Process: 192/2018-T

Date: October 31, 2018

Tax Type: IMT

Source: Original CAAD Decision

Summary

This CAAD arbitration decision (Process 192/2018-T) addresses whether closed-end real estate investment funds (fundos de investimento imobiliário fechados) qualify for IMT exemption on property acquisitions. The Applicant, a closed real estate investment fund represented by its management company, acquired an urban property in Lisbon for €6,725,000 and paid IMT of €437,125 at the 6.5% rate. The fund challenged this assessment, claiming exemption under Decree-Law No. 1/87. The core legal issue centered on whether Article 1 of Decree-Law No. 1/87 (granting sisa/IMT exemption to real estate investment funds) remained in force after Article 46 of the Tax Benefits Statute (EBF) introduced a specific IMT exemption for open-ended real estate investment funds in 2007. The tribunal had to determine if the 2007 amendment tacitly or expressly repealed the broader 1987 exemption, or if closed-end funds retained their exemption under the original legislation. The arbitral tribunal was constituted following standard CAAD procedures: acceptance of the request on April 13, 2018, appointment of three arbitrators by the Deontological Council, constitution of the collective tribunal on June 25, 2018, and the Tax Authority's response filed on September 7, 2018. The decision references previous CAAD cases (544/2016-T, 677/2016-T, 440/2017-T) that addressed similar issues, establishing precedent for interpretation of IMT exemptions applicable to different categories of real estate investment funds under Portuguese tax law.

Full Decision

The Arbitrators José Pedro Carvalho (Presiding Arbitrator), Maria do Rosário Anjos and Paulo Ferreira Alves, appointed by the Deontological Council of the Administrative Arbitration Centre to form an Arbitral Tribunal, hereby agree to the following:

ARBITRAL DECISION

I – REPORT

On 12 April 2018, A... – Closed Real Estate Investment Fund, Tax Number..., with registered office at ..., no...., ..., ...-... Lisbon, represented by B... – Investment Fund Management Company, S.A., Tax Number..., filed a request for constitution of an arbitral tribunal, pursuant to the combined provisions of Articles 2 and 10 of Decree-Law No. 10/2011, of 20 January, which approved the Legal Framework for Arbitration in Tax Matters, as amended by Article 228 of Law No. 66-B/2012, of 31 December (hereinafter, abbreviated as RJAT), seeking the declaration of illegality of the Municipal Tax on Onerous Transfers of Real Estate assessment No..., in the amount of €437,125.00.

To support its request, the Applicant alleges, in summary, the occurrence of a defect involving violation of law that justifies its annulment pursuant to Article 163, paragraph 1 of the Code of Administrative Procedure, applied subsidiarily under Article 2, paragraph c) of the LGT (General Tax Law).

On 13-04-2018, the request for constitution of the arbitral tribunal was accepted and automatically notified to the AT (Tax Authorities).

The Applicant did not proceed to appoint an arbitrator, wherefore, pursuant to paragraph a) of paragraph 2 of Article 6 and paragraph a) of paragraph 1 of Article 11 of the RJAT, the President of the Deontological Council of CAAD appointed the undersigned as arbitrators of the collective arbitral tribunal, who communicated acceptance of the appointment within the applicable time period.

On 05-06-2018, the parties were notified of these appointments and did not express any intention to challenge any of them.

In accordance with the provision of paragraph c) of paragraph 1 of Article 11 of the RJAT, the collective Arbitral Tribunal was constituted on 25-06-2018.

On 07-09-2018, the Respondent, having been duly notified for this purpose, filed its response defending itself solely through challenge.

Pursuant to paragraphs c) and e) of Article 16, and paragraph 2 of Article 29, both of the RJAT, the holding of the meeting referred to in Article 18 of the RJAT was dispensed with, as well as the submission of arguments by the parties.

It was indicated that the final decision would be notified by the deadline referred to in Article 21/1 of the RJAT.

The Arbitral Tribunal is materially competent and is regularly constituted, pursuant to Articles 2, paragraph 1, paragraph a), 5 and 6, paragraph 1, of the RJAT.

The parties have legal personality and capacity, are legitimate and are legally represented, pursuant to Articles 4 and 10 of the RJAT and Article 1 of Ordinance No. 112-A/2011, of 22 March.

The proceedings are not affected by any nullities.

Accordingly, there is no obstacle to the examination of the case.

Having considered everything, it falls to us to render:

II. DECISION

A. STATEMENT OF FACTS

A.1. Facts Established as Proven

The Applicant is, and was at the date of the facts, a closed real estate investment fund, constituted in accordance with the provisions of the Legal Framework for Real Estate Investment Funds.

