VAT Exemption for Intra-Community Supply of Wind Turbines: Proof Requirements in CAAD Arbitration 20/2017-T

ARBITRAL DECISION

REPORT

A... SL (hereinafter also designated as the Claimant), a Spanish legal entity, with tax identification number..., with registered office in..., ..., Spain, and with VAT registration in Portugal number..., which is within the territorial jurisdiction of the Tax Office of Lisbon..., came, by request of 4 January 2017, pursuant to the provisions of Articles 2, No. 1, paragraph a), 5, No. 3, paragraph b), 6, No. 2, paragraph b), 10, No. 1, paragraph a) and No. 2, all of Decree-Law No. 10/2011, of 20 January, TO REQUEST THE CONSTITUTION OF A COLLECTIVE ARBITRAL TRIBUNAL, with a view to declaring the illegality and consequent annulment of the following acts:

• decision dismissing the hierarchical appeal No. ...2015... (..../15), filed against the decision dismissing the gracious complaint No. ...2014..., filed against additional Value Added Tax (VAT) assessments No...., relating to period 09/09, and No...., relating to period 09/12, and respective compensatory interest assessments, all dated 14.12.2013;

• decision dismissing the hierarchical appeal No. ...2016... (..../16), filed against the decision dismissing the gracious complaint No. ...2015..., filed against additional VAT assessments No...., relating to period 10/03, No...., relating to period 10/06, No...., relating to period 10/09, No...., relating to period 10/12, and respective compensatory interest assessments, all dated 15.11.2014.

The Claimant appointed Dr. José Luís Ferreira as arbitrator.

By Request of 10 March 2017, the Tax Authority appointed Professor Doctor António Carlos Santos as arbitrator.

On 17 March 2017, Magistrate Macaísta Malheiros was appointed by the arbitrators designated by the parties to chair the Arbitral Tribunal, the Tribunal being constituted, pursuant to No. 7 of Article 11 of the RJAT, by order of 3 April 2017 of the President of CAAD.

The Respondent filed its response on 15 May 2017.

The administrative file was added to the record on 30 of that same month.

On 30 and 31 May the Claimant added 12 documents to the record.

The meeting referred to in Article 18 of the RJAT, initially scheduled for 30 May 2017, was rescheduled for 21 June, the date on which it actually took place, with witnesses being heard on that date and on 30 of that same month.

The Claimant filed arguments on 11 July 2017.

The Respondent filed arguments on 30 June 2017.

By order of the President of the Tribunal of 22 September 2017, the deadline for delivering the decision was extended for two months, counting from 3 October. And by order of 24 November it was extended for a further two months.

BRIEF SUMMARY OF THE RECORD

The present request for arbitral determination was filed after the decisions dismissing the hierarchical appeal procedures No. ...2015... (filed following notification of the decision dismissing the gracious complaint No. ...2014...) and No. ...2016... (filed following notification of the decision dismissing the gracious complaint No. ...2015...);

The said administrative procedures were initiated following notification of additional Value Added Tax (VAT) assessments, better identified above in I No. 1, originating from inspection procedures with service orders No. OI2011... (external inspection action for the fiscal year 2009) and OI2011... (external inspection action for the fiscal year 2010);

In the inspection procedures, the tax inspection services of the Finance Directorate of Lisbon detected "(…) insufficiencies in documentary evidence of exemption in the operations, since, regarding exports, they were not accompanied by the corresponding customs documents, and, regarding intra-community transfers, they were not accompanied by transport documents, with only declarations from EU customer entities corresponding to other companies in group B..., confirming the completion of intra-community acquisitions."

POSITION OF THE PARTIES

From the Claimant

A.1. In the request the Claimant maintains that:

• The tax acts referring to the year 2009 were based on the fact that the Tax Authority did not consider documents presented by the Claimant, due to difficulty in matching between transport documents and invoices and temporal discrepancy in relation to them, on the one hand; and, in the specific case of the invoice mentioned as referring to the project "H...", based on the alleged illegibility of the CMR documents;

• Regarding the acts referring to the year 2010, the Tax Authority based the corrections made on the inadequacy of the evidence elements presented by the Claimant. The Tax Authority understood that the declarations from EU customers confirming the completion of intra-community acquisitions and receipt of goods did not serve as means of proof;

• Furthermore, additional documentation presented was likewise disregarded, due to lack of unequivocal proof of discharge of goods in the territory of the other Member State;

• Following notification of the two additional VAT assessments and corresponding interest, the Claimant presented two bank guarantees to stay execution, but subsequently the Claimant proceeded to pay the assessments now under review;

• Being convinced of the illegality of the additional VAT assessments and corresponding compensatory interest assessments, the Claimant filed the appropriate gracious complaints and, following their dismissals, the appropriate hierarchical appeals;

• The Claimant argues that there is no non-compliance whatsoever regarding the proof of intra-community supplies because it presented as means of proof suitable documents: declarations signed and stamped by the respective customers confirming intra-community acquisitions with reference to the invoices in question;

• The said documents were not considered by the Tax Authority because it did not admit the declaration issued as means of proof of the actual departure of goods from national territory for the following reasons: (i) the acquiring customers are entities of the same multinational group to which the Claimant belongs, (ii) the transport is not carried out directly by the customer, but by a third party (transport company), (iii) the declarations are allegedly late;

• But for the Claimant none of those reasons hold, because none of these reasons serves to compromise the validity of a means of proof which is, furthermore, listed in the doctrine of the tax administration as an admissible means of proof for the intended purpose;

• Indeed, it is admitted in the doctrine of the tax administration that the said declaration is a suitable means of proof (among the general means of proof) to prove the departure of goods from national territory for the purposes of the exemption applicable to intra-community transfers of goods (cf. Circular Notice No. 30009, of 10.12.1999, VAT Services Directorate, regarding "proof of intra-community transfers of goods");

• Under the Circular Notice, it is determined that "(...) it should be admitted that proof of the departure of goods from national territory may be effected using the general means of proof, namely (...) the declaration, in the Member State of destination of the goods, by the respective acquirer, of having there effected the corresponding intra-community acquisition (…)";

• However, the Tax Authority presents no objective justification for excluding, in the case at hand, the admissibility of that proof, and it is certain that the circumstance that the acquiring entity belongs to the same multinational group to which the supplying entity belongs does not itself constitute any indication of fraud or lack of credibility of the proof;

• The Claimant argues for the illegality of the tax acts under review, because the Tax Authority is bound by the generic guidelines contained in circulars, regulations or instruments of identical nature, regardless of their form of communication, aimed at standardising the interpretation and application of tax rules, pursuant to Article 68-A, No. 1, of the General Tax Law;

• In defence of this position, the Claimant cites Lopes de Sousa "(…) The performance of an act in violation of the binding nature determined by a generic guideline will mean that it is defective for violation of law, capable of leading to its annulment (Articles 135, 136, No. 2, of the CPA) (…)" (cf. Annotated and Commented Tax Procedure and Process Code, vol. I, 2006, p. 439) and refers that in this direction, implicitly, the Supreme Administrative Court Decision, of 28.01.2009, delivered in appeal No. 0699/08;

• Additionally, the supplementary proof presented to prove the intra-community supplies is entirely suitable;

• To better understand the legal error committed by the tax administration services, it is important to have in mind the legal framework of the said exemption for intra-community supplies;

• In accordance with paragraph a) of Article 14 of the RITI, transfers of goods, effected by a taxable person of those referred to in paragraph a) of No. 1 of Article 2 of the same diploma, benefit from the exemption provided therein provided that the following conditions are verified: (i) The goods are dispatched or transported by the seller, by the acquirer or on their behalf, from national territory to another Member State of the European Union; and (ii) the acquirer is registered for value added tax purposes in another Member State, has indicated the respective tax identification number and is there covered by a taxation system for intra-community acquisitions of goods;

