Summary
Full Decision
ARBITRAL DECISION
I - REPORT
A - Identification of the Parties
Claimant: A..., Lda., collective taxpayer identification number n.º..., with registered office at ..., n.º..., ..., hereinafter referred to as Claimant or Taxpayer.
Respondent: Tax and Customs Authority, hereinafter referred to as Respondent or TA.
The Claimant filed a request for constitution of an Arbitral Tribunal in tax matters and a request for arbitral decision, pursuant to the provisions of paragraph a) of article 2.º, n.º 1 and paragraph a) of article 10.º, n.º 1, both of Decree-Law n.º 10/2011, of 20 January (Legal Regime of Arbitration in Tax Matters), hereinafter abbreviated as LRAT.
The request for constitution of the Arbitral Tribunal was accepted by the President of the Centre for Administrative Arbitration (CAAD), and in accordance with the provision of paragraph c) of article 11.º, n.º 1 of Decree-Law n.º 10/2011, of 20 January, as amended by article 228.º of Law n.º 66-B/2012, of 31 December, the Tax Authority was notified on 2018-04-06.
The Claimant did not proceed with the appointment of an arbitrator, wherefore, pursuant to the provisions of n.º 1 of article 6.º and paragraph b) of article 11.º, n.º 1 of Decree-Law n.º 10/2011, of 20 January, as amended by article 228.º of Law n.º 66-B/2012, of 31 December, the Deontological Council appointed Dr. Rita Guerra Alves as Arbitrator, accepted by her in accordance with legal provisions.
On 2018-05-29, the parties were duly notified of this appointment, and did not manifest any will to refuse the appointment of the arbitrator, in accordance with article 11.º n.º 1, paragraphs a) and b) of LRAT and Articles 6.º and 7.º of the Deontological Code.
The Singular Arbitral Tribunal was regularly constituted on 2018-06-18 to consider and decide the subject matter of the present dispute, and on that same day the Tax and Customs Authority was automatically notified, as appears from the respective minutes.
Witness evidence was listed, and in the procedural follow-up the holding of the meeting referred to in article 18.º of LRAT was accepted by both parties.
The parties possess legal personality and legal capacity, are legitimate and are represented (articles 4.º and 10.º, n.º 2, of the same instrument and 1.º of Ordinance n.º 112-A/2011, of 22 March).
The proceedings do not suffer from defects that would invalidate them.
B - CLAIM
The Claimant petitions for the declaration of illegality of the tax acts establishing Value Added Tax (VAT) liabilities, n.ºs... –...–...–...–...–..., corresponding to the fiscal years 2012 and 2013, in the total amount of € 33.738,03 (thirty-three thousand seven hundred and thirty-eight euros and three cents).
C - GROUNDS FOR CLAIM
To support its request for arbitral decision, the Claimant alleges, with a view to the declaration of illegality of the tax acts establishing Value Added Tax (VAT) liabilities already described in point 1, the following:
The Claimant's activity is retail trade in fuel for motor vehicles in specialized establishments, which corresponds to CAE code 47300.
It is classified under the Normal VAT regime, with Monthly periodicity, by choice.
In compliance with the determination in service order n.º OI2015..., of 2015/09/18, the Claimant was subject to an inspection action by the Tax Inspection of the Finance Department of Lisbon.
The said inspection action began on 2015/12/15, with focus on the year 2012, arising from a control action on the tax situation regarding VAT on the values mentioned by the taxpayer in Field 40 of the Periodic VAT Declarations (Adjustments in favour of the taxpayer).
From which it resulted that the adjustments in favour of the taxpayer are improper due to incorrect calculation of the VAT amount subject to adjustment and failure to present documents relating to the sale of fuels that prove the value of revenue obtained and consequent accounting.
Resulting in a correction of a purely arithmetic nature in the amount of €22.769,02.
In fact, it resulted from the report of the said inspection that the taxpayer adjusted VAT in excess of what was assessed in each tax period mentioned, since in accordance with the provisions of articles 69.º to 75.º of CIVA the determination of VAT payable to the State is calculated on the basis of article 70.º of CIVA, that is, the VAT rate is applied to the calculated margin, and the adjustment in favour of the taxpayer was calculated by directly deducting from the revenues assumed as relating to sales with card B..., the VAT contained therein.
