Summary
Full Decision
ARBITRAL DECISION
The arbitrators constituting this Collective Tribunal hereby agree:
I – REPORT
A... – Branch in Portugal, with the unique number of legal entity..., branch in Portugal of B..., with domicile in ..., ..., ..., ..., came, pursuant to the provisions of no. 1 of article 2 of Decree-Law no. 10/2011, of 20 January, which established arbitration as an alternative means of jurisdictional resolution of disputes in tax matters, and Regulation no. 112-A/2011, of 22 March, to request the constitution of an Arbitral Tribunal for the examination of the legality of the self-assessment of the Contribution on the Banking Sector (CSB) for the period of 2015, self-assessed as per Doc. 3 and paid in the course of tax enforcement proceedings in (information contained at fl. 32 of the case file).
1. The respondent is the Tax and Customs Authority (hereinafter also designated as "Respondent" or "TA").
2. The request for constitution of the arbitral tribunal was accepted by the Honourable President of CAAD and automatically notified to the Respondent.
3. At issue in the present proceedings are the acts dismissing the Gracious Complaint and the self-assessment of the Contribution on the Banking Sector (CSB), issued by the Claimant in 2016 (the year to which the contribution relates) but determined on the basis of average liability balances determined during the year 2015.
3. Pursuant to the provisions of subparagraph a) of no. 2 of article 6 and subparagraph b) of no. 1 of article 11 of Decree-Law no. 10/2011, of 20 January, with the wording introduced by article 228 of Law no. 66-B/2012, of 31 December, the Deontological Council of CAAD designated the signatories to constitute the collective arbitral tribunal, who communicated acceptance of the appointment in accordance with the applicable terms and time limit.
4. The Parties were duly notified of this designation and did not manifest an intention to refuse it, in accordance with the provisions of article 11, no. 1, subparagraphs a) and b) of the RJAT, in conjunction with articles 6 and 7 of the Deontological Code.
5. The Claimant chose not to designate an arbitrator, and in accordance with the provisions of subparagraph c) of no. 1 of article 11 of the RJAT, the Arbitral Tribunal was constituted on 2018/06/05.
6. By order of 10/10/2018 the Tribunal, considering its futility, dispensed with the holding of the meeting provided for in article 18 of the RJAT, as well as the conduct of the witness inquiry procedure, since the parties disagreed only and substantially regarding the legal framework and/or conclusions and not regarding facts.
7. To substantiate the claim, the following is alleged in essence and in summary:
The Claimant is the branch in Portugal of B... (HEREINAFTER ONLY "B..."), a credit institution governed by German law, which has its registered office and actual management in Germany.
Since 2012 B... has ensured its presence in Portugal through the Claimant, which carries out the activity of credit granting, factoring and financial leasing.
The legal institute relating to the disputed tax was regulated by Regulation no. 121/2011, of 30 March, which in its article 6 established as a procedure and form of assessment a self-assessment regime, according to which this contribution is assessed annually by the taxpayer through the official declaration form no. 26.
The assessment and payment in question corresponded to the first act of subjection to taxation of this tax by the claimant, a fact that was due to the legislative amendment introduced by Law no. 7-A/2016, of 30 March ("State Budget Law for 2016"), which amended, in its article 185, the Regime of the Contribution on the Banking Sector.
Following this new rule of incidence, and in accordance with the terms of the form of assessment prescribed in the contribution regime, the claimant now submitted the self-assessment relating to the year 2015 in the amount of € 359,851.28.
However, considering that the self-assessment and payment were undue, it presented a gracious complaint, requesting the annulment of the aforementioned assessment, requesting, therefore, the respective refund, after concluding that it should not be subject to it.
However, the TA decided to dismiss the claim. It is from the dismissal of the claimant's claim that it submits the matter to the examination of this arbitral tribunal.
The Claimant considers that the TA's action was illegal due to express violation of legal norms to which it is subject as an entity applying Portuguese tax law, and the assessment carried out must necessarily be annulled as being illegal.
The Claimant also has the right to be compensated for the amount paid, with compensatory interest in accordance with article 43 of the LGT and 61 of the CPPT, that is, calculated until the effective refund of the tax paid, counted from the date of the dismissal of the gracious complaint.