The Applicant is managed, administered and represented by the company B... – Investment Fund Management Company, S.A.

On 22-02-2016, the Applicant entered into a purchase and sale agreement with C..., S.A., through which it acquired an urban property, consisting of a ground floor and six storeys, located at Street..., no. ... to ..., parish of ..., municipality of Lisbon, described in the Land Registry Office of Lisbon under no.... and registered in the respective land registry matrix under article..., for the amount of €6,725,000.00.

The property was acquired by the Applicant, represented in the act by B... – Investment Fund Management Company, S.A., to become part of its assets.

On 19-02-2016, at the request of the Applicant, the Municipal Tax on Onerous Transfers of Real Estate assessment No..., in the amount of €437,125.00, was calculated, which resulted from the application of the rate of 6.50% to the purchase and sale price.

The Applicant made the payment of said assessment.

The IMT assessment paid by the Applicant accompanied the purchase and sale agreement.

On 13-11-2017, the Applicant filed a request for official review concerning said IMT assessment act.

Up to the date of filing the arbitral petition, the Applicant had not been notified of any decision rendered in that procedure.

A.2. Facts Established as Not Proven

With relevance to the decision, there are no facts that should be considered as not proven.

A.3. Grounds for the Statement of Facts Proven and Not Proven

Regarding the statement of facts, the Tribunal does not need to rule on everything alleged by the parties; rather, it is its duty to select the facts that matter for the decision and to distinguish proven facts from those not proven (see Article 123, paragraph 2, of the CPPT and Article 607, paragraph 3 of the CPC, applicable pursuant to Article 29, paragraph 1, paragraphs a) and e) of the RJAT).

Accordingly, the facts pertinent to the adjudication of the case are selected and determined based on their legal relevance, which is established in light of the various plausible solutions to the legal question(s) (see former Article 511, paragraph 1, of the CPC, corresponding to the current Article 596, applicable pursuant to Article 29, paragraph 1, paragraph e) of the RJAT).

Thus, taking into account the positions adopted by the parties, in light of Article 110/7 of the CPPT, the documentary evidence and the administrative procedure file attached to the record, the facts listed above were considered proven, with relevance to the decision, taking into account that, as written in the Decision of the Administrative Court of the South Region of 26-06-2014, rendered in case 07148/13, "the probative value of the tax inspection report (...) may have probative force if the assertions contained therein are not challenged".

No facts were established as proven or not proven regarding allegations made by the parties and presented as facts, consisting of strictly conclusive statements, incapable of proof, and whose truthfulness must be assessed in relation to the concrete statement of facts consolidated above.

B. REGARDING THE LAW

As the Respondent itself points out, the essential issue raised in these proceedings is to determine "whether Article 1 of Decree-Law No. 1/97, of 3 January, remains in force or not, which will determine whether Real Estate Investment Funds, regardless of their type, will or will not be exempt from IMT in the acquisition of real estate".

On the other hand, it is important to decide whether the IMT exemption introduced in Article 46 of the EBF (Tax Benefits Statute) by the State Budget Law for 2007 repealed – and, if so, expressly or tacitly – the sisa exemption (IMT) contained in Article 1 of Decree-Law No. 1/87.

Previous CAAD decisions have already ruled on this issue in cases No. 544/2016-T, No. 677/2016-T and No. 440/2017-T.

It is important first to list the legal norms relevant at the date of occurrence of the facts.

According to Article 5, paragraph 1 of the IMT Code, the incidence of IMT is governed by the legislation in force at the time the tax obligation arises, with paragraph 2 establishing that this arises at the moment the transfer occurs.

Now, as established in the proven facts, the Applicant is an open real estate investment fund, constituted and operating in accordance with the provisions of the Legal Framework for Real Estate Investment Funds, approved by Decree-Law No. 60/2002, of 20 March.

The Applicant acquired, by public deed, on 22-02-2016, a real property, located at Street..., no. ... to ..., parish of ..., municipality of Lisbon.

For the sake of relevance, we shall begin by setting out the legal framework applicable to investment funds, created by Decree-Law No. 246/85, of 12-07.

Subsequently, Decree-Law No. 1/87 of 03-01 created fiscal incentives for the constitution of real estate investment funds.

And in the preamble to this Decree-Law No. 1/87, the important contribution that this new type of financial institution could make to savings formation and its mobilization for investments in the real estate sector is expressly recognized, in addition to the positive effects that would thereby be induced in construction industries and in the market for the rental of real properties for housing and offices.