Furthermore it concludes that for fuel sales the taxpayer did not present any documents justifying the sales carried out, either in its own name or through card B....
It is certain that in the scope of the Inspection, as well as in the scope of the Administrative Appeal, if doubts existed and the administration understood that documents relating to fuel sales should be presented to prove the value of revenue obtained, such elements should have been requested by the inspection and by the Tax Inspector who conducted the administrative appeal.
The confusion or doubts that may be raised regarding the calculation of VAT in the year 2012 was simply due to the fact that in February 2012 the fuel sales system was altered.
In fact, C... altered the fuel sales system in February 2012.
Until then, fuel purchases were purchased by the claimant directly from C..., subsequently selling directly to the end consumer.
In this situation all purchases and sales went accounting through the Claimant and this determined VAT in accordance with the margin it had in each type of fuel.
However, as of February 2012 the system was altered, the claimant continued to invoice the customer directly for all fuels, except B....
In fact, as of February 2012, B... is sold by the fuel reseller, but accounting, does not go through the reseller.
The claimant sells B... fuels in the name of C..., at no point does the value corresponding to sales of this fuel pass through the claimant's accounts.
The claimant's service provision is paid by C..., subsequently, through a credit note.
Now, monthly the claimant sent to its tax advisor the total revenue obtained, the total revenue from B... and the total revenue subtracting B....
Since until then the tax advisor accounted for all fuels, it continued during the year 2012, monthly, to declare as revenue the totality of the margin of fuels sold, including the value of B....
However, incorrectly, since B... sold did not form part of the revenue of A..., LDA.
From this it resulted that during the year 2012 the claimant assessed VAT in excess of what was actually due and when it became aware of the error proceeded to adjust it in the months of October, November and December.
If we verify the total of sales invoices (called "Z") we can verify that the accounting amounts are in accordance with invoicing.
In fact it is confirmed that the value of sales made with card B... was incorrectly included from February to December 2012.
It is proven beyond doubt that by including sales with card B... they influenced the margin regime to which fuel resellers are subject under the VAT regime.
Under n.º 1 of article 70.º of CIVA, the taxable value of supplies covered by this regime corresponds to the difference, verified in each tax period, between the value of fuel supplies carried out, VAT excluded, and the value of acquisition of the same fuels, VAT excluded.
Whereas under n.º 3 of the said article, in determining the value of supplies, deliveries of fuels carried out on behalf of the distributor are not taken into account.
Now, B... are precisely deliveries of fuels carried out on behalf of the distributor, in this case, C....
In cases of B..., the reseller only receives, after the fact, a commission for the service provided to C....
These values cannot be considered on the basis of the sales margin.
By oversight of the tax advisor at the time, B... fuel deliveries were included in the VAT calculation in accordance with article 69.º of CIVA (margin) from which resulted VAT assessed in excess of what was due.
Now, if we calculate the values of sales with and without card B...;
If we verify the values of purchases;
If we verify the components of VAT subject to the normal regime;
If we calculate the VAT to be assessed from the margin regime + normal regime and compare it with the VAT actually assessed in field 4 of the declarations,
We find that there is VAT assessed in excess in the amount of €23.079,85.
In that sense it is proven that the VAT adjustments made in the months of October, November and December were correctly calculated.
In truth, if the totality of B... was included in calculating the VAT assessed in excess, in the same way the totality of B... should be considered to correct the excess values.
This is because B... does not fall under the margin regime, under n.º 3 of article 70.º of CIVA.
The claimant complied with the provisions of articles 69.º and 70.º of CIVA, the tax was assessed by the reseller (claimant) on the basis of the actual margin of sales, with the taxable value of supplies covered by the margin regime corresponding to the difference between the value of fuel supplies carried out and the value of acquisition of the same fuels.
On the calculated margin the claimant applied the respective tax rate.
Under n.º 3 of article 70.º of CIVA, in determining the value of supplies, deliveries of fuels carried out on behalf of the distributor are not taken into account.
This is exactly what the taxpayer did.
The Claimant concludes by pleading for the annulment of the additional VAT assessments made for the year 2012 for periods 10, 11 and 12, there is an error of the tax administration regarding the qualification of the tax act which should determine the annulment of the assessment of the tax that is the subject of the present administrative appeal, with the legal consequences thereof.