8. In response, the TA defended itself by way of exception and, subsidiarily, by way of challenge.
9. By way of exception, the TA alleges in essence that a dilatory exception is verified because (i) the action has no object, since the claimant seeks the annulment of a tax relating to the year 2016 and the claimant challenges the tax relating to the year 2015, which constitutes a dilatory exception leading to dismissal of the instance; and (ii), on the other hand, there is an incompetence of the tribunal ratione materiae because it has no legal basis to examine the legality of the self-assessment of financial contributions but only of taxes, which gives rise to dismissal of the instance.
II Preliminary Determination
Exceptions
i) Unimpugnability of the impugned act, due to lack of object
The TA refers, to sustain the said exception, to the provisions of article 6, 2, of Regulation 121/2011, of 30 March, and subsequent amendments, which determines that "the basis of incidence is calculated by reference to the average annual balance of the final balances of each month, which have correspondence in the accounts approved in the very year in which the contribution is due". Hence the 'basis of incidence' will only be established at the moment of approval of accounts, approval which will occur in the very year in which it is due.
Furthermore, the Claimant self-assessed and paid the CSB relating to the year 2016 and not that relating to 2015.
In response to this exception, the Claimant affirms, to the extent relevant here, that, by arguing as mentioned, the TA considers that the basis of incidence of the CSB occurs/is verified on the day/moment of approval of accounts and not on the last day of the fiscal year in question.
When the legislator mentions that there is a correspondence in accounts approved in the very year in which the contribution is due, the expression "is due" refers to payment and not to incidence proper, and the moment of payment has nothing to do with the moment of determination of the tax base of the CSB. Consequently, if the monthly averages used are the monthly averages of the year 2015, the CSB in question can only be that relating to the year 2016. Hence the monthly balances are those of 1 January 2015 to 31 December 2015. The approval of accounts can in no way have constitutive effects, namely, for the purposes of the CSB, since it cannot alter the accounting recognition of a particular reality. Furthermore, the year appearing in Form Model 26 is the year 2016, since the Claimant could not have entered any other year, due to the fact that the Tax Authority Portal does not allow it.
Let us examine this point regarding the lack of object of the arbitral claim.
From the claim filed, the Claimant concludes by "annulment of the decision dismissing the gracious complaint presented and, indirectly, also by annulment of the act of self-assessment of the Contribution on the Banking Sector relating to the year 2015 paid by the Claimant".
The Claimant properly identified the act whose annulment it seeks (that of the CSB of 2015). From the grounds presented, the Claimant follows in the same vein (cf. points 37, 39, 55, 57, 60, 62, 65, 80, 81, 86, 254 of the pleading). Indeed, the Claimant presents as the basis of incidence of the self-assessment the average liability balances determined during the year 2015 and approved in 2016.
Given this, we have no doubts that the object sub iudice, delimited by the Claimant, is to determine the legality of the CSB which is based on facts occurring in 2015, so the alleged exception of lack of object of the arbitral claim is unfounded.
ii) Substantive incompetence of the tribunal
The respondent alleges that the Claimant aims to attack the legality of the norm providing for the CSB and not the respective self-assessment, since, in its view, the Claimant only attacked the illegality, by way of unconstitutionality of the CSB, an examination which is prohibited to the Arbitral Tribunal itself. For this purpose it cites decisions nos. 70/2012-T, of 31 October, 175/2013-T, of 16 January, which allows it to conclude that, in the present case, the Arbitral Tribunal is limited only to contending the legality of assessment of taxes and not to the examination of the legality of the norm permitting the act of assessment (in its unconstitutionality). It sustains its position on the provisions of articles 2, 1, a), and 4, 1, both of the RJAT, as well as articles 1 and 2, a), both of Regulation 112-A/2011.
Furthermore, it also adds to its argumentative framework incompetence of the tribunal ratione materiae by way of the fact that the CSB is a 'contribution' and not a tax. To support its position, it brings into the dispute articles 3, 2, and 4, both of the LGT.
In its view, contributions, as a tertium genus of tax, situated in an intermediate category between a fee and a tax, constitute pecuniary and coercive payments required by a public entity in consideration for an administrative service only presumptively caused or utilized by the taxpayer. Consequently, contributions are not unilateral taxes. Hence the constitutionality of the CSB is assessed not with regard to the principle of tax capacity but rather in light of the principle of equivalence. This is because the CSB constitutes a contribution, not only in formal sense but also materially, since it is possible to identify a consideration presumptively caused or utilized by the taxpayer — to strengthen the fiscal burden borne by the financial sector and to mitigate more effectively the systemic risks associated with it (cf. the preamble of Regulation 121/2011, of 30 March). It cites, in support of its thesis, various authors and some jurisprudence, concluding that the substantive incompetence of the present arbitral tribunal instance is manifest to know the present proceedings.