• It is settled case law of the CJEU that the corresponding exemption [of Article 138 - "exemptions for supplies of goods"] provided for in Directive 2006/112/EC, of 28 November (hereinafter also the VAT Directive) on the common VAT system, is only applicable when the right to dispose of the good as owner has been transferred to the acquirer and the supplier proves that this good was dispatched or transported to another Member State and that, following such dispatch or transport, it physically left the territory of the Member State of supply (see judgments Teleos, C-409/04, No. 42, of 27 September 2007; Twoh International, C-184/05, Coll., p.I-7897, No. 23, of 7 December 2010; R., C-285/09 Coll., p. I-12605, No. 41, of 16 December 2010; Euro Tyre Holding, C-430/09, Coll., p. I-13335, No. 29);

• It is the objective element of physical displacement of goods from one Member State to another that distinguishes an intra-community operation from an internal supply, under the transitional taxation regime for trade in the Union, whose objective is the transfer of tax revenue to the Member State where final consumption of the delivered goods occurs, with the identification of taxable persons through their individual numbers aimed at facilitating the determination of the Member State in which such final consumption occurred;

• It also follows from CJEU case law that, in the absence of a specific provision in the VAT Directive as to the proofs that taxable persons must provide in order to benefit from VAT exemption, it is for Member States to set the conditions under which they exempt intra-community supplies;

• The necessity to prove the conditions for exemptions is generically referred to in No. 2 of Article 14 of the General Tax Law. Given the lack of fixing in VAT legislation of the means considered suitable to prove the verification of the conditions for exemption, it should be admitted that proof of the departure of goods from national territory may be effected using the general means of proof;

• The Claimant argues that this admissibility of general means of proof is further justified in situations such as the present one, in which the contracts for the purchase and sale of wind turbine towers and wind turbine tower foundations were concluded in conformity with one of the clauses of international commerce established by the International Chamber of Commerce (clauses designated as "Incoterms 2000"), namely, "ex works" ("exworks" or EXW), which means that the Claimant was only obliged to make the goods available to the acquirer in a warehouse located on Portuguese territory, with the EU customer responsible for the subsequent transport to the other Member State. All invoices in question in the present proceedings are complete as to delivery conditions, being described through the appropriate EXW Incoterm;

• Now, in the case where the acquirer obtains the right to dispose of the good as owner in the Member State of supply and undertakes to transport it to the Member State of destination, as occurs in supplies having as condition the collection of goods from the supplier's warehouse, community case law requires that "(…) account must be taken, as far as possible, of the buyer's intentions at the time of acquisition, provided that these are based on objective elements (…)" (case C-84/09 – X, judgment of 18 November 2010 of the CJEU);

• Still according to CJEU case law, after the supplier has fulfilled its obligations regarding the proof of an intra-community supply, not having the contractual obligation to dispatch or transport the goods outside the Member State of supply, which was fulfilled by the acquirer, it is the latter who must be considered the debtor of VAT in this Member State. Also taking into account CJEU case law, when the good object of supply is not dispatched or transported to another Member State by the supplier, but by the acquirer or by a third party on their behalf, in circumstances where the right to dispose of the good as owner is transferred to the acquirer in the Member State of supply and it is up to this one to dispatch or transport the good outside that Member State, the supplier must ensure that the elements it holds, received from the acquirer, are sufficient to prove that it took reasonable measures within its reach to avoid its participation in any fraud possibly committed by the acquirer of the goods;

• Effectively, the Claimant held such elements, since, as provided in the said Circular Notice, the declaration issued by the acquirer is intended to prove the departure of goods from national territory;

• With great relevance to the situation sub judice, one should pay particular attention to, in particular, the Judgments Teleos (C-409/04), Euro Tyre (C-430/09) and Mecsek-Gabona (C-273/11), all from the CJEU. Above all the last judgment proves to be quite enlightening on the conditions for exemption of an intra-community operation characterized by the obligation of the buyer to ensure the transport of the good and on the obligation of the seller to prove that the good physically left the territory of the Member State of supply;

• In fact, the Court of Justice has expressly ruled that the requirement imposed on a seller, in these commercial and contractual circumstances, to carry out absolute proof of the departure of the transmitted goods from national territory would be contrary to the principles of proportionality, legal certainty and neutrality. The CJEU states that "it is for Member States to set the conditions of application of the exemption for an intra-community supply. It also follows from the case law of the Court of Justice concerning the recovery a posteriori of VAT that the measures which Member States have the option of taking to ensure the correct collection of the tax and prevent fraud cannot be used in such a way as to jeopardise the neutrality of VAT (…)" (cf. Judgment Teleos, case C409/04);

• Case law pronounces that "(…) it is contrary to the principle of legal certainty that a Member State, which provided for the conditions for the application of the exemption for an intra-community supply, setting in particular a list of documents to be presented to the competent authorities, and which initially accepted the documents presented by the supplier as justifying evidence of the right to exemption, may subsequently require the supplier to pay the VAT relating to such supply, when it is demonstrated that, due to fraud committed by the acquirer of which the supplier neither knew nor could have known, the goods in question did not in fact leave the territory of the Member State of supply (…)". (cf. Judgment Teleos, case C-409/04);

• Beyond the pronouncement on the non-conformity with the principle of legal certainty, non-conformity with the principles of proportionality and neutrality was enunciated in the following terms: "(…) 51 Now, requiring the taxable person to present conclusive proof that the goods physically left the Member State of supply does not guarantee the correct and simple application of exemptions. On the contrary, this obligation places him in a situation of uncertainty (…) a system that places all responsibility for VAT payment on the supplier, regardless of whether or not he is involved in fraud, rather than preventing tax fraud does not necessarily preserve the harmonised VAT system from fraud and abuses by the acquirer. (…)" (cf. Judgment Teleos, case C-409/04). Thus, in circumstances such as those of the case sub judice, it is only required that the supplier take all the measures that can be reasonably required of him to ensure that the operation he carries out does not imply his participation in fraud, which the Claimant fulfilled;

• The CJEU concluded in the Judgment Teleos that "(…) Article 28.°C, Section A, paragraph a), first paragraph, of the Sixth Directive must be interpreted as precluding the competent authorities of the Member State of supply from requiring a supplier who acted in good faith and submitted proof justifying, prima facie, his right to exemption for an intra-community supply of goods, to subsequently pay the VAT on those goods, when it is demonstrated that that proof is false, without, however, the participation of the said supplier in the tax fraud being proved, provided that he has taken all reasonable measures within his reach to ensure that the intra-community supply he carries out does not imply his participation in that fraud. (…)" (cf. Judgment Teleos, case C-409/04);

• In the case Euro Tyre (C-430/09), this position of the CJEU was confirmed unequivocally, by stating that "(…) even if, in principle, it is incumbent on the supplier to demonstrate that the good was dispatched or transported to another Member State, in circumstances where the right to dispose of the good as owner is transferred to the acquirer in the territory of the Member State of supply and where it falls to this acquirer to dispatch or transport the good outside the Member State of supply, the proof that the supplier can present to the tax authorities depends essentially on the elements it receives from the acquirer for that purpose. (…) it is legitimate to require that the supplier acts in good faith and takes all reasonable measures within his reach to ensure that the operation he carries out does not lead him to participate in tax fraud (…)". In that case, proof had been based solely on the identification number of the Belgian VAT of the buyers and on the declaration of the buyers that the goods would be transported to Belgium;