D - RESPONSE OF THE RESPONDENT
The Respondent, duly notified for this purpose, timely presented its response, in which, in brief summary, alleged the following:
The Claimant is registered for the exercise of the activity of "RETAIL TRADE IN FUEL FOR MOTOR VEHICLES, SPECIALIZED ESTABLISHMENTS", which corresponds to CAE code 47300, having commenced its activity on 2008-01-02.
It is governed by the liquid fuel taxation regime applicable to resellers in which, under article 69.º of CIVA, the tax due for gasoline, diesel and premium diesel carburant supplies carried out by resellers is assessed by them on the basis of the actual sales margin.
In compliance with service order n° 012015..., the Claimant was subject to an internal partial-scope inspection in the area of VAT for the year 2012, with the objective of ascertaining whether the amounts adjusted in Field 40 - Adjustments in favour of the taxpayer - complied with the requirements of article 78.º of CIVA, that is, whether they were duly supported and in accordance with the accounts.
The Claimant, when making sales through those cards, used the margin regime to determine the tax due and, when making the adjustments, did not use such regime, having deducted all the tax contained in those sales.
The Claimant adjusted VAT in excess, to quantify this excess, the tax inspectors needed proof elements that would allow them to conclude without doubt what would have been the Claimant's margin in those sales and thus calculate the VAT relating to that margin.
For fuel sales the taxpayer did not present any documents justifying the sales carried out, either in its own name or through card B....
The adjustments in favour of the taxpayer are improper: For incorrect calculation of the VAT amount subject to adjustment; and failure to present any documents relating to fuel sales that prove the value of revenue obtained and consequent accounting;" (our emphasis)
The Respondent concludes by pleading for the lack of merit of the claim, for being unproven, and consequently for the dismissal of the Respondent from the claim.
E - FACTUAL FINDINGS
The factual findings were based on the position assumed by each of the parties and not contradicted by the opposing party, critical analysis of the documents attached to the case file, and the witness evidence produced.
Thus, regarding factual matters considered relevant, this Tribunal considers the following facts as established:
The Claimant is a legal entity that carries on the activity of retail trade in fuel for motor vehicles in specialized establishments, which corresponds to CAE code 47300.
It is classified under the Normal VAT regime, with Monthly periodicity, by choice.
C... altered the fuel sales system in February 2012.
Until then, fuel purchases were purchased by the claimant directly from C..., subsequently selling directly to the end consumer.
As of February 2012 the system was altered, the claimant continued to invoice the customer directly for all fuels, except B....
In accordance with service order n.º OI2015..., of 2015/09/18, the claimant was subject to an inspection action by the Tax Inspection of the Finance Department of Lisbon.
From the said service order resulted a correction of a purely arithmetic nature in the amount of €22.769,02.
Subsequently, the Tax Authority issued additional VAT assessments n.ºs ... –...–...–...–...–..., corresponding to fiscal periods 2012/10, 2012/11, 2012/12, 2013/01, 2013/03, 2013/04, 2013/05, in the total amount of € 33.738,03.
The adjustments in favour of the taxpayer are improper: For incorrect calculation of the VAT amount subject to adjustment; and failure to present any documents relating to fuel sales that prove the value of revenue obtained and consequent accounting.
On 20.01.2017, the Claimant filed an administrative appeal, instituted under n.º ...2017..., which was, by decision of 29 December 2017, dismissed.
F - UNPROVEN FACTS
Of the facts with interest for the decision of the case, contained in the petition, subject to concrete analysis, those not contained in the factual findings described above were not proven.
G - ISSUES TO BE DECIDED
Given the position of the parties, it is necessary to consider and decide on:
(i) The declaration of illegality of the tax acts establishing Value Added Tax (VAT) liabilities, n.º ... –...–...–...–...–..., corresponding to the fiscal years 2012 and 2013, in the total amount of € 33.738,03 (thirty-three thousand seven hundred and thirty-eight euros and three cents).