In a diametrically opposite position, the Claimant comes to affirm that the TA confuses two different types of procedural means: on the one hand contentious annulment of administrative acts and on the other hand contentious review of norms. In the present case, the Claimant reacts to a specific administrative act and not directly to certain legal norms. The claim formulated is clear in seeking the declaration of illegality of the dismissal of the gracious complaint and, indirectly, of the tax act of assessment of the CSB relating to 2015 and not the declaration of invalidity of any norm abstractly applicable. Being so, the arbitral claim serves as a means of challenge to the administrative act here in question — i.e. the dismissal of the gracious complaint lodged against the contribution assessment, with a view to its annulment, that is, as a means of elimination from the legal order of invalid administrative acts.
It further mentions that the claim for declaration of illegality of acts performed by the TA is a claim analogous to the claim for annulment of such acts which underlies judicial challenge, so the present Tribunal has competence to examine the legal validity of the contested acts.
It adds, then, that the ground of judicial challenge or the arbitral claim for declaration of illegality of administrative acts is any illegality – "an operative concept of illegality which means, very broadly, non-conformity with the legal order": "any tax act which, for whatever reason, is understood to violate legal norms (constitutional, international, legal or regulatory) will, for these purposes, be understood as an illegal act" (JOAQUIM FREITAS DA ROCHA, Op. Cit., p. 216). Hence the annulment of administrative acts based on violation of constitutional norms is thus within the scope of competence of ordinary courts and arbitral tribunals in tax matters, including verification of the illegality of acts which dismissed complaints against assessment of illegal and unconstitutional taxes.
As to the substantive incompetence of the tribunal by way of the fact that the CSB is a 'contribution' and not a tax, the Claimant calls into the debate the regime of the RJAT, understanding that this diploma encompasses in its material scope any "taxes" (taxes, fees, contributions…) — cf. subparagraph a) of no. 1 of article 2: "[the] declaration of illegality of acts of assessment of taxes (…)". The ratio legis was to ensure that the TA is not bound by Arbitral Tribunals to defend conduct which was not its own (but rather, for example, that of a municipality, an Autonomous Region or any other entity not within state tax administration). If the legislator had wished to have excepted the TA in that sense, the choice would be to expressly list the said exception in the subparagraphs of the article, in which types of dispute are framed to which the TA is not bound by Arbitral Tribunals, which effectively did not occur. It cites various CAAD jurisprudence. It concludes by the substantive competence of the present Tribunal.
Let us examine this and regarding the first ground.
The Claimant formulates no request for declaration of unconstitutionality nor any illegality of the norm, strictly speaking. It alleges, rather, the unconstitutional and illegal application of the regime relating to the CSB to its concrete case and, in its view, by virtue of various principles: that of prohibition of retroactivity of tax law, that of parliamentary law reservation, and that of equivalence as a criterion of the principle of tax equality.
On this point we follow the doctrine already solidified by the Arbitral Tribunal, which is contained in proc. 211/2018-T:
"Indeed, pursuant to subparagraph a), no. 1 of article 281 of the Constitution of the Portuguese Republic (CRP), it is the Constitutional Court which is competent to examine and declare the abstract unconstitutionality of any norms (abstract and concentrated control).
However, the Arbitral Tribunal, like any other court, may, or rather, must, decline to apply, incidentally, a norm which it considers unconstitutional (diffuse control), cf. the provisions of article 204 of the CRP.
Moreover, with regard to arbitral tribunals, this is what follows from no. 1 of article 25 of the RJAT when it refers "The arbitral award on the merits of the claim which terminates the arbitral proceedings is subject to appeal to the Constitutional Court in the part in which it refuses to apply any norm on the ground of its unconstitutionality or which applies a norm whose unconstitutionality has been raised.".