Article 1 of said Decree-Law No. 1/87 of 03-01 determined that "acquisitions of real estate for a real estate investment fund by its respective management company are exempt from Sisa".

Thus, according to this legal norm, acquisitions of real estate carried out with the objective of becoming part of a real estate investment fund would be exempt from Sisa.

Later, Decree-Law No. 287/2003, of 12 November, reformed the taxation of assets, approving the CIMI and CIMT, published respectively in its Annexes I and II.

Regarding references, Article 28 of Decree-Law No. 287/2003, of 12-11, determined that:

"1 - All legal texts that mention the Code of Municipal Contribution or municipal contribution shall be considered to refer to the Code of Municipal Tax on Real Estate (CIMI) or to the municipal tax on real estate (IMI).

2 - All legal texts that mention the Code of Municipal Sisa Tax and the Code of Tax on Successions and Donations, municipal sisa tax or tax on successions and donations shall be considered to refer to the Code of Municipal Tax on Onerous Transfers of Real Estate (CIMT), the Code of Stamp Tax, the municipal tax on onerous transfers of real estate (IMT) and the stamp tax, respectively."

Said Decree-Law No. 287/2003 also included a repeal provision in its Article 31, paragraph 6 of which provided:

"Tax benefits relating to municipal contribution, now referred to as IMI, as well as those relating to the municipal sisa tax established in legislation separate from the Code approved by Decree-Law No. 41969, of 24 November 1958, and in the Tax Benefits Statute, which now refer to IMT, remain in force."

Indeed, in accordance with Articles 28 and 31, paragraph 6 of Decree-Law No. 287/2003, and as stated in the CAAD decision in case No. 544/2016-T, "sisa tax exemptions should be considered as referring to IMT, whereby acquisitions of real estate carried out by a management company of a real estate investment fund with the intention that they become part of that fund would continue to be exempt from IMT (that sisa exemption provided for in Article 1 of Decree-Law No. 1/87, of 3 January). The exemption would exist whenever the fund was in the position of acquirer of the real property."

It should be noted, as stated in the CAAD decision in case No. 544/2016-T, "that this exemption had a clear purpose entirely embraced by the tax legislator. At issue was the objective, of a social and economic nature, of defining a fiscal framework capable of encouraging the creation of investment funds with capacity to mobilize savings for the purposes of making investments in the real estate sector, thereby stimulating construction industries and the market for the rental of real properties for housing and offices."

The State Budget Law for 2007, in its Article 82, amended the text of Article 46 of the EBF, which thereafter provided, in addition to the exemption from Municipal Contribution (IMI) for real properties integrated in open real estate funds, an IMT exemption for said real properties. Thus, real properties integrated in mixed or closed funds, provided certain conditions were met, would be entitled to a 50% reduction in the IMT rate.

This Article 82 made no reference to the sisa exemption (IMT) that was enshrined in Article 1 of Decree-Law No. 1/87 of 03-01.

As the CAAD decision in case No. 544/2016-T states, the issue that arises concerns the question of whether the IMT exemption introduced in Article 46 of the EBF by the 2007 State Budget Law repealed – and, if so, expressly or tacitly – the Sisa exemption (IMT) contained in Article 1 of Decree-Law No. 1/87 of 03-01 – which, until then, no one doubted remained in force. This issue is pertinent insofar as, pursuant to Article 7, paragraph 1 of the Civil Code, the general rule regarding the cessation of the force of law is that "when not intended to have temporary effect, a law ceases to have force only if it is repealed by another law."

Decree-Law No. 1/87 contains no indication that Article 1 would have temporary effect, wherefore, should one admit that it was not repealed by another law, the exemption therein shall – even today – remain in force, as concluded in the CAAD decision in case No. 544/2016-T.

Accordingly, the response to this question will answer the question of whether the IMT assessment acts at issue in these proceedings are or are not illegal.

Article 7, paragraph 2 of the Civil Code provides that "repeal may result from express declaration, from incompatibility between the new provisions and the preceding rules or from the circumstance that the new law regulates all the subject-matter of the former law."

As explained in the CAAD decision in case No. 544/2016-T, "the existence of recognition rules, oriented towards the clear and precise identification of the norms that are in force in the legal order and those that have already been expressly or tacitly repealed, is of the greatest importance, not least from the standpoint of the principle of legality, in particular in its dimension of tax legality, affirming the requirement of legal certainty and protection of confidence inherent in the constitutionally structuring principle of the rule of law. Citizens, economic agents and legal operators must be able to know with certainty which norms are and which are not in force in the legal order. Article 7 of the Civil Code thus establishes three alternative criteria for repeal, whose satisfaction or non-satisfaction has significant implications in the specific case."