• It was further reiterated in the judgment Mecsek-Gabona (C-273/11) that "(…) in a situation where there is apparently no tangible evidence to conclude that the goods in question were transferred outside the territory of the Member State of supply, the fact of requiring the taxable person to present such proof does not guarantee the correct and simple application of exemptions. On the contrary, this obligation places him in a situation of uncertainty (…)", emphasising that "(…) the proof that the seller can present to the tax authorities depends essentially on the elements he receives from the acquirer for that purpose (…)" and "(…) once the seller has fulfilled its obligations regarding the proof of an intra-community supply, the acquirer not having fulfilled its contractual obligation to dispatch or transport the goods outside the Member State of supply, it is the latter who must be considered the debtor of VAT in this Member State (…)" (cf. Judgment Mecsek-Gabona, case C-273/11). Now, in the situation of the record the Claimant also acted in good faith and took the measures that can reasonably be required of him to ensure that the operation does not imply his participation in tax fraud;

• The declaration of the buyers is, from the outset, the element of proof received from those entities that objectively proves the departure of goods to the other Member State. Now, the Claimant is in possession of sufficient elements proving that the invoice holder is the recipient of the goods, that the place of delivery is the wind farm located in another Member State, that the transferred goods have correspondence in international dispatch declarations whose copy it managed to obtain (although it did not intervene in the process) and those international dispatch declarations are correctly completed, dated, signed and stamped by representative of the manufacturer of the goods, carrier and consignee, all of them entities independent of the seller;

• According to the understanding endorsed by the VAT Services Directorate in Circular Notice No. 30009, of 10.12.1999, regarding "proof of intra-community transfers of goods", and which remains in force, as well as sanctioned in case T909 2007296, by order of the Deputy Director-General of Taxes, of 31.03.2009, constitute possible means of proof, exemplarily, transport documents, which, depending on whether it is road, air or maritime, may be, respectively, the statement of shipment (CMR), the bill of lading or bill of lading, transport contracts concluded, remittance notes, etc. In fact, beyond the mentioned declarations, CMRs and remittance notes, the Claimant proceeded to attach the transport contracts of the customers with the carriers;

• From those contracts it is demonstrated that the wind turbine towers in question are transported in three sections/stretches. The contracts contain the following excerpts relevant to understanding the conditions for transport of the wind sections: "(…) Notwithstanding the documentation and information opportunely made available by the Claimant in the context of the inspection procedures it was concluded that the transport documents could not be accepted as justifying the departure of goods from Portugal;

• This documentation, combined with the declaration issued by the buyer, which expressly attests to the receipt of the invoiced goods, with a complete list of invoices, is by itself sufficient to prove that, in fact, they physically left national territory. Furthermore, in the analysis of the mentioned transport documents attached, the inspection services deliberately and wilfully omitted the circumstance that the place of delivery of the goods was always completed indicating the destination of the Wind Farm in question, located outside Portuguese territory;

• References to the ports and quays through which the goods would pass with a view to the destination of the wind farm are in parentheses in some of the documents, following the mention of the place of destination of the transported goods;

• Thus, document 6 attached with the gracious complaint that is part of the instructing administrative proceeding (relating to 2009), sheets 50 to 219 of the gracious complaint proceeding contains:

• all remittance notes and all CMRs attached clearly identify as place of destination and discharge..., Spain;

• the identification of the manufacturing company, signature of the company manager and stamp of the respective entity C..., S.A, an entity independent of the Claimant;

• the complete identification of the Company responsible for transport, signature of the manager responsible (and sometimes stamp) of the respective company responsible for transporting the goods, entities D… or Transport E…, SL, entities independent of the Claimant;

• the complete identification of the consignee Company, the signature of the manager and stamp;

• the description of the goods as to their nature ("wind section" or "wind tube"), quantity and weight;

• the identification of all goods individually by identification number (and it is precisely this number that allows the VAT Services Directorate, in the context of review of the hierarchical appeal, to effect a more complete correspondence than that provided by the Claimant, between CMR and transport remittance notes, in relation to this project, Wind Farm F…,).

• The Claimant further emphasises that regarding invoices Nos. 310090, 310093 and 310488, the indication of the project "F…" is correctly made and in the copies of CMRs and transport remittance notes presented concerning this project (sheets 50 to 219 of the gracious complaint proceeding) there are no references to any other project. In particular, there are no references to the project G… – in relation to which documents proving the operations reflected by invoices 310058 and 310082 were presented, which were even accepted by the inspection services as proof of intra-community transfers of goods (exempt from VAT) carried out by the Claimant;

• Furthermore, it was also clarified in the administrative phase that, regarding the operations taxable in the fiscal year 2010, the invoices and respective transport documents are completely different from the transport documents relating to operations carried out by the Claimant in the context of the project "F…" (invoices Nos. 310090, 310093 and 310488), which is easily verified by comparison between the documents of sheets 50 to 219 and the document attached as annex 9 to the gracious complaint;

• With respect to the documents from fls. 589 to 610 of the gracious complaint proceeding, relating to the project Wind Farm H…, the inspection services also deliberately omit that the place of delivery declared therein, in all 21 international dispatch declarations, is "Wind farm of H…, Spain". All these documents contain the identification of the manufacturing company, signature of the company manager and stamp of the respective entity C…, S.A, an entity independent of the Claimant. Furthermore, they contain the complete identification of the Company responsible for transport, signature of the manager responsible (and sometimes stamp) of the respective companies responsible for transporting the goods: I… Lda and J…, SA. The mentioned transport documents appear to be completely legible and the goods are described as to their nature ("wind section" or "wind tube"), quantity and weight, as well as through the corresponding identification number of the tower component;

• With respect to document 3, sheets 41 to 61 of the gracious complaint proceeding, relating to the project of the wind farm K…, in Greece, from the analysis of the inspection services it was also omitted that the transport documents indicate as place of delivery of the goods "…". The reference to the Port of Aveiro, in some of the documents, is in parentheses as being the unloading location before the final destination: …. All transport documents contain the complete identification of the Company responsible for transport, signature of the manager responsible (and sometimes stamp) of the respective company responsible for transporting the goods, the company N…, S.A., an entity independent of the Claimant. They also contain the complete identification of the manufacturing company, signature of the company manager and stamp of the respective entity L…, S.A., an entity independent of the Claimant. The goods are described as to their nature, quantity and weight, as well as through the corresponding identification number;

• With respect to document 4, sheets 62 to 82 of the gracious complaint proceeding, relating to the project of the wind farm M…, in Greece, from the analysis of the inspection services it was also omitted that the transport documents indicate as place of delivery of the goods "M…". All transport documents contain the complete identification of the Company responsible for transport, signature of the manager responsible (and sometimes stamp) of the respective company responsible for transporting the goods, the company N…, S.A., an entity independent of the Claimant. They also contain the identification of the manufacturing company, signature of the company manager and stamp of the respective entity L…, S.A., an entity independent of the Claimant;

• The Claimant concludes that in light of the foregoing, it is unequivocal that the transport documents made available to the inspection services prove the departure from Portuguese territory, regardless of, in some situations, the place of receipt in question not being the place of final delivery, being perfectly admissible the carrying out of successive transports until the final destination;

• The Claimant then emphasises that the so-called "Dispatch Declaration" or International Road Bill of Lading CMR is the document proving the contract for international road transport, under the Convention on the Contract for the International Carriage of Goods by Road, signed in Geneva on 19-05-1956, approved in Portugal by Decree-Law No. 46235, of 18 March 1965. That in accordance with Article 9 of that Convention, "the dispatch declaration, until proof to the contrary, is proof of the conditions of the contract", which applies to the completion of the field relating to the place of delivery;