As to the second ground that would support an alleged substantive incompetence (by way of the fact that the CSB is a 'contribution' and not a tax), we follow the position also already crystallized before this tribunal, by way of proc. 139/2017-T, and also already adopted in proc. 437/2017-T:
"The RJAT expressly refers, in subparagraph a) of no. 1 of article 2, that the material scope of arbitration encompasses "the declaration of illegality of acts of assessment of taxes". But the TA believes that the fact that article 2 of Regulation 112-A/2011 used the expression "taxes" instead of maintaining that of "taxes" means that the Government will have wished to restrict the disputes to which the TA is bound to those relating to taxes. We do not endorse such a position, since such interpretation does not appear to be legally correct given the literal tenor and systematic articulation of the provisions in question. If any sense can be attributed to the literal-systematic interpretation of the provisions it is that the reference to "taxes" instead of "taxes" in article 2 of Regulation no. 112-A/2011, followed by express reference to no. 1 of article 2 of the RJAT and express enumeration of a set of exceptions, indicates that the 'legislator' of the Regulation did not have the restrictive intention invoked by the TA, since if so it would have made express reference to that restriction in the list of subparagraphs contemplating the exceptions. (In this sense see, inter alia, Arbitral Award rendered in process no. 312/2015-T, on analogous matter).
We follow the understanding expressed in the aforementioned Arbitral Award, also because it is understood that, "summoned the teleological and rational elements of legal interpretation also do not point in the direction of such restriction, but only to the "limitation of the scope of the TA's binding through the titularity of the powers to administer taxes", being that, moreover, the logical limit of the binding — not extending the restriction thus to those related to "contributions" also administered by it." The fact is that, in the case of the present proceedings, the procedure of assessment and collection of the CSB, even if we consider it inserted in the legal category of "contributions", does not differ in any way, in its nature and structure, from that of "taxes", since the TA acts as if they were taxes, as results even from the availability in the portal of the self-assessment. To which is added the clearly unilateral nature of the contribution in question, in everything similar to that which characterizes, typically, the tax. Hence there is no valid reason to exclude the binding of the TA, in such cases, to arbitrability. [...] It is therefore considered that the scope of arbitrability encompasses, as follows from the combined interpretation of articles 2 of the RJAT and Regulation 112-A/2011, the examination of claims relating to taxes whose administration is entrusted to the TA, with the exception of the cases listed in the subparagraphs of article 2 of Regulation 112-A/2011 — thus also encompassing claims relating to "contributions" administered by it. Consequently, and given that the CSB is a tax administered by the TA, whose procedure of assessment and collection is structurally identical to that of taxes, the arbitral tribunal is competent to settle the present dispute, regardless of whether this tax is to be classified as a contribution or as a tax."
Being so, we judge the invoked exception of substantive incompetence of the Arbitral Tribunal to be unfounded.
No other exceptions were invoked.
The request for arbitral pronouncement was filed within the time limit established in article 10 of the RJAT.
The Parties have legal personality and legal capacity, are legitimate regarding the request for arbitral pronouncement and are duly represented, in accordance with the provisions of articles 4 and 10 of the RJAT and article 1 of Regulation no. 112-A/2011, of 22 March.
There are no nullities whatsoever, so a decision must be rendered.
III Grounds
The Facts
Proven Facts:
The following facts are considered proven:
The Claimant is the branch in Portugal of B... (HEREINAFTER ONLY "B..."), a credit institution governed by German law, which has its registered office and actual management in Germany.
Since 2012 B... has ensured its presence in Portugal through the Claimant.
The Claimant never proceeded to the self-assessment of the CSB, nor was it charged by the tax administration since the beginning of its activity in Portugal.
On 05/09/2017, it filled out the Declaration Form 26 and submitted it, after self-assessing the CSB relating to the liabilities of the year 2015 in the total amount of € 359,851.28, which was paid in full, as evidenced by the documentary proof attached.
The self-assessment was carried out by the Claimant taking into account the average annual balance of final liability balances of each month of the year 2015, being carried out on the basis of accounting data relating to 31 December 2015.
Disagreeing, as it alleges, with the legality of the assessment, it presented a gracious complaint, which was deemed timely, and the same was dismissed and the respective Order communicated to the challenger by Letter of 21/12/2017.
It is, therefore, following the dismissal of the gracious complaint covered by the order of 19/12/2017, issued by the Deputy Director of the Director of Finance in Lisbon, that the Claimant came to request the pronouncement of the Arbitral Tribunal on the alleged illegality of the decision dismissing the gracious complaint and indirectly of the legality of the self-assessment of the CSB.
Unproven Facts
The Tribunal considers that no other fact relevant or essential to the examination of the claim was proven or unproven.