Let us examine whether any of the three alternatives which, according to Article 7, paragraph 2 of the Civil Code, would lead to the repeal of Article 1 of Decree-Law No. 1/87 of 03-01 occurred.

The three alternatives of Article 7, paragraph 2 of the Civil Code are:

express declaration of repeal;

incompatibility between the new provisions and the preceding rules; or

the circumstance that the new law regulates all the subject-matter of the former law.

As regards the first alternative, there is no express repeal provision in Article 46 of the EBF, in the form given to it by Article 82 of the State Budget Law for 2007, of said Article 1 of Decree-Law No. 1/87.

As regards the second alternative, the IMT exemption contained in the new text of Article 46 would apply whenever the fund was the acquirer of the real property, whereas the IMT exemption contained in Article 1 of Decree-Law No. 1/87 would apply when the fund was in the position of transferor of the real property. Indeed, there is no incompatibility between the new provisions (new Article 46 of the EBF) and the preceding rules (Article 1 of Decree-Law No. 1/87). It should be noted that the new provisions and the preceding rules are not only compatible but create a fiscal regime specially attractive for management companies of real estate investment funds.

It should also be noted that the reduction to half the IMT rates, contained in the current Article 49 of the EBF, constitutes a supplement that is not insignificant and not redundant with respect to the exemption established by Article 1 of Decree-Law No. 1/87. It is an exemption that is structurally and teleologically distinct from the latter, whose introduction and maintenance in the legal order is based on a distinct fiscal policy valuation.

As stated in the CAAD decision in case No. 544/2016-T, "the possibility of juridical-normative coexistence of IMT exemptions at the moments of acquisition and disposition of a real property is far from being an anomalous or systemically dysfunctional solution. Such coexistence can be found today in the EBF itself, regarding urban real properties intended for rehabilitation, provided certain conditions are met. Indeed, Article 45, paragraph 2 provides that 'Acquisitions of urban real properties intended for urban rehabilitation are exempt from municipal tax on onerous transfers of real estate, provided that, within three years from the date of acquisition, the acquirer initiates the respective works.' Concurrently, Article 71, paragraph 8 of the EBF provides that 'Acquisitions of urban real property or of an autonomous fraction of an urban real property intended exclusively for own permanent residence in the first onerous transfer of rehabilitated real property, when located in an 'urban rehabilitation area', are exempt from IMT'. Here too an IMT exemption at the moment of acquisition of the real property to be rehabilitated coexists with the exemption at the moment of disposition of the rehabilitated real property, within a framework of juridical complementarity consistent with the economic and social rationality of the established regimes.

A structurally identical solution can also be found in Article 8, paragraph 7 of the special regime applicable to real estate investment funds for residential rental (FIIAH) and real estate investment companies for residential rental (SIIAH), approved by Article 102 of Law No. 64-A/2008, of 31 December - Chapter X, where it is provided that the following are exempt from IMT: "a) Acquisitions of urban real properties or autonomous fractions of urban real properties intended exclusively for rental for permanent residence by the investment funds referred to in paragraph 1; b) Acquisitions of urban real properties or autonomous fractions of urban real properties intended for own permanent residence, as a result of the exercise of the purchase option referred to in paragraph 3 of Article 5 by tenants of the real properties that form part of the assets of the investment funds referred to in paragraph 1."

Regarding the third alternative of Article 7, paragraph 2 of the Civil Code, the introduction of the exemption in Article 46 of the EBF cannot be interpreted as a repeal and replacement of the exemption contained in Article 1 of Decree-Law No. 1/87, not least because tax benefits are not found only in the EBF but may be provided for in separate legislation.

Thus, we must conclude that the two exemptions are different, compatible and complement one another.

Having established this, let us now examine the various amendments made, over time, to said Article 46 of the EBF:

the provision in Article 88 of Law No. 53-A/2006, of 31 December (State Budget Law for 2007), of a transitional regime for mixed or closed funds in certain circumstances;

the renumbering of Article 46 of the EBF, which became Article 49, effected by Article 109 of Law No. 2-B/2010, of 28 April (State Budget Law for 2010), which reserves the IMT exemption to open real estate investment funds;

the extension of the IMT exemption to closed public subscription funds effected by Article 119 of Law No. 55-A/2010, of 31 December (State Budget Law for 2011);

the replacement of the IMT exemption for real properties integrated in open or closed public subscription real estate investment funds with a reduction to half the IMT rates, effected by Article 206 of Law No. 83-C/2013, of 31 December (State Budget Law for 2014), accompanied by a transitional regime in Article 209.