• Now, since proof to the contrary was not made, the declarations signed by all those entities make proof as to the destination they mention for the goods and which corresponds to wind farms located in the Member States of the acquiring entities. And it should not be said that, regarding intra-community transfers to Spain, it is not possible to establish a match between invoices and transport documents, as such assertion is false and totally devoid of sense. The circumstance that the designations are not coincident derives only from the fact that the transport relates to components and the invoice relates to the whole tower (formed by three components). However, correspondence exists from the moment the nature/description of the goods allows us to verify that it is the same goods;

• In the transport of smaller movable goods (for example, mobile phones, computers, refrigerators, etc.) one does not require 100% individualised correspondence according to the maximum detail and specification possible. It is accepted that there is correspondence between invoice and remittance note by the nature of the good (for example, a document that merely mentions "5 refrigerators");

• Individualisation and specification of the goods is not required in those documents, it being sufficient, both in invoices and in transport documents, the common designation of the nature of the goods. In fact, paragraph b) of No. 5 of Article 36 of the VAT Code provides that "Invoices or equivalent documents must be dated, numbered sequentially and contain the following elements: b) The quantity and usual designation of the goods supplied or services provided, with specification of the elements necessary for the determination of the applicable rate (…)";

• Furthermore, given that the Directive No. 2006/112/EC, of the Council, of 28 November 2006, on the Common VAT System provides that "(…) the only mandatory mentions that must obligatorily appear, for VAT purposes, on invoices (…) are (…) the quantity and nature of goods delivered or the extent and nature of services provided" (cf. Article 226, No. 6), nothing more can be imposed on the VAT taxable person;

• The Claimant, to reinforce its position, cites doctrine, F. PINTO FERNANDES and NUNO PINTO FERNANDES who state that "(…) The expression «usual designation of the goods supplied or services provided, with specification of the elements necessary for the determination of the applicable rate» contained in paragraph b) of No. 5 of Article 35 of the VAT Code is intended to enable the customer and the Administration to control whether the rate applied to the value is correct. The indication of a Merchandise Code number or other similar identification, provided it enables clear and unequivocal access to knowledge of the product to which it relates, falls within paragraph b) of the cited No. 5 of Article 35 (…)" (cf. Annotated and Commented VAT Code, 3rd Edition, 1995, pp. 609 to 610);

• Now, concludes the Claimant, when the carriers hired by the acquiring customers add an individualisation by reference/identification number of the good, as in the present case, they do so spontaneously since it is not required;

• Wind section or wind tube is the common designation of the components of the wind turbine tower. In some of the documents in the record additional mentions of T1, T2 or T3 are added, which specify whether it is the section of the base, middle or top of the tower. From the analysis of the documents it appears that the different weights (52 or 33 tonnes) are precisely due to the position of the section of the tower in question, since, being conical tubular towers, the diameter, dimension and weight decrease in the section of the top of the tower;

• Moreover, the designation "wind section" or "wind tube" is not confusable with any other component of a wind structure/wind generator/wind turbine, always and in all cases corresponding to the sections of a tubular tower. In fact, none of the other components of a turbine receive, as common designation, the designation "wind section", "wind frame", "wind tube", "wind frame T1", "wind tower fraction T1" (cf. CMR No. … in which the receiver of the goods in …, Spain, also designates it, in field 24, as WTG T1, that is wind turbine generator T1), or "1 wind tower section" (cf. CMRs No…, No… and No…, which also contain the designations WTG T1 and WTG T3). Effectively, the common designation here in question is exclusive to the fractions of the wind tower, not applying to the nacelle, blades or rotor, which constitute the other components of a turbine;

• In fact, the analysis of the invoices from the company manufacturing the towers, C…, S.A., which breaks down the invoiced goods - "1 unit of tower V90" - into the respective three components designated as "section 1", "section 2" and "top section", also appears to confirm that the designation "wind section", "wind tube" or "wind tower fraction" is common and perfectly perceptible as to the nature of the goods;

• Thus, correspondence between invoices and transport documents should be accepted since the nature/description of the goods according to the common designation allows us to verify that it is the same goods (sectioned in transport, given the enormous size of the whole). It is not legitimate to invoke dissonance between the designation of the invoice "…V90 1,8/2,0 80M IEC 7035" (in which V90 is the turbine model, 1,8/2,0 the power, 80M the tower height, IEC refers to the classification of the International Electrotechnical Comission and 7035 refers to the colour light grey exterior), which perfectly identifies the nature of the good "wind tower", and the designation "wind tube" or "wind tower fraction", contained in the transport documents, which also indisputably identifies the nature of the good. The correspondence is corroborated by the weight of the goods;

• It is important, therefore, to conclude that the impossibility alleged by the inspection services in validating the correspondence between the documents is a mere subterfuge for the lack of willingness to accept the clear evidence that the supplies correspond to the truth of the facts;

• Effectively, the Claimant equipped itself with the sufficient, within its reach, namely to avoid its participation in fraud. In fact, in the situation of the record, there is not the slightest or most remote indication of tax fraud, nor is such alleged by the tax administration services. It would in fact be easy to control tax fraud relating to the goods in question;

• The Claimant states that, notwithstanding, it adopted various measures to ensure that the transfers made by it did not imply its participation in fraud committed by the acquirer, the following being the measures referred to:

• obtaining from the customers declarations signed and stamped, confirming the completion of intra-community acquisitions or exports (cf. RITS OI2011… and OI2011…, docs. 6, 13.2, 16.2 and 17.2);

• obtaining from the customers transport documentation comprising transport remittance notes, international bills of lading and bills of lading relating to international maritime transport (cf. RITS OI2011… and OI2011…);

• obtaining from the customers, in situations where this was possible, copies of customs documents (cf. RITS OI2011… and OI2011…);

• in the specific case of the Wind Farm «F… », obtaining a declaration from the entity operating the wind farm, certifying the implementation of the specific wind tower sections identified by the corresponding serial numbers printed on the towers (cf. doc. 12.6);

• obtaining from the acquiring customers copies of the quality certificates issued by the manufacturers for each of the wind tower sections manufactured, identified by the corresponding serial number, also containing the designation of the corresponding tower (model, height and power), relating to the projects F…, H…, O…, P…, Q…, K…, M…, R…, S… (cf. doc. No. 12.5);

• ensuring by the Claimant that the transfers made by it did not imply its participation in fraud committed by the acquirers and that the actual destination of the goods was outside Portuguese territory also involved the verification of the actual receipt and installation of the wind towers by the promoters/operators of wind farms, proved by the completion of payment by third-party entities, external to the group, acquirers of wind generators for the various declared projects (cf. testimony of witness T…);

• It is important to note that a wind tower such as those in question in the record has a very considerable dimension: 80 metres. To illustrate this dimension, compare it, for example, with one of the towers of …, in Lisbon which has 75 metres in height. The three sections into which the tower is divided for transport also assume an impressive size;

• In the period here referred to (between the third quarter of 2009 and the end of 2010), only 5 wind generators from A… were installed in national territory, namely: 2 V90 towers in the wind farm of …, …, and 3 V90 towers in the mini wind farm of …, in …. In the following year, 6 towers were installed and in 2012 none were (cf. report on wind farms in Portugal at the end of 2012). As such, if one could hypothetically conceive, as a mere theoretical hypothesis, the existence of fraud by the customers of the Claimant, based on suspicion that the wind towers and foundations never left Portuguese territory, occurring in Portugal the consumption of the goods, such theoretical hypothesis would always be summarily dismissed by the finding that, in reality, those dozens and dozens of towers were not installed in Portugal (only 5 towers of the same brand were here acquired and installed at the time);

• Finally, regarding the allegation that the transport was late in relation to the issuance of the invoices, neither does any reason assist the tax administration services;