(ii) The payment of compensatory interest;
H - MATTERS OF LAW
The central issue to be determined by this Arbitral Tribunal concerns the appreciation of the legality of the acts assessing Value Added Tax (VAT), n.º ... –...–...–...–...–..., corresponding to the fiscal years 2012 and 2013.
Accordingly, from the present case file it results in summary that the Claimant carries on the activity of retail trade in fuel, in the course of which it purchases fuel from the distributor ("C...") and sells that fuel to the end consumer.
Furthermore it also provides a service to the Distributor ("C..."), which consists of the use of the Claimant's fuel station by the user of the service/card "B...", through which fuel sales are made directly by the Distributor ("C...").
Thus, in light of the factual findings taken as proven, we shall follow the liquid fuel taxation regime applicable to resellers, provided for in articles 69.º to 75.º of the Value Added Tax Code (CIVA), from which it results that the taxable value in the aforementioned operations falls within the calculation of the tax under the provisions of article 70.º of CIVA.
Accordingly, we emphasize, for this purpose, the provision of article 70.º of the VAT Code:
Taxable Value
1 - For the purposes of the provision of the preceding article, the taxable value of supplies covered by this regime corresponds to the difference, verified in each tax period, between the value of fuel supplies carried out, VAT excluded, and the value of acquisition of the same fuels, VAT excluded.
2 - On the calculated margin, resellers must apply the respective tax rate.
3 - In determining the value of supplies, deliveries of fuels carried out on behalf of the distributor are not taken into account.
Referring to the case file, we find that the Claimant, in calculating the margin, accounts for the values of fuel supplies carried out and the value of fuel acquisitions, without taking into account deliveries of fuels carried out on behalf of the distributor (B...).
In fact, for fuel sales the taxpayer should have presented documentation of those sales; however, it did not present any documents justifying the sales carried out, either sales carried out in its own name or sales presented through card B....
In light of the legislation set forth, let us now examine who bears the burden of proof regarding the facts constitutive of the right which the Claimant asserts, specifically regarding the value of the transactions now under analysis and the declaration and correction of VAT.
Now it results from article 74.º n.º 1 of the LGT that: "the burden of proof of the facts constitutive of the rights of the tax administration or of the taxpayers falls on whoever invokes them," in consonance with article 342.º n.º 1 of the CC, "He who invokes a right is bound to prove the facts constitutive of the asserted right." (our underlining)
Furthermore, on the question of burden of proof, there is extensive case law holding that the TA bears the burden of proving the verification of the legal binding prerequisites that legitimate its action and that the taxpayer bears the burden of proving the facts that operate as support for the claims and rights it invokes. (see Arbitral Process n.º 236/1014-T of 4 May 2015).
"Consequently, the Tax Administration bears the burden of proving the verification of the legal binding prerequisites that legitimate its action, for which it must prove the facts constitutive of which the administrative-tax decision legally depends with certain content and with certain meaning. For his part, the taxpayer bears the burden of proving the facts that operate as support for the claims and rights it invokes." (...) "As such, in accordance with the provision of n.º 1 of article 74.º of the LGT, it falls to the Claimant to demonstrate the bases and factual situations on which the adjustments, disallowances and adjustments promoted by it are based and whose relevance and tax consistency it asserts, such that the burden of clarifying, proving and documenting the operations in question and their justification falls on the Claimant." (our bold)
(...) In this sequence, it should further be noted that it results from article 75.º, n.º 1 of the LGT that declarations of taxpayers, presented in accordance with the provisions of the law, as well as the data and calculations recorded in their accounts or records, when organized in accordance with commercial and tax legislation, are presumed to be true. However, this presumption ceases notably if such declarations, accounts or records, or their supporting data, present omissions, errors and inaccuracies or if well-founded indications are found that they do not reflect or impede knowledge of the actual taxable matter of the taxpayer (article 75.º, n.º 2, paragraph a) of the LGT). Recall also that, under n.º 3 of article 75.º of the LGT, "[t]he probative value of taxpayers' computer data depends, except as otherwise provided by special law, on the provision of documentation relating to its analysis, programming and execution and on the possibility of the tax administration to confirm it." (...) Now, whenever paragraph a) of n.º 2 of article 75.º of the LGT applies, "the burden of proof of the facts declared or recorded in their accounts or records about which there are evidentiary doubts shall fall on the taxpayer", such that "doubts that subsist in the judicial proceeding about the factual matter cannot be regarded as well-founded doubts" for the purposes of n.º 1 of article 100.º of the CPPT (see thus Jorge Lopes de Sousa, Tax Procedure Code annotated and commented, vol. II, 6th ed, 2011, p. 133).