Said amendments concerned the IMT exemption relating to real properties integrated in real estate investment funds. Nothing follows from them that could lead to the conclusion that they concerned the exemption contained in Article 1 of Decree-Law No. 1/87.

In this context, it must necessarily be concluded, as concluded in the CAAD decision in case No. 544/2016-T, that the Sisa exemption provided for in Article 1 of Decree-Law No. 1/87, of 3 January, which came to refer to IMT pursuant to Articles 28 and 31 of Decree-Law No. 287/2003, of 12-11, remains in force. Accordingly, acquisitions of real estate carried out for a real estate investment fund by its respective management company are exempt from IMT.

Now, the Applicant acquired a real property which it assigned to the fund itself. Accordingly, the IMT exemption provided for in Article 1 of Decree-Law No. 1/87 of 03-01 is applicable to the acquisition in question, and there should be no IMT payment required as a result of said acquisition.

Thus, and in conclusion, the Applicant is correct, and the declaration of illegality of the assessments challenged is warranted, wherefore the arbitral petition is granted with the consequent annulment of said IMT assessments and other consequential effects.

*

Regarding the request for indemnifying interest submitted by the Applicant, Article 43, paragraph 1 of the LGT establishes that indemnifying interest is due when it is determined that there was an error attributable to the services, resulting in payment of the tax debt in an amount greater than that legally due.

The Applicant is thus entitled to be reimbursed for the amount it paid (pursuant to Articles 100 of the LGT and 24, paragraph 1 of the RJAT) as a result of the annulled acts, and furthermore to be indemnified for the undue payment through the payment of indemnifying interest by the AT from the formation of the implied denial of the gracious complaint filed by the Applicant until reimbursement, at the supplementary legal rate, pursuant to Articles 43, paragraphs 1 and 4, and 35, paragraph 10 of the LGT, Article 559 of the Civil Code and Ordinance No. 291/2003, of 8 April.

Indeed, Article 43/1 of the LGT provides that:

"Indemnifying interest is due when it is determined, in a gracious complaint or judicial challenge, that there was an error attributable to the services, resulting in payment of the tax debt in an amount greater than that legally due."

In this case, it is proven that the assessment was issued at the request of the Applicant, wherefore only after the expiration of the period the Respondent had to rule on the matter, having not done so, can the error from which said assessment suffers be considered attributable to it.

*

C. DECISION

Accordingly, this Arbitral Tribunal hereby decides to render the arbitral petition filed as wholly meritorious and, in consequence,

To annul the IMT assessment act No..., of 19-02-2016, in the amount of €437,125.00;

To condemn the AT to return the amount of tax wrongfully paid, and to pay indemnifying interest as indicated above;

To condemn the Respondent for the costs of the proceeding, as fixed below.

D. Value of the Proceeding

The value of the proceeding is fixed at €437,125.00, pursuant to Article 97-A, paragraph 1, a), of the Code of Tax Procedure and Process, applicable by force of paragraphs a) and b) of paragraph 1 of Article 29 of the RJAT and paragraph 2 of Article 3 of the Regulation of Costs in Tax Arbitration Proceedings.

E. Costs

The arbitration fee is fixed at €7,038.00, pursuant to Table I of the Regulation of Costs in Tax Arbitration Proceedings, to be paid by the Respondent, since the petition was wholly meritorious, pursuant to Articles 12, paragraph 2, and 22, paragraph 4, both of the RJAT, and Article 4, paragraph 4 of said Regulation.

Let notification be made.