• As already mentioned, the transport conditions, which are the responsibility of and contracted by the Claimant's customers, are very specific, seeking there a concomitance between delivery and assembly of the farm to minimise the costs of hiring enormous cranes. In this sense, the transport contracts concluded with companies specializing in special transports mention "(…) Transport will be scheduled on dates to supply the main crane according to the assembly rate established in each park, so that the main crane does not have to wait for the trucks (…)". Thus, the fact that transport occurred several months after the sale and invoice is entirely outside the scope of the now Claimant and, moreover, irrelevant;

• Regarding whether the transport of a certain good with destination to the acquirer, in the sense of Article 138 of Directive 2006/112, should be carried out within a certain period, the CJEU ruled, in case C-84/09 – X, judgment of 18 November 2010, that the classification of an operation as intra-community supply or acquisition cannot depend on the observation of any period within which the transport of the good in question from the Member State of supply to the Member State of destination must begin or must be completed. In fact, neither Article 138 of Directive 2006/112, nor Article 14 of the RITI provide, in their wording, that the transport of the good in question with destination to the acquirer must begin or be completed within any period for these provisions to be applicable;

• The said judgment states that imposing a precise deadline for such transport to be carried out would be, furthermore, contrary to the economy of the said provisions, as well as to the context and purposes of the transitional VAT system applicable to intra-community trade. The CJEU had previously ruled on this question, in the judgment Collée, of 27 September 2007, case 146/05, with the argument that it precludes the tax administration of a Member State from refusing to exempt from tax an intra-community supply, which actually took place, merely on the ground that proof of this supply was not produced in time. It further concluded that the right to exemption from VAT corresponding to such supply should only be refused if the taxable person, at first and with full knowledge of the fact, concealed the existence of an intra-community supply, if there is a risk of loss of tax revenue and if this was not completely eliminated by the taxable person;

• On the other hand, the Portuguese legislator also did not establish any temporal requirement regarding proof of the condition for exemption of the departure of goods from the Member State of origin. As such, the considerations made by the tax administration regarding an alleged temporal discrepancy are spurious;

• In fact, it can only be concluded that the now Claimant fulfilled its duties of proof and diligence, as enunciated in CJEU case law, by:

• verifying the status of the acquiring customers;

• obtaining declarations signed by those in accordance with the Circular Notice of the VAT Services Directorate;

• managing to obtain copies of international dispatch declarations, duly completed and signed by several independent entities, in which a wind farm in another Member State was registered as destination.

• Thus, the Claimant took all the measures that can be reasonably required of it, according to a standard of normal diligence, to ensure that the intra-community supply carried out by it did not imply its participation in tax fraud;

• The Claimant understands that the CJEU case law on the matter constitutes clear law, from which flows the non-requirement of any other additional proof of the departure of goods (see, in particular, Judgments Teleos, case C-409/04, Euro Tyre, case C-430/09, and Mecsek-Gabona, case C-273/11, of the CJEU);

• The Claimant further argues that if the law does not require a specific means of proof for the purpose in question, the general means of proof cannot fail to be accepted. Thus, beyond the defect arising from the tax administration's breach of the doctrine that binds it, there is additionally the defect arising from clear violation of Community Law. Now, in accordance with Article 8, No. 4, of the Constitution of the Portuguese Republic (CRP), Community Law is applicable in the Portuguese internal legal system with prevalence over domestic law, as is also inferred from the provision in Article 1, No. 1, of the General Tax Law (LGT);

• The fundamental rule of the supremacy of Community Law has been successively reaffirmed by the jurisprudence of the Court of Justice of the European Communities (CJEC) since the Judgments Costa v Enel (case No. 6/64) and Simmenthal (case No. 106/77) in the following terms: "(…) Moreover, by force of the principle of the supremacy of community law, the provisions of the Treaty and the acts of the institutions directly applicable have the effect, in their relations with the internal law of the Member States, not only to make inapplicable de pleno jure, from the moment of their entry into force, any rule of internal law that is contrary to them, but also – and given that such provisions and acts integrate, with a position of precedence, the legal order applicable in the territory of each of the Member States – to prevent the valid formation of new national legislative acts, to the extent that they would be incompatible with the norms of community law (…)" (cf. Judgment Simmenthal, paragraph 17);

• Such position and understanding are seconded, equally, by Portuguese doctrine by stating that: "(…) Community Law (constituent treaties and provisions endowed with direct applicability) has prevalence or priority of application (Anwendungsvorrang) in relation to the national legislation of the Member States. This priority is translated into the non-application of national law and consequent application of the community norm conflicting with it, but not necessarily its abrogation. (…)" (cf. ALBERTO XAVIER, International Tax Law, Lisbon, 2007, Almedina, page 216);

• Thus it is concluded that for the Tax Authority there is, in the case at hand, no place for the application of the exemption of Directive 2006/112/EC, for lack of 100% safe and tangible demonstration of the departure of goods from Portuguese territory. That is, according to the Tax Authority it is not enough to demonstrate compliance with reasonable measures, according to a standard of normality for an ex works contract, for the taxable person to be able to benefit from the said regime. Now, such understanding contains a blatant illegality due to non-conformity with Community Law;

• The evidentiary requirements enunciated by the Tax Authority are contrary to the principles of proportionality, legal certainty and neutrality, as results from the Judgment Teleos;

• Even if one invokes that such requirements aim to combat possible fraud, however, once again according to CJEU case law, the national provisions necessary to prevent fraud and abuses are admissible in a very restricted manner, must, in particular, imply a case-by-case analysis and respect the principles of proportionality and effectiveness. In this sense, it is stated in the Judgment Leur-Bloem, of 17.07.1997, that "(…) to verify whether the operation in question has that purpose [of fraud or tax evasion], the competent national authorities cannot limit themselves to applying predetermined general criteria, but must proceed, case by case, to a global analysis of the operation (…)" (Case C-28/95);

• Thus, the principle of proportionality presupposes that domestic requirements and measures to combat fraud are based on case-by-case analysis and not on predetermined general criteria. Now, the requirements in question are not made in function of any suspicion or indication of fraud and, furthermore, are not adequate and proportional to the community objective of preventing fraud and determining the Member State in which final consumption occurs. Considering all the foregoing, there is no basis for doubt as to the actual departure of goods from the Member State of supply, especially a doubt based on the pure disregard of suitable declarations from the acquirers and on a non-existent dissonance between the designation of the goods in the invoices and in the transport documents;

Regarding the alleged non-proof of departure of goods in exports

• The Claimant invokes and transcribes, in support of its position, the following legal provisions: Articles 278 and 146 of Directive 2006/112/EC of the Council of 28 November, on the common VAT system; Articles 14 and 29, No. 1 of the CIVA and Article 796-DA, No. 4 of the Implementation Provisions of the Community Customs Code;

• It argues that when it happens, as in the present case, that the customs office of export where the exporter is established, in which the respective declaration is presented and the formalities inherent to export are completed, does not coincide with the customs office of exit and the latter is located in another Member state, it will not be the responsibility of the national customs services to verify the actual departure of goods from the customs territory of the Community. In these situations, provided that the export of the goods has actually occurred and the exporter, unable to obtain a copy of the copy of the SAD presented at the exit office, has provided the alternative proofs referred to in No. 4 of Article 796-DA of the DACAC, the proof of the exemption provided for in paragraph a) of No. 1 of Article 14 of the VAT Code is completed;

• The Claimant emphasises that it is the very rule of the VAT Code that expressly and literally refers to the rules provided for in the Community Customs Code [CCC, approved by Regulation (EEC) No. 2913/92 of the Council, of 12 October 1992] and in the Implementation Provisions of the Community Customs Code (DACAC), and it is certain that those community Regulations are directly applicable without need for transposition;

