefore falling within article 7 of the Treaty for the Avoidance of Double Taxation (Convention for the Prevention of Double Taxation) and which are not attributable to a permanent establishment in accordance with article 5 of the Treaty.

It is thus found that, by virtue of the Treaty for the Avoidance of Double Taxation, the AT has no legitimacy to question the payment to an entity resident in the Netherlands, nor indeed the subsequent payment by that same entity to a third entity, in casu resident in the British Virgin Islands, given that we are in the field of the extraterritoriality of taxation.

It results from the case file, in particular from the information from the AFH, that there was an agreement between B and the entity resident in the British Virgin Islands, to which the Claimant, for lack of proof to the contrary, is completely unrelated, and thus had no way of knowing nor had the obligation to know. Even if this were not the case, the contract exists, the payment was made to an entity resident in the Netherlands, and the Claimant complied with the requirement for exemption from RF, not having for its part the Respondent activated any anti-abuse mechanisms possibly applicable.

In consequence, it is concluded that the correction effected has no legal basis, whereby it is tainted by defect of violation of law due to error regarding the presuppositions of law, which justifies its annulment in accordance with article 135 of the Code of Administrative Procedure, applicable in accordance with article 29, no. 1, paragraph d), of the RJAT and no. 2, paragraph c) of the LGT.

B.3 On the lack of reasoning of the tax act

As already previously decided in an arbitral decision in the context of Case no. 91/2012-T – CAAD: "The complete merit of defects in violation of law prejudices the examination of form and procedural defects, as results from the order of examination of defects provided in no. 2 of article 124 of the CPPT, subsidiarily applicable by virtue of the provisions of paragraph a) of no. 1 of article 29 of the RJAT.

In reality, the establishment of an order for the examination of defects is only justified by the eventual merit of the higher-order defects making it unnecessary to examine the remaining ones, because, if it were always necessary to examine whether all defects were present, the order of their examination would be irrelevant.

By the foregoing, given the merit of the defects in violation of law, the examination of the defect of lack of reasoning is prejudiced.

C. Decision

For these reasons, this Arbitral Tribunal decides:

a) To uphold the request for a declaration of illegality of the additional corporate income tax assessment impugned, and the corresponding compensatory interest assessment, annulling them; and

b) To order the Respondent to pay the costs of the proceedings, taking into account payments made in the meantime.

D. Case Value

The case value is fixed at € 86,515.06, in accordance with article 97-A, no. 1, a), of the Tax Procedure Code, applicable by virtue of paragraphs a) and b) of no. 1 of article 29 of the RJAT and no. 2 of article 3 of the Regulation of Costs in Tax Arbitration Proceedings.

E. Costs

The arbitration fee is fixed at € 2,754.00, in accordance with Table I of the Regulation of Costs in Tax Arbitration Proceedings, to be paid in full by the Respondent, given that its request was entirely dismissed, in accordance with articles 12, no. 2, and 22, no. 4, both of the RJAT, and article 4, no. 4, of the said Regulation.

Let it be notified.

Lisbon, Administrative Arbitration Centre, 5 February 2014.

The Arbitrators

(Manuel Luís Macaísta Malheiros - Presiding Arbitrator)

(José Pedro Carvalho)

(João Santos Pinto - Rapporteur)

The arbitral decision was drafted in accordance with the rules of the Orthographic Agreement of 1990.

Text prepared by computer, in accordance with article 131, no. 5, of the Code of Civil Procedure, applicable ex vi of article 29, no. 1, paragraph e), of the Tax Arbitration Regime.