Grounds regarding proof
The judge (or the arbitrator) does not have the duty to rule on all the matters alleged, but rather the duty to select only that which is relevant to the decision, taking into account the ground (or grounds) of claim which substantiate(s) the claim filed by the claimant (see articles 596, no. 1 and 607, nos. 2 to 4, of the Civil Procedure Code, as amended by Law no. 41/2013, of 26/6), and record whether it is considered proven or unproven (cf. article 123, no. 2, of the Tax Procedure Code).
According to the principle of free evaluation of evidence, the Tribunal bases its decision, regarding the evidence produced, on its intimate conviction, formed from the examination and evaluation it makes of the means of proof brought to the proceedings and in accordance with its experience of life and knowledge of persons and the world (cf. article 607, no. 5, of the Civil Procedure Code, as amended by Law 41/2013, of 26/6).
Only when the evidential force of certain means is pre-established in law (e.g., full evidential force of authentic documents — cf. article 371, of the Civil Code) does the principle of free evaluation not prevail in the assessment of the evidence produced.
In the present case, the Tribunal formed its conviction on the basis of critical analysis of the documents attached by the parties which were not challenged and on the copy of the instructional administrative file, also considering that no controversy arose between the parties regarding the factual framework.
IV Grounds (cont.)
The Law
In the present case, it is important to know whether in 2016 the Claimant, as a branch of a non-resident credit institution, with registered office in a Member State of the European Union, is, or is not, subject to the incidence of the Contribution on the Banking Sector (CSB) and, if it is concluded that it is, when and how should it be assessed and collected.
What is effectively at stake is whether, considering the amendment introduced by Law 7-A/2016, of 30 March, to the CSB regime, approved by Law 55-A/2010, of 31 December, the claimant is or is not subject to that contribution.
The Claimant considers that, in relation to the year 2015, it is not subject to the CSB, since it is a branch of a credit institution with registered office outside Portugal, as provided for in article 2, 1, c), of the CSB regime.
For its part, the TA believes that the norm in question, in its application to the concrete case, apart from not suffering from any unconstitutionality, which in the year 2016 is a contribution due relating to accounts presented in that same year 2016, not least because the tax event (the approval of accounts) occurred in 2016, that is, after the entry into force of the law approving the CSB which came to cover also branches of credit institutions with registered office outside Portugal, so that from here no retroactive application of the norm in question results. Furthermore, it does not result from the norm any violation of the principle of legitimate expectations, given the non-existence of the right to immutability of tax law, there is no violation of the parliamentary law reservation, since article 141 of Law 55-A/2010 of 31 December (State Budget Law for 2011), stated the essential elements of the tax, proceeding to the definition of both the incidence (objective and subjective) and the "parameters" to apply in respect of the rates, leaving to Regulation 121/2011, of 30 March, and as stated in such legal diploma the refinement "of the concepts relevant to the determination of the basis of incidence established by Law no. 55-A/2010 (...)". Moreover, no violation of the principle of equivalence as a criterion of the principle of tax equality results, since what is intended with the CSB is to "bring the tax burden borne by the banking sector closer to that burdening the rest of the economy and to contribute more intensely to the effort to consolidate public accounts and prevent systemic risks" — State Budget, Point III, 2.2.3.2.
The central and particularly critical thema decidendum has already been addressed by various decisions of the Arbitral Tribunal, namely by decisions 139/2017-T and 437/2017-T, with which we concur and which we will follow closely.
Concretely, it is important to know whether the self-assessment of CSB in the amount of € 359,851.28, relating to the year (of the contribution) of 2016, which was paid on 7 September 2017, is due or not.
We make our own the words pronounced in the context of decision 139/2017-T:
"The CSB was created by the SOB for 2011. However, only with the SOB for 2016 (Law 7-A/2016), was its personal incidence extended to also include branches of non-resident credit institutions, that is, with registered office in other States, namely, in Member States of the European Union. The SOB for 2016 entered into force in March 2016.
The real basis of incidence of the CSB, applied to branches, according to the terms referred to, is the taxable matter determined by the average balances of liabilities determined by accounting, with reference to all months of the year. For their part, these average balances can only be determined with accuracy after the approval of accounts, since until then, adjustments or corrections may be made, determined by account audits and by consequent social decision.
Thus, there is no doubt that the tax designated by CSB applies to taxable facts occurring throughout the economic year, provided that they are fully verified and consolidated as of 31 December of each year.