• The Implementation Provisions of the Community Customs Code, approved by Regulation (EEC) No. 2454/93 of the Commission, of 2 July 1993, regulate the system of definitive export in the respective Articles 786 and following. Therefore, it is incumbent on the taxable person to prove the transfer of goods dispatched or transported outside the customs territory of the European Union in accordance with the mentioned community rules;

• The DACAC provide for the possibility of the actual departure of goods from the customs territory of the Community being effected through a customs office that does not coincide with the customs office of export (i.e., that in which the customs declaration of export was presented), and may even be located in another Member state of the European Union, with the exit office certifying the actual departure of the goods in copy 3 of the SAD (box C) or in its electronic correspondent, in the case of the declaration being submitted by automatic processing systems. This is precisely the situation of the record, in which, being the exit office Spanish, the Portuguese export office could never certify the actual departure of goods;

• Without prejudice, in such situations, bearing in mind the possibility of non-return of copy 3 of the SAD by the exit office, the community legislator adopted a system of presentation of alternative proofs of the departure of goods – Article 796-DA, No. 4, of the DACAC. These alternative proofs are admissible if and when, as occurs in the present case, the customs declaration of export has been presented and there is no coincidence between customs office of export and customs office of exit, and copy 3 of the customs declaration with the certification of departure of goods from the customs territory of the EU has not been duly returned or such certification has not been communicated by the exit customs office to the customs office of export through computerized systems;

• It is, therefore, admissible, in this context, proof by declaration signed by the company that removed the goods from the customs territory of the Community (cf. paragraph c) of No. 4 of Article 796-DA of the DACAC). As such, the Claimant presented the legally admitted evidence elements;

• In the situations under analysis, the contracts for the purchase and sale of wind turbine towers and wind turbine tower foundations were concluded in conformity with one of the clauses of international commerce established by the International Chamber of Commerce (clauses designated as "Incoterms 2000"), namely, "ex works" ("ex-works" or EXW), which means that the Claimant was only obliged to make the goods available to the acquirer in a warehouse located on Portuguese territory, with the customer responsible for the subsequent transport;

• In relation to each of the export operations, the Claimant possesses a declaration signed by the company that removed the goods from the customs territory of the Community, a declaration that refers to the transport of the goods to the Wind Farm located outside the European Union;

• The Claimant emphasises that the dispatch declaration, drawn up on the basis of the convention on the contract for international road transport of goods, signed in Geneva on 19 May 1956, as amended by the protocol of 5 July 1978, completed with the indication of the place of delivery, constitutes proof until proof to the contrary;

• Consequently, the Claimant exhibits a vast list of documents, which are considered as reproduced (Article 205 of the request) which it considers suitable to prove its position;

• With regard to exports to Argentina, relating to the project of the wind farm HH…, five "Foundation from tower EU HH" were involved, as results from the invoices, the Claimant having attached sufficient documents proving the export of the equipment: the international dispatch declarations CMRs No…, …, …, …, …, all dated 16 and 17 March 2010, completed with the nature of the goods, weight, licence plate of the transport vehicle, place of delivery of the goods (wind farm HH…), complete identification of the shipper, complete identification of the manufacturer L…, SA, and signature, stamp and complete identification of the carrier Transport U…, S.A., I…, Lda and V…, S.A.;

• The fact of indicating the Port of Vigo as the place of discharge of the goods does not allow to disregard purely and simply the place of final destination - wind farm in Argentina - which is what is stated in the field relating to the place of delivery. Effectively, in the wind farm "HH…" of the … five 2 MW V90 wind generators from A… were installed;

• With regard to exports to Mexico, relating to the project of the Wind Farm GG…, the Claimant attached sufficient documents proving the export of the equipment. The 19 invoices relate to 19 2 MW V80 towers, 78 metres in height. The 19 transport documents attached are all signed and stamped by the manufacturer L…, Metalomecánica, S.A., being dated in February and March 2010;

• Such declarations are completed with the nature of the goods, weight, licence plate of the transport vehicle, complete identification of the shipper and complete identification of the carrier W…, SL. Receipt actually occurs at the Port of Vigo, as per stamp and signature of the consignee (X…), however the declarations are completed with the place of delivery of the goods (Oaxaca, Mexico), which cannot be disregarded, as it constitutes proof until proof to the contrary. The description of the goods "1 foundation section", "1 Foundation section V80 2 MW 78M IEC IA 7035" or "1 cimentación" always includes the identification number (for example, ID…, ID…, ID…, ID…, ID…, ID…, ID…, ID…);

• With regard to exports to Turkey, relating to the project of the Wind Farm FF…, the 15 invoices relate to 15 V90 towers, with the following description: "Foundation … V90 3 mw 80m AUS 7035 item number 780664". In these operations, the Claimant also attached sufficient documents proving the export of the equipment, as the CMRs are all signed and stamped by the manufacturer L…, S.A. and are dated July 2010;

• Such declarations are completed with the nature of the goods, weight, licence plate of the transport vehicle, complete identification of the shipper and complete identification of the carrier Transport U…, S.A. Receipt actually occurs at the Port of Vigo, as per stamp and signature of the consignee (X…), however the declarations are completed with the place of delivery of the goods (…), which cannot be disregarded, as it constitutes proof until proof to the contrary. The international dispatch declarations identify the goods ("foundation section") by means of identification numbers, allowing the identification of the 15 goods subject of the invoices in question (ID…, ID…, ID…, ID…, ID1…, ID …, ID…, ID …, ID…, ID…, ID…, ID …), mentioning the weight of the goods (51,000kg, 29,450kg, etc);

• With regard to exports to Turkey, relating to the project of the Wind Farm EE…, the 8 invoices relate to 8 V90 towers, with the following description: "Foundation from tower EU HH80 item number 780723". The transport documents are all signed and stamped by the manufacturer L…, S.A. and are dated July 2010. Such declarations are completed with the nature of the goods, weight, licence plate of the transport vehicle, complete identification of the shipper and complete identification of the carrier Transport U…, S.A.;

• Receipt is at the Port of Aveiro, as per stamp and signature of the consignee, however the declarations are completed with the place of delivery of the goods (…, Turkey), which cannot be disregarded, as it constitutes proof until proof to the contrary;

• Finally, regarding exports to Chile, relating to the project of the Wind Farm …, composed of three wind generators, the invoices, CMR, transport remittance notes, bill of lading are sufficient documents and proving the export of the equipment. The three invoices relate to three V52 towers. The description of the goods "Foundation from tower V52 item number 770676" identifies it perfectly. In fact, the identification of the goods is very complete, mentioning model, diameter, and identification number "3 foundation section V52 3318 R7035 IEC/ DK – 173166, 173167, 173168). The transport declarations are completed with the nature of the goods, weight, licence plate of the transport vehicle, complete identification of the shipper and complete identification of the carrier Y…S.A.;

• The CMR No…, of 15 January 2010, is correctly completed, signed and stamped in fields 22 and 23, although it is not signed in the field of receipt of goods. However, the place of delivery of the goods (field 3 of the CMR) is completed: …, Chile (desc Sines). The transport remittance notes with the same date (15.01.2010), have exactly the same description (foundation section V52 3318 R7035 IEC/ DK), also contain the mention item 770676 that appears in the invoice, and in addition to the identification numbers of the … (..., …,…), contains the identification numbers of the manufacturer L…, S.A. These remittance notes also indicate as unloading location … – Chile;

• It is not correct to disregard the document of international maritime transport due to the circumstance that this document does not indicate the corresponding invoice, since this is not mandatory. Nor is it correct to discredit based on the discrepancy between the date of the invoices (issued on 2010-07-02) and the said document proving international maritime dispatch. A more careful analysis of what is contained in the inspection report itself would allow to verify that the invoices in question, dated in July, replace invoices relating to the same equipment, issued in January 2010 (precisely the date of the CMR, remittance notes and bill of lading), namely invoices 310582, 310583, 310585, whose incorrect value of € 14,053.00 determined its annulment (CR…, CR…, CR…), being finally issued the invoices here in question. Thus, there is not even any temporal discrepancy between invoices and transport documents;