Therefore the burden falls on the Claimant of effective demonstration of the recorded facts and the reasons underlying the adjustments made in the accounts, it not being sufficient that doubt remain as to the viability of their justification, since the provision of n.º 1 of article 110.º of the CPPT has its crucial application when it is the Tax Administration that asserts the existence of the tax facts and their quantification (see thus the decision of the Supreme Administrative Court of 26.2.2014, case n.º 0951/11). In this manner, the evidence produced must ensure, with the required certainty, that the adjustments made possess sufficient consistency and materiality in light of the justifications that underlie them.
In this same sense, regarding the distribution of burden of proof, reference is made to the decision of the Supreme Administrative Court of 26.2.2014, case n.º 0951/11:
The said decision: "It is therefore necessary to answer the question – purely one of law, as we have already stated, and therefore within the scope of the powers of cognition of this Supreme Court – of determining on whom falls the burden of proving such fact, against whom the question must be decided as to whether the said improvements were or were not transferred. (...)
Thus, it is necessary to recall, briefly and synthetically, the rules governing the distribution of burden of proof: in principle, the TA bears the burden of proving the verification of the legal (binding) prerequisites of its action, particularly if aggressive (positive and unfavorable) and, conversely, the administered party bears the burden of presenting sufficient proof of the illegality of the act when such prerequisites are shown to be verified, a solution now established by article 74.º, n.º 1 ("The burden of proof of the facts constitutive of the rights of the tax administration or of the taxpayers falls on whoever invokes them"), of the LGT and which at that time should already be considered applicable because it corresponds to the general rule of article 342.º of the Civil Code (CC), whereby whoever invokes a right bears the burden of proving the constitutive facts, with the counterparty bearing the burden of proving the imperative, modifying or extinctive facts.
However, this will not always be the case. The burden of proof will vary depending on the type of administrative act in question, the question of its distribution having to be decided "in accordance with the position the parties occupy in the proceeding and with the type of legal relationship that constitutes its subject matter and, consequently, in the area of litigation for annulment, with the type of annuled act, as the law characterizes or defines its constituent elements" (See, among all, the following decision of the Litigation Section for Tax Matters of the Supreme Administrative Court: – of 17 April 2002, rendered in case n.º 26.635, published in the Appendix to the Official Journal of 8 March 2004. (...) To proceed with the correction of the declarations (and consequent additional assessment of the tax considered to be unpaid), the TA, particularly when it believes that costs or income were declared that do not correspond to reality (those because non-existent or higher than actual, the latter because lower than actual), must substantiate its judgment formally and substantively, with judicial review able to extend to both aspects of the substantiation (the formal and the material). (...)
Thus, in the present case, we can advance the following conclusions, in accordance with case law long established in tax courts: because the additional IRC assessment is based on the TA's non-recognition of a portion of the acquisition value (relating to expenses declared for the carrying out of the improvements), it falls to the TA to prove that the legal prerequisites are verified that legitimate its action, that is, to demonstrate the existence of serious indications that the transfer of the improvements whose value forms part of the acquisition value did not occur; once that proof is made, the burden of proving the existence of that transfer, which it alleged as the basis for its right to see such costs deducted negatively in calculating the capital gains and consequently in its taxable matter, falls on the Taxpayer; in this case, it will not be sufficient for the Taxpayer to create doubt as to its veracity, even if well-founded, since in this case article 121.º of the CPT has no application; in truth, the burden established in that legal provision against the TA (that doubt as to the existence and quantification of the tax fact must be decided against the TA: in dubio contra Fisco) only exists when it is the TA that is asserting the existence of the tax facts and their quantification and not when, as in the present case, it falls to the Taxpayer to demonstrate the existence of the facts on which its right to see certain costs deducted negatively in calculating capital gains and consequently its taxable profit is based. Therefore we have said that the TA need demonstrate only the verification of the "fact-indices" (objective and credible indications) which, combined with one another and appreciated in the light of the rules of experience, allowed it to conclude that the transfer in question did not occur. If it does so, the administrative decision will be materially substantiated in disregarding the expenses in question as an integral part of the acquisition value to be used in calculating capital gains and, consequently, the presumption of veracity of the records, established at the time in article 78.º of the CPT, will be rebutted. It is this same article that states that the presumption it establishes may be rebutted, particularly, by the verification of "other well-founded indications that it does not reflect the taxpayer's actual taxable matter" (That is, although we are dealing with a legal presumption, for it to be rebutted it is not necessary to prove the contrary – as is generally required with respect to presumptions of this type (see article 350.º, n.º 2, of the CC), because article 78.º, at the end, of the CPT establishes, with special character, a different regime for rebutting the presumption.)."