The legal regime of the Contribution on the Banking Sector (CSB) introduced by the SOB for 2016, is contained in its article 185, which integrates chapter XVI of the SOB, under the heading "Other fiscal provisions".
This provision establishes the following:
"Article 185
Amendment to the regime of the contribution on the banking sector
Articles 2, 3 and 4 of the regime that creates the contribution on the banking sector, approved by article 141 of Law no. 55-A/2010, of 31 December, shall have the following wording:
"Article 2
(...) 1 – (...)
a) ...
b) ...
c) Branches in Portugal of credit institutions with principal and actual registered office outside Portuguese territory.
2 - For the purposes of the above, credit institutions, branches and agencies are those defined, respectively, in subparagraphs w), u) and ll) of article 2-A of the General Regime of Credit Institutions and Financial Companies, approved by Decree-Law no. 298/92, of 31 December.
Article 3
[...] a) Liabilities determined and approved by the taxpayers deducted, where applicable, from liability items that integrate own funds, deposits covered by the guarantee of the Deposit Guarantee Fund, the Mutual Agricultural Credit Guarantee Fund or by a system officially recognized guarantee of deposits pursuant to article 4 of Directive 2014/49/EU of the European Parliament and of the Council, of 16 April 2014, or considered equivalent pursuant to subparagraph b) of no. 1 of article 156 of the General Regime of Credit Institutions and Financial Companies, approved by Decree-Law no. 298/92, of 31 December, within the limits provided for in the applicable legislation, and deposits in the Central Cashier made up of mutual agricultural credit boxes belonging to the integrated system of mutual agricultural credit, under article 72 of the Legal Regime of Mutual Agricultural Credit and Agricultural Credit Cooperatives, approved by Decree-Law no. 24/91, of 11 January, and republished by Decree-Law no. 142/2009, of 16 June.
Article 4
[...] 1 - The rate applicable to the basis of incidence defined by subparagraph a) of the preceding article varies between 0.01% and 0.110% depending on the amount determined."
For its part, Regulation no. 165-A/2016, of 14 June, provides as follows:
"Law no. 7-A/2016, of 30 March, which approves the State Budget Law for 2016, amended the regime of the contribution on the banking sector, namely the scope of subjective and objective incidence, as well as the interval of rates applicable to the basis of incidence defined by subparagraph a) of article 3 of that regime, approved by article 141 of Law no. 55-A/2010, of 31 December (State Budget Law for 2011).
Consequently, Regulation no. 121/2011, of 30 March, which regulates the said contribution, as well as the official form declaration no. 26, through which taxpayers effect the corresponding assessment of the contribution, must be amended. The Bank of Portugal was heard.
Thus:
The Government orders, by the Minister of Finance, pursuant to the provisions of article 8 of the regime of the contribution on the banking sector, approved by article 141 of Law no. 55-A/2010, of 31 December, as follows: Article 1 Amendment to Regulation no. 121/2011, of 30 March Articles 2, 3, 4 and 5 of Regulation no. 121/2011, of 30 March, amended by Regulations nos. 77/2012, of 26 March, 64/2014, of 12 March, and 176-A/2015, of 12 June, shall have the following wording:
Article 1
Amendment to Regulation no. 121/2011, of 30 March Articles 2, 3, 4 and 5 of Regulation no. 121/2011, of 30 March, amended by Regulations nos. 77/2012, of 26 March, 64/2014, of 12 March, and 176-A/2015, of 12 June, shall have the following wording:
"Article 2
1 - [...]
a) [...]
b) [...]
c) Branches in Portugal of credit institutions with principal and actual registered office outside Portuguese territory.
For the purposes of the above, credit institutions, branches and agencies are those defined, respectively, in subparagraphs w), u) and ll) of article 2-A of the General Regime of Credit Institutions and Financial Companies, approved by Decree-Law no. 298/92, of 31 December.
2 - For the purposes of the above, credit institutions, branches and agencies are those defined, respectively, in subparagraphs w), u) and ll) of article 2-A of the General Regime of Credit Institutions and Financial Companies, approved by Decree-Law no. 298/92, of 31 December.