• Regarding the suitability of the documentary evidence presented, CJEU case law is further invoked. In the Judgment of 21 February 2008, Case C-271/06, Case Netto Supermarkt, the referring court asks, in substance, whether Article 15, No. 2, of the Sixth Directive, should be interpreted as precluding Member States from exempting from VAT a supply of goods for export outside the Community when the conditions for such exemption are not met, but the taxable person could not be aware of this, even having acted with the diligence of a prudent merchant, due to the falsification of the export proof presented by the acquirer;

• The CJEU notes that, "As results from the first part of the preamble of Article 15 of the Sixth Directive, it is for the Member States to set the conditions of application of the exemption for a supply of goods for export outside the Community. This provision also specifies that the Member States set these conditions with the aim of «preventing any possible fraud, evasion and abuse». However, as noted, in the exercise of the powers that the community directives confer on them, Member States must respect the general principles of law that form part of the community legal system, including in particular, the principles of legal certainty and proportionality, as well as the protection of legitimate expectation;

• In the Judgment of 19 December 2013, Case C-563/12, Case BDV Hungary Trading, the question is raised, namely, whether it is compatible with the principles of fiscal neutrality, legal certainty and proportionality, the fact that the legislation of a Member State provides for additional requirements to those established in the Directives and makes dependent on cumulative objective requirements that are not contained therein the classification of an export as exempt, with a view to preventing evasion, abuse and tax fraud, with a view to correct recovery and collection of the tax, and the Tax Administration can change the classification of an exempt export and demand payment of the tax from the taxable person. The CJEU again emphasizes that, "(…) as results from Article 131 of Directive 2006/112, the exemptions provided for in Chapters 2 to 9 of Title IX of this directive, of which Article 146 is part, apply under the conditions set by Member States to ensure the correct and simple application of said exemptions and to prevent any possible fraud, evasion or abuse. (…)". Again invoking respect for the principles of legal certainty, proportionality and protection of legitimate expectation, the CJEU emphasizes that, although it is legitimate for measures adopted by Member States to aim to preserve the rights of the Treasury as effectively as possible, these measures must not exceed what is necessary to achieve that aim;

• However, in the situation in question, a national regulation that subjects the exemption in export to a deadline for departure with the aim of combating tax evasion and fraud, but which does not allow taxable persons to demonstrate, in order to benefit from the exemption, that the condition of departure was met after the expiry of the deadline, and which does not give taxable persons the right to refund of the VAT already paid as a result of non-compliance with that deadline when the same taxable persons provide proof that the goods left the customs territory of the Union, goes beyond what is necessary to achieve said objective;

• In light of the foregoing, the Claimant understands that CJEU case law on the matter constitutes clear law, from which flows the non-requirement of any other additional proof of the departure of goods;

• If this is not understood and being a matter of interpretation of Community Law that assumes relevance for the present dispute, the respective interpretation should be submitted to the Court of Justice of the European Union competent to decide on a preliminary basis on the interpretation of Community Law;

• The question to be interpreted by the Court of Justice is the following: "Should the evidentiary requirements of national regulation on the demonstration of departure from the territory of the European Union, which are limited to referring to the customs provisions governing the matter, be interpreted, taking into account the objective of combating tax evasion and fraud, as precluding that, in circumstances such as those in the main proceedings, the right to exemption of an export be refused to the seller who managed to obtain copies of international dispatch declarations in accordance with the CMR Convention, duly completed and signed by several independent entities, in which a wind farm located in the third country was registered as the destination of the goods, but did not obtain absolute and tangible proof of the departure of the goods, in a situation where there is no indication of fraud by the buyers of the wind towers?";

• Finally, it is also important to note that, with respect to the operations relating to projects FF…, EE… and DD…, being subsequent to 28.05.2010 (date of commencement of Regulation EU No. 430/2010, of the Commission, of 20.05.2010, which amended No. 4 of Article 796-DA of the DACAC), supplementary proofs beyond the economic operator's own records would not even be required. In fact, being a matter of supply of goods to wind turbines, beyond the other alternative means of proof, proof is also admissible through the records of the economic operator, proof regarding which there is no contrary element in the record;

Regarding compensation for undue guarantee and compensatory interest

• The Claimant argues that it is entitled to be indemnified for undue guarantee, plus corresponding compensatory interest, because it provided bank guarantees in the tax enforcement proceedings instituted for the coercive collection of the tax acts sub judice, having incurred costs with their provision. Pursuant to the provision of Article 53, No. 1 of the LGT, "The debtor who, to suspend execution, offers a bank guarantee or equivalent will be indemnified in whole or in part for the damages resulting from its provision, if he has maintained it for a period exceeding three years in proportion to the outcome in administrative appeal, judicial impugnation or opposition to execution which have as their object the debt guaranteed.";

• However, No. 2 of the same legal provision provides that "The period referred to in the preceding number does not apply when it is verified, in gracious complaint or judicial impugnation, that there was error attributable to the services in the assessment of the tax." For its part, No. 1 of Article 171 of the CPPT provides that "Compensation in case of bank guarantee or equivalent improperly provided shall be requested in the proceeding in which the legality of the debt to be executed is disputed." No. 2 of the same article adds that "Compensation should be requested in the complaint, impugnation or appeal or if its reason is subsequent within 30 days after its occurrence.";

• In fact, such right of reimbursement of the taxpayer is postulated in Article 22 of the CRP, under which "The State and other public entities are civilly liable, jointly and severally with the holders of their bodies, officers or agents, for actions or omissions performed in the exercise of their functions and because of such exercise, resulting in violation of rights, freedoms and guarantees or damage to others.";

• In the present case, as invoked and better evidenced above, the tax act sub judice results from manifest error of the tax administration, whereby indemnification provided for in the cited Article 53 of the LGT is required;

• Furthermore, the Claimant proceeded to its payment. Thus, with the present request for arbitral determination proceeding, as it cannot fail to be decided, the Claimant should be reimbursed the amount improperly paid;

• The Claimant also has, pursuant to Article 43, No. 1, of the LGT, the right to compensatory interest whose recognition is also requested.

A.2. In the arguments, the Claimant maintains its position with the following argumentation:

• It begins by indicating the facts that it considers to be proven in the record, giving themselves as reproduced for all legal purposes the non-disputed facts;

• It then indicates the reason for the disregard of the transport documents presented to emphasise that in the inspection procedures the Tax Authority did not have a single and unequivocal criterion in the assessment of the documents, treating identically situations differently;

• The Claimant subsequently explains the preceding assertion, beginning with the projects of wind farms in Spain ("F…" and "H…"), whose disregard of the documents was related to the temporal discrepancy of the remittance notes and CMRs in relation to the invoices (invoices of late 2009 and transport documents of late 2010), considering the Tax Authority that the time lapse calls into question the correspondence between the invoices and transport documentation (cf. pages 12 and 13 of the RIT OI2011…). To counter that the Tax Authority did not assume a single position, as conflicting with what was stated earlier, in the same inspection action other transport documents identically completed were accepted, to justify other supplies destined for Spain (projects G… and QQ…), the inspection services referring that "(…) although it is not possible to make a rigorous association of the documents now presented with the invoices in question, it appears that they should be considered as proof of the physical departure of goods, and consequently the recognition of intra-community supply for the purposes of Article 14 of the RITI, since the elements allow establishing with reasonable certainty the destination of the goods (…)", adding also that "(…) although there is a time difference between the date of the transport documents (with dates from April to July 2009) and the date of the invoice under analysis (28.09.2009) and, taking into account the registration of the taxable person in Portugal (24.07.2009) the association of the CMRs to the invoices is admissible, whereby no correction is made regarding this operation (…)" (cf. p. 12 of RIT OI2011…);