The said decision concludes in the following sense: "In cases in which the correction of the declared taxable matter results from the fact that the TA has considered that certain expenses cannot form part of the acquisition value to be considered in calculating capital gains because they relate to assets that were not transferred (reason why, through the process generally called 'arithmetic corrections', it purged such expenses from the acquisition value), the TA bears the burden of proving that the legal prerequisites that legitimate its action in the sense of correcting the taxable profit are verified (that is, of demonstrating the facts that led it to conclude that those expenses do not relate to the transferred assets), only thereafter falling on the taxpayer the burden of proving the existence of the facts it alleged as the basis for its right to see such amounts deducted negatively in calculating capital gains. The TA need only demonstrate the verification of the 'fact-indices' (objective and credible indications) which, combined with one another and appreciated in light of the rules of experience, allowed it to conclude that the assets to which the expenses in question relate were not transferred and thus that the administrative decision is materially substantiated in disregarding those expenses in calculating capital gains and in rebutting the presumption of veracity of the records (at that time provided for in article 78.º of the CPT). Once that demonstration is made, it falls to the taxpayer to demonstrate that those assets were actually transferred, it not being sufficient for it to create doubt on that point (article 121.º of the CPT does not apply here) because it is not the TA that is invoking the existence of an undeclared tax fact or attributing to a tax fact a dimension different from that declared, in which case it would be decided against it in case of doubt, but rather it is the taxpayer that invokes its right to see deducted negatively in calculating capital gains the expenses it claims relate to transferred assets, reason why doubt on that point is unfavorable to it."
In accordance with what has been set forth previously, and returning to the matter at hand, we are certain that the burden of proving the facts recorded in its declarations falls on the Claimant, that is, it falls to it in particular to prove the value of supplies carried out as regards the invoicing of card B... (in accordance with article 70.º of the VAT Code);
Now that regarding the declarations presented by the Claimant, there is a presumption of veracity and good faith, a basic principle established in article 75.º of the LGT: "Declarations of taxpayers presented in accordance with the provisions of the law are presumed to be true and made in good faith, as are the data and calculations recorded in their accounts or records, when these are organized in accordance with commercial and tax legislation, without prejudice to other requirements on which depends the deductibility of expenses. (As amended by Law n.º 80-C/2013 of 31 December)".
However the rebuttal of the presumption occurs when: "the declarations, accounts or records reveal omissions and when the taxpayer fails to comply with the duties incumbent on it of clarification of its tax situation (article 75.º n.º 2 paragraphs a) and b) of the LGT.
Consequently, in accordance with the provision of n.º 1 of article 74.º of the LGT, the burden of proving the facts constitutive of the rights it invokes fell on the Claimant, in particular, to clarify, prove and document the operations in question, including to demonstrate and justify their relevance and tax consistency, resorting to means of proof by document and if admissible also supplemented with witness evidence, the factual elements that support its correction, since they were promoted by the Claimant.
For its part, there would fall on the Respondent the burden of proving the verification of the legal (binding) prerequisites that legitimate its action.