Lisbon, 31 October 2018

The Presiding Arbitrator

(José Pedro Carvalho)

The Arbitrator Member

(Maria do Rosário Anjos)

The Arbitrator Member

(Paulo Ferreira Alves)

Frequently Asked Questions

Automatically Created

Are real estate investment funds (fundos de investimento imobiliário) exempt from IMT tax on property acquisitions in Portugal?
Real estate investment funds may be exempt from IMT on property acquisitions in Portugal depending on their structure and applicable legislation. Closed-end real estate investment funds (fundos fechados) historically claimed exemption under Decree-Law No. 1/87, Article 1, which granted broad sisa (predecessor to IMT) exemption. However, the 2007 State Budget Law introduced Article 46 of the Tax Benefits Statute (EBF), establishing specific IMT exemption conditions for open-ended funds (fundos abertos). The central question in several CAAD decisions concerns whether the 1987 exemption for closed-end funds remains valid or was repealed by the 2007 legislation. Funds must carefully analyze their legal structure and the temporal application of these provisions to determine exemption eligibility.
What legal basis supports the IMT exemption for closed-end real estate investment funds under Portuguese tax law?
The legal basis for IMT exemption for closed-end real estate investment funds traditionally stems from Article 1 of Decree-Law No. 1/87, of January 3, which granted sisa exemption (later converted to IMT exemption) to real estate investment funds generally. This provision did not distinguish between fund types. In 2007, Article 46 of the Tax Benefits Statute (EBF) was introduced via the State Budget Law, establishing specific exemption conditions primarily targeting open-ended funds. To challenge an IMT liquidation through CAAD arbitration, a fund must file a request for constitution of an arbitral tribunal under Decree-Law No. 10/2011 (RJAT - Legal Framework for Arbitration in Tax Matters). The fund should identify the violation of law (typically claiming wrongful denial of exemption under Article 163 of the Administrative Procedure Code) and request annulment of the IMT assessment with supporting legal arguments and documentation.
How can a real estate investment fund challenge an IMT liquidation through CAAD tax arbitration?
A real estate investment fund can challenge an IMT liquidation through CAAD tax arbitration by filing a request for constitution of an arbitral tribunal pursuant to Articles 2 and 10 of the RJAT (Decree-Law No. 10/2011). The fund, represented by its management company, must submit the request identifying the contested IMT assessment, the amount involved, and the legal grounds for challenge (typically violation of exemption provisions). The request triggers automatic notification to the Tax Authority (AT). If the applicant does not appoint an arbitrator, the CAAD Deontological Council appoints a collective tribunal of three arbitrators under Article 6(2)(a) and Article 11(1)(a) of RJAT. Parties may challenge arbitrator appointments within the notification period. The tribunal is formally constituted after appointments are finalized, typically within 2-3 months of filing. The Tax Authority files its response, and the tribunal may dispense with hearings under Article 16(c) and Article 29(2) of RJAT, proceeding directly to decision within statutory deadlines.
What are the requirements for filing a tax arbitration request to contest an IMT assessment in Portugal?
Requirements for filing a tax arbitration request to contest an IMT assessment in Portugal include: (1) Legal standing - the taxpayer subject to the assessment (here, the real estate investment fund represented by its management company); (2) Identification of the specific IMT liquidation being challenged, including assessment number and amount (€437,125 in this case); (3) Legal grounds demonstrating illegality, typically citing violation of substantive law (exemption provisions) or procedural defects under Article 163 of the Administrative Procedure Code; (4) Prior exhaustion of administrative remedies or demonstration that administrative review has not been decided within statutory timeframes (the Applicant filed official review on November 13, 2017, but received no decision by the arbitration filing date); (5) Compliance with filing deadlines under RJAT; (6) Payment of arbitration fees and costs; (7) Proper legal representation with powers of attorney; and (8) Supporting documentation including the contested assessment, payment proof, property acquisition documentation, and relevant corporate/fund structure documents establishing legal status and exemption eligibility.
What is the procedure and timeline for constituting a collective arbitral tribunal at CAAD for IMT disputes?
The procedure and timeline for constituting a collective arbitral tribunal at CAAD for IMT disputes follows these stages: (1) Filing of arbitration request (April 12, 2018 in this case); (2) CAAD acceptance and automatic notification to Tax Authority (April 13, 2018 - 1 day); (3) If parties do not appoint arbitrators, the CAAD Deontological Council appoints three arbitrators under Article 6(2)(a) and Article 11(1)(a) of RJAT; (4) Appointed arbitrators communicate acceptance within applicable timeframes; (5) Parties are notified of appointments and have opportunity to challenge arbitrators (June 5, 2018 - approximately 7-8 weeks from filing); (6) Formal constitution of collective arbitral tribunal occurs after challenge period expires (June 25, 2018 - approximately 10-11 weeks from initial filing); (7) Tax Authority files response after notification (September 7, 2018 - additional 10-11 weeks); (8) Tribunal may dispense with hearings and proceed to decision under Article 21(1) of RJAT. Total timeline from filing to tribunal constitution: approximately 2.5-3 months; to final decision: typically 6-12 months depending on case complexity and whether oral hearings are required.