• Thus, the basis for the tax acts regarding the 3rd and 4th quarters of 2009 is related to the alleged insufficiency of the declarations of the acquirers confirming the acquisitions and the alleged insufficiency of the transport documentation, due to an excessively long time gap in relation to the corresponding invoices; Regarding the year 2010, the inspection services based the corrections made, equally, on the inadequacy of the support elements for the exemptions – declarations from EU customers confirming the completion of intra-community acquisitions and receipt of goods -, the tax administration referring that there existed "(…) only declarations from EU customers corresponding to other companies in group B…, confirming the completion of intra-community acquisitions (…)" (cf. p. 7 of RIT OI2011…);

• For all that has been said, the Claimant concludes that the alleged insufficiency of the declarations of customers confirming the completion of intra-community acquisitions will be based on the circumstance that they are entities of the same corporate group;

• It moves to other projects, arguing that the same occurred with their respective documents. The Claimant adds that, having been attached in the inspection phase some transport documents relating to intra-community supplies, the inspection services referred the following: "(…) For Z…, S.A in the operations associated with the project K…, in which transport remittance notes were presented within Portuguese territory indicating place of discharge the Port of Aveiro, with illegible signatures and without receipt date of goods; the CMR No… contains an illegible signature (on receipt of goods), with unproven departure of goods from national territory. In the operations associated with the project H…, because the documents presented were transport remittance notes within Portuguese territory and CMRs (No…) indicating as place of discharge the Port of Aveiro, with unproven departure of goods from that port (…). In the operations associated with projects RR…, SS…, P…, Q…, TT…, R…, UU…, S…, … and O…, because transport documents or other elements were not presented which prove the exemption of the declared operations (…)" (cf. p. 10 of RIT OI2011…). To conclude the Claimant that in the same inspection action other identically completed transport documents were accepted, to justify other supplies destined for Spain and France (projects VV…, WW…, F…, XX…, YY…, ZZ… and AAA…), the inspection services referring that "(…) although it is not possible to make a rigorous association of the documents now presented with the invoices in question, it appears that they should be considered as proof of the physical departure of goods, and consequently the recognition of intra-community supply for the purposes of Article 14 of the RITI, since the elements allow establishing with reasonable certainty the destination of the goods (…)" (cf.p. 11 of RIT OI2011…). Thus, the basis for the tax acts regarding 2010, in the part of intra-community supplies, is related to the alleged insufficiency of the declarations of the acquirers confirming the acquisitions and the alleged insufficiency of the transport documentation of two Greek projects which indicated as place of discharge the Port of Aveiro;

• The inspection services considered the exemption unproven in the operations declared as exports in 2010, with the following grounds:

• "(…) For AA…, SA – invoice No. 310697 of 04/03/2010 to which CMR No… was associated, indicates as place of discharge of goods, Port of Vigo, and the same contains an illegible signature and without any reference (stamp, seal or other) from the Spanish customs authority, with no additional document presented that proves either the receipt of goods at that port or the subsequent departure for the third country; the same occurs with invoices No. 310698, 310699, 310700 and 310701, to which CMRs were associated, which similarly to what was referred, indicate Port of Vigo as place of discharge, without any other document that proves unequivocally the departure of goods from that port with destination to the third country.(…);

• For BB… – invoice No. 310602 has associated CMR No…, which indicates place of discharge of goods the Port of Vigo, with no additional document presented that proves either the receipt of goods at that port or the subsequent departure for third country; the same occurs with the remaining invoices issued for that customer (…). Still regarding exports to Mexico (project GG…), the tax administration sustains that from the analysis of the Unique Customs Documents No. …, … and…, it is not possible the association with the invoices to which they relate;

• For CC… – CMR No… was now presented which indicates as place of delivery, … – Chile, with discharge in Sines, and the same is not signed by the receiver of goods, with no additional document presented that proves either the receipt of goods at that port or the subsequent departure for third country; for its part the transport remittance notes annexed do not prove that goods left Portuguese territory (…). Still regarding exports to Chile, the tax administration sustains that the Bill of Lading (bill of lading proving international maritime transport) does not contain reference to the corresponding invoices and vice versa;

• For DD… – to prove the exemption of operations associated with the project EE…, only internal transport remittance notes were submitted, with unproven departure of goods from national territory. Regarding the remaining operations declared for that customer and which were indicated as belonging to the project FF…, the CMRs presented contain illegible signatures and indicate as place of discharge, Vigo Quay, with no document presented that proves receipt of goods at that port and departure from it with destination to Turkey (…)" (cf. p. 9 of RIT OI2011…);

• In sum, the reason for the alleged inadequacy of the transport documents is the lack of unequivocal proof of discharge of goods in the territory of third country, notwithstanding the demonstration of departure from Portuguese territory in the generality of the situations analysed;

• The contracts for the purchase and sale of wind turbine towers and wind turbine tower foundations were concluded in conformity with one of the clauses of international commerce established by the International Chamber of Commerce (clauses designated as "Incoterms 2000"), namely, "ex works" ("ex-works" or EXW), which means that the Claimant was only obliged to make the goods available to the acquirer in a warehouse located on Portuguese territory, with the EU customer responsible for the subsequent transport to the other Member State (cf. doc. No. 7 consisting of transport contracts concluded by the Claimant's customers and all invoices containing the mention EXW);

• Ensuring by the Claimant that the supplies made by it did not imply its participation in fraud committed by the acquirers and that the actual destination of goods was outside Portuguese territory also involved the verification of the actual receipt and installation of wind towers by the promoters/operators of wind farms, proved by the completion of payment by third-party entities, external to the group, acquirers of wind generators for the various declared projects (cf. testimony of witness T…);

• The models of wind towers from the various manufacturers are not compatible with each other, and even regarding the different models of towers marketed by the Claimant at the time of the facts, the sections are not compatible with each other (testimony of witness CC…, employee of one of the manufacturing companies supplying the Claimant);

• In the period between the third quarter of 2009 and the end of 2010, only 5 wind generators from… were installed in national territory, namely: 2 V90 towers in the wind farm of …, …, and 3 V90 towers in the mini wind farm of Serra …, in … (cf. doc. No. 11);

• The Claimant then indicates the equipment that is installed in Spain, being: in the wind farm "F…", 22 … V90 wind turbines (cf. doc. 12.1); in the wind farm "H…", 9 A… V90 wind turbines (cf. doc. 12.1); in the wind farm "O…", 4 … V90 wind turbines (cf. doc. 12.1);

• Makes the same with respect to wind farms located in Greece, being the following:

• in K… and M…, located in … and … in Greece, are 15 … V90 wind turbines (cf. doc. 12.1 and information at http://www... );

• in the wind farm P…, are 8 … wind turbines (cf. doc. 12.1); in the wind farm Q…, there are also 8 …V90 wind turbines (cf. doc. 12.1);

• in Chile, wind farm DD…, are implanted 3 …V52 wind turbines (cf. doc.13.1);

• in Turkey, wind farm EE…, are implanted 38 … V90 wind turbines (cf. doc. 14) and in the wind farm FF…, are implanted 31 …V90 wind turbines (cf. doc. 15);

• in Mexico, wind farm GG…, are implanted 51 … V80 wind turbines (cf. doc. 16.1);

• in Uruguay, wind farm HH…, are implanted 5 …V90 wind turbines (cf. doc. 17.1);

• With reference to the invoices...

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