On the plane of analysis concerning the burden of proof incumbent on the TA, let us return to the present case file, in which the TA, in compliance with service order n° 012015..., resulted in the present assessments now being questioned. The TA did not invoke facts constitutive of rights, it merely limited itself to requesting from the Claimant, documents proving the amounts adjusted in Field 40 - Adjustments in favour of the taxpayer. It requested the following elements:
"Analytical trial balances relating to 2012-12-31, before and after determination of results; Detailed account statement extract from account 2434 - VAT - Adjustments, and/or other account statement extracts where were reflected the accounting movements relating to the adjustment(s) contained in field(s) 40 of the periodic declaration(s); Breakdown of the value contained in field(s) 40 of the periodic declaration(s), taking into account the type of situation provided for in article 78.º of the Value Added Tax Code (CIVA); Photocopy of supporting documents of the ten highest-value movements relating to the values indicated in field(s) 40 of the periodic declaration(s), for the financial year 2012, with the respective supporting documents in accordance with article 78.º of CIVA."
Consequently, it fell to the Claimant, in accordance with article 75.º n.º 1 and n.º 2 paragraphs a) and b) of the LGT, to enjoy the said presumption, the duty of clarification of its tax situation, through the presentation of proof of income and transactions both in the administrative proceeding and in the present case.
And if there were doubts, which is not the case, regarding the type of income reported to the Tax and Customs Authority, under the Savings Directive, then indeed the TA would fall, in accordance with the principle of investigation, provided for in article 58.º of the LGT, the duty to undertake all necessary steps to satisfy the public interest and to discover the material truth, including to ascertain the type of income declared in the respective declaration and the taxpayer would have the duty of cooperation under article 59.º of the LGT.
In fact it is the Claimant that bears the burden of proving the transactions now in question, through the performance of a set of obligations, as provided for in article 29.º and following of CIVA.
Let us see, then, whether the specific requirements relating to the liquid fuel taxation regime applicable to resellers, at the time of the facts in 2012 and 2013, are satisfied so that the Claimant may exercise the right to deduction (article 72.º of CIVA):
We proceed next to transcribe article 72.º of CIVA, in force at the time of the facts (2012, 2013):
"1 - When fuels acquired from resellers give rise to a right to deduction under the general rules, this is based on the tax contained in the selling price.
2 - The right to deduction referred to in the preceding number can only be exercised on the basis of invoices or equivalent documents passed in legal form, however, the elements relating to the identification of the purchaser, with the exception of the tax identification number, may be replaced by the simple indication of the registration number of the fueled vehicle.
3 - Invoices or equivalent documents issued by resellers must contain the indication of the net price, the applicable rate and the amount of tax corresponding or, alternatively, the indication of the price including tax and the applicable rate.
4 - In cases of deliveries carried out by resellers on behalf of distributors, invoices or equivalent documents issued by resellers must contain the mention 'VAT - does not give right to deduction' or similar expression.
Based on what has been set forth, it is more than evident that the exercise of the right to deduction can only be exercised on the basis of invoices or equivalent documents passed in legal form.
In light of everything that has already been set forth, the following results: the Claimant acquired fuel from the Distributor ("C...") (proven by invoices attached to the case file), including in that acquisition the fuel subject to sale on behalf of Distributor C....
And as of February 2012, the Claimant ceased to invoice the end customer for fuel B..., the sale of which came to be paid through a C... card and when the end consumer pays for the fuel the value of that sale goes directly to a C... account.
In this manner, it becomes necessary for the Claimant to possess documents proving the sales carried out on behalf of the Distributor, as well as to possess documents proving the adjustment of the values carried out between the Claimant and the Distributor.
As results from the "General Conditions of 2012," and according to what was alleged by the Claimant, as of February 2012 it began to provide a service to C..., in fuels B..., reason for which, the service provision carried out by the Claimant to Distributor C..., is subject to invoicing.
In sum, in light of what has been set forth previously, it would fall to the Claimant to demonstrate by means of invoices or equivalent documents, namely:
the supplies carried out on behalf of the Distributor ("C...") (in accordance with article 70.º n.º 3 CIVA);
the service provision carried out by it to the Distributor ("C...") in the operations involving card B....
With regard to invoices, it would fall to the Claimant to attach them to the case file, so that in this manner it could demonstrate its commercial relationship with its Distributor ("C..."), more specifically, the attachment of invoices that would allow, with due legal and tax certainty, identification of which supplies would be attributed as supplies on behalf of the Distributor.
However, from the present case file we ascertain that the Claimant did not attach invoices proving the transactions in question, nor did it attach invoices of the provision of services in the context of fuels "B...".