Article 3
[...]
a) Liabilities determined and approved by the taxpayers deducted, where applicable, from liability items that integrate own funds, deposits covered by the guarantee of the Deposit Guarantee Fund, the Mutual Agricultural Credit Guarantee Fund or by a system of officially recognized guarantee of deposits pursuant to article 4 of Directive 2014/49/EU of the European Parliament and of the Council, of 16 April 2014, or considered equivalent pursuant to subparagraph b) of no. 1 of article 156 of the General Regime of Credit Institutions and Financial Companies, approved by Decree-Law no. 298/92, of 31 December, within the limits provided for in the applicable legislation, and deposits in the Central Cashier made up of mutual agricultural credit boxes belonging to the integrated system of mutual agricultural credit, under article 72 of the Legal Regime of Mutual Agricultural Credit and Agricultural Credit Cooperatives, approved by Decree-Law no. 24/91, of 11 January, and republished by Decree-Law no. 142/2009, of 16 June;
Article 5
[...]
1 - The rate applicable to the basis of incidence defined by subparagraph a) of article 3 is 0.110% on the amount determined."
Still of relevance to the present decision, the provisions of articles 2 and 3 of the aforementioned Regulation should be noted:
"Article 2
Declaration form
The new official form declaration no. 26 and its respective instructions are approved, in the annex to this regulation, of which it forms an integral part and which replaces that contained in the annex to Regulation no. 121/2011, of 30 March, amended by Regulation no. 77/2012, of 26 March.
Article 3
Entry into force and effective date
This regulation enters into force on the day following its publication, taking effect from 1 January 2016." (emphasis ours)."
Having made these references, and abstracting ourselves for now from the questions raised by the Claimant regarding the violation of the principles of tax legality and parliamentary law reservation, considering only the legal regime resulting from these legal norms, it is easily concluded and without "need for great legal constructions" that the legislator was clear regarding the entry into force of the amendments introduced under the CSB, which can only apply to facts occurring in 2016, with the final note of retroactive effect from 1 January 2016.
Given this, and limiting our analysis to the question prioritarily stated, there is no doubt that nothing in the legal regime instituted by the SOB for 2016 and regulated by the aforementioned Regulation, applicable to the CSB, allows us to conclude, as the TA did in the impugned acts, that in 2016 this contribution was to apply to facts occurring in 2015.
Quite the contrary. The legislator was clear when defining the scope of the real incidence of this contribution, applicable also to branches, from the year 2016. More still, it went even further when, in article 3 of the Regulation, it provides that the entry into force and effective date of the new regime are delimited to the year 2016.
Now, it is not seen that we have any other criterion to apply to the case, except the same one which constitutes the rule in all taxes, taxes or contributions of a fiscal nature, as the one we now analyze – that the new law applies to the future and only to the future. But, if there were any doubts, the letter of the law is absolutely clarifying when it expressly states that it applies only and solely from the year (fiscal year) 2016.
Moreover, the concrete situation under examination could be compared, by absurdum, to the attempt to apply the new rules instituted by the SOB of 2016 in the matter of personal income tax to tax declarations presented in the year 2016.
To which is added, as clearly results from article 12 of the General Tax Law, that tax norms apply to facts occurring after their entry into force (no. 1) and when they are of successive formation (as in the present case) the new law only applies to the period from the date of its entry into force (no. 2).
(...) the regime instituted by the SOB for 2016 applies, by virtue of the very legal text governing it, only for the future, that is, to tax facts occurring in the 2016 period.
The concrete application of this new regime, carried out by the TA, expressly contradicts the very legal regime instituted by the SOB for 2016 by attempting to assess this very contribution in this same year by reference to tax facts occurring in 2015. It will be said that this is a flagrant error in the application of the law, exclusively the responsibility of the TA and without any legal support for doing so, violating from the outset the very letter of the law.
It will be said that, as is obvious, the application of the CSB to branches, created by the SOB for 2016, making it apply to tax facts that occurred in the past (in 2015), when such obligation did not exist, violates constitutional principles (...), with emphasis on the principle of non-retroactivity of tax law.
(...) There is no doubt, therefore, that the new CSB regime instituted applies to the year 2016, which is equivalent to saying that the first self-assessment of CSB should occur in 2017, by reference to tax facts formed throughout the year 2016."
Given this, the unconstitutionalities and non-conformity with the law of the European Union alleged by the Claimant are prejudiced by the response to the first illegality invoked, substantiated in the vice of violation of law due to error regarding the grounds, which is verified and which necessitates the annulment of the impugned tax acts.