The Claimant attached only invoices for purchases made from the Distributor ("C...");
On another plane of analysis, it now falls to ascertain whether the Claimant attached documents equivalent to invoices that prove the said transactions.
From the documentary evidence produced by the Claimant we ascertain that it attached: General Trial Balance (Analytical), and accounting extracts, summary maps of invoicing, the general conditions entered into with the Distributor and internal adjustment documents.
However the said documents neither demonstrate nor allow for the determination, in accordance with article 70.º n.º 3 CIVA, of the value of supplies carried out on behalf of the Distributor ("C..."), nor of which commissions for the provision of service were carried out on behalf of those supplies.
Accordingly, the Claimant also did not attach documents equivalent to invoices that would demonstrate that the supplies made by means of "B..." on behalf of the Distributor ("C..."), were imputed, reimbursed, credited and debited to its Distributor, nor did it attach documents regarding the commissions for services provided in the context of those supplies.
We are well aware that under n.º 1 of article 74.º of the LGT, documentary evidence can be supplemented by witness evidence, we emphasize, however, that despite the fact that documentary evidence can be supplemented, it nonetheless cannot be replaced. And in truth the witness evidence produced in the case file not only did not supplement the documentary evidence, but could not replace it.
Based on what has been set forth previously, and in accordance with the provision of articles 74.º n.º 1 of the LGT, article 342.º n.º 1 of the CC, articles 29.º and following of CIVA, as well as articles 69.º to 73.º of CIVA, it fell to the Claimant to prove its declarations, adjustments, by means of documentary evidence, namely, invoices or equivalent documents, which it did not do.
In effect and in accordance with the factual matter brought to the case file, subject to the production of documentary and witness evidence, in truth the Claimant failed to demonstrate the supplies referred to in its VAT adjustment declaration.
As a consequence of what has been set forth, this Tribunal denies merit to the claim of the Claimant, deciding on the legality of the tax acts assessing Value Added Tax (VAT), n.º ... – ... – ... – ... – ... – ..., corresponding to the fiscal years 2012 and 2013.
The Arbitral Tribunal, under articles 608.º, n.º 2, 663.º, n.º 2 and 679.º of the Code of Civil Procedure, by subsidiary application under article 29.º of LRAT, is not obliged to consider all the arguments alleged by the Claimant or by the Respondent, when the decision is already determined by the solution already rendered, as is the case in the present case file, reason for which the remaining issues submitted for arbitral decision are left for decision as prejudiced.
J - COMPENSATORY INTEREST
The Claimant further petitions for the payment of compensatory interest, which it is necessary to decide.
Given the decision finding lack of merit of the claim and sustaining the legality of the assessments, it is decided accordingly for the lack of merit of the petition for payment of compensatory interest.
I - DECISION
Therefore, given all that has been set forth, this Arbitral Tribunal decides:
To find the petition for declaration of illegality of the tax acts assessing Value Added Tax (VAT), n.ºs –...–...–...–...–..., corresponding to the fiscal years 2012 and 2013, in the total amount of € 33.738,03 (thirty-three thousand seven hundred and thirty-eight euros and three cents), to lack merit.
To find the petition for payment of compensatory interest to lack merit.
The value of the case is set at € 33.738,03 (thirty-three thousand seven hundred and thirty-eight euros and three cents), corresponding to the value of the assessment, considering the economic value of the case, assessed according to the value of the tax assessment being challenged, and in accordance with this are set the costs at 1.836,00€ (one thousand eight hundred and thirty-six euros), to be borne by the Claimant in accordance with article 12.º, n.º 2 of the Tax Arbitration Regime, article 4.º of RCPAT and Table I attached thereto. – n.º 10 of article 35.º, and n.º 1, 4 and 5 of article 43.º of the LGT, articles 5.º, n.º 1, paragraph a) of RCPT, 97.º-A, n.º 1, paragraph a) of CPPT and 559.º of CPC).
Notify accordingly.
Lisbon, 6 November 2018
The Arbitrator
Rita Guerra Alves
Text prepared by computer, in accordance with article 138.º, number 5 of the Code of Civil Procedure (CPC), applicable by reference of article 29.º, n.º 1, paragraph e) of the Tax Arbitration Regime.
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