In these terms, the impugned self-assessment of CSB suffers from the vice of violation of law, due to error regarding the factual and legal grounds, embodied in the erroneous application of the provisions of article 2, 1, c), and 2, both of the CSB regime, in the wording resulting from Law 7-A/2016, of 30 March, and in article 2, 1, c), and 2, of Regulation 121/2011, of 30 March, in the wording resulting from Regulation 165-A/2016, of 14 June, which justifies its annulment (article 163, 1, CPA, subsidiarily applicable, by virtue of the provisions of article 2, c), LGT). The act dismissing the gracious complaint attached to the proceedings, insofar as it maintained that self-assessment of CSB, suffers from the same vitiating vice, so its annulment is also called for (article 163, 1, CPA, subsidiarily applicable, by virtue of the provisions of article 2, c), LGT).
REGARDING THE REFUND OF THE AMOUNT PAID AND THE PAYMENT OF COMPENSATORY INTEREST
The Claimant petitions for condemnation of the TA to refund the CSB unduly paid, in the amount of € 359,851.28, plus the respective compensatory interest.
Article 24, 1, b), of the RJAT, provides that the arbitral award on the merits of the claim from which no appeal or challenge is available binds the tax administration from the end of the time limit provided for appeal or challenge, and the latter must, in the exact terms of the success of the arbitral award in favor of the taxpayer and until the end of the time limit provided for voluntary execution of sentences of tax courts, restore the situation that would have existed by adopting the acts and operations necessary for the effect, which must be understood, in conformity with the provisions of article 100 of the LGT, applicable ex vi subparagraph a) of no. 1 of article 29 of the RJAT, as encompassing the payment of compensatory interest, in accordance, moreover, with the provisions of no. 5 of the same article 24 of the RJAT.
Article 43, 1, LGT, determines that "compensatory interest is due when it is determined, in a gracious complaint or judicial challenge, that there was an error attributable to the services from which results payment of the tax debt in an amount greater than that legally due", it resulting from no. 2 of the same article that it is also considered that "there is an error attributable to the services in cases in which, although the assessment is carried out on the basis of the taxpayer's declaration, the latter has followed, in its completion, the generic guidelines of the tax administration, duly published"; for its part, no. 5 of article 61 of the CPPT, in the part here to be considered, determines that interest is counted "until the date of processing of the respective tax credit note, in which they are included".
In the concrete case, having been proven that the Claimant proceeded to the full payment of the amount of self-assessed CSB, it has the right, in accordance with the provisions of articles 24, 1, b), RJAT, and 100 of the LGT, to the refund of that amount of CSB unduly paid — € 359,851.28 —, plus compensatory interest, according to the terms established in articles 43, 1, LGT, and 61 of the CPPT, calculated from the date of the dismissal of the gracious complaint no. ...2017..., at the rate resulting from no. 4 of article 43 of the LGT, until the date of processing of the respective tax credit note, in which they are included.
V Decision
In the terms set forth, the arbitrators in this Arbitral Tribunal agree to judge the request for arbitral pronouncement fully granted and, consequently:
To declare illegal and annul, due to error regarding the factual and legal grounds, the act dismissing the gracious complaint no. ...2017...
To declare illegal and annul, due to error regarding the factual and legal grounds, the act of self-assessment of CSB contained in Guide no..., in the amount of € 359,851.28 (three hundred fifty-nine thousand eight hundred fifty-one euros and twenty-eight cents);
To judge granted the petition condemning the Tax and Customs Authority to refund to the Claimant the amount of CSB referred to above, plus compensatory interest calculated, at the legal rate, from the date of the dismissal of the gracious complaint no. ...2017... until the date of processing of the respective tax credit note, in which they are included;
To condemn the Tax and Customs Authority to payment of the costs of the proceedings.
Value of the Proceedings
Taking into account the provisions of article 3, no. 2 of the Regulation of Costs of Tax Arbitration Proceedings and also that provided for in article 306, no. 2 of the Civil Procedure Code, and also no. 1, subparagraph a) article 97-A of the Tax Procedure Code, the value of the proceedings is set at 359,851.28€.
Costs
In accordance with no. 2 of article 22 of the RJAT, the amount of the arbitral fee is set at 6,120.00€ (six thousand one hundred twenty euros), in accordance with Table I attached to the Regulation of Costs in Tax Arbitration Proceedings, to be borne by the Tax and Customs Authority.
Lisbon, 28 December 2018
The Collective Arbitral Tribunal
José Poças Falcão
Ricardo Marques Candeias
José Ramos Alexandre
Frequently Asked Questions
Automatically Created