CAAD 244/2018-T: VAT Deduction Rights for Mixed Taxable Persons Using Real Allocation Method

ARBITRAL DECISION

REPORT

A..., a legal entity number ..., with registered office in ..., ...-... ..., (hereinafter, the "Claimant" or "Municipality"), came, pursuant to the terms and for the purposes of Articles 2, paragraph 1, letter a) and 10 of Decree-Law No. 10/2011, of 20 January, which approved the Legal Framework for Arbitration in Tax Matters (hereinafter, "RJAT"), to request the constitution of an Arbitral Tribunal, with the intervention of a single arbitrator, in which the Tax and Customs Authority (hereinafter, the "Respondent" or "AT") is the respondent, with a view to the declaration of illegality of the decision to dismiss the gracious complaint No. ...2017... and, consequently, the recognition of a Value Added Tax credit (hereinafter, "VAT") in the amount of €18,955.46.

On 14 May 2018, the request for constitution of the arbitral tribunal was accepted and automatically notified to the AT.

In accordance with the provisions of Article 11, paragraph 1, letter c) of the RJAT, the Arbitral Tribunal was constituted on 25 July 2018.

Given that, in the case at hand, there were no reasons that would make it useful to hold the meeting referred to in Article 18 of the RJAT, the holding of the meeting scheduled for 29 October 2018 was dispensed with.

The Claimant invokes, in summary, that:

• It is a legal entity of local public law that pursues its municipal responsibilities, both within the scope of its authority powers and within the scope of operations that do not fall within the scope of its authority powers.

• In this context, it carries out operations subject to VAT, as well as operations exempt from VAT.

• In the year 2014, it deducted VAT paid on the acquisition of certain resources directly related to water distribution to residents based on the application of the actual allocation method.

• Following an internal review of procedures for the year 2014, and in light of the provisions of Articles 19, 20 and 23 of the VAT Code, it found that it had unduly limited its right to deduction and, therefore, had the right to be reimbursed for the tax paid.

• It also found that it had unduly limited its right to deduct VAT incurred on certain resources allocated entirely to the performance of operations subject to tax, having calculated an additional VAT to deduct using the actual allocation method of €4,003.70.

• Under Articles 22 and 98 of the VAT Code, it effected in 2016 the deduction of VAT incurred on the acquisition of goods and services related to "common" resources, as well as on the acquisition of goods and services directly allocated to operations subject to tax.

• On 4 October 2016, it submitted a replacement periodic declaration for the 4th quarter of 2014, having calculated a VAT credit in the amount of €18,955.46.

• In order to confirm the value of the credit, it contacted the AT both via e-counter and by telephone, and the AT clarified that the credit would not be made available in its current account since the replacement declaration concerned a period subject to tax inspection.

• The inspection action covered the years 2011 to 2015 and resulted in a VAT reimbursement of €130,000.00. In the course of the said action, corrections were identified in the amount of €95,484.08.

• Notwithstanding having accepted the majority of the corrections made in the course of the said inspection action, it submitted on 11 May 2016 a gracious complaint against the corrections made by the Respondent relating to the Municipality's water self-consumption.

• This resulted in additional VAT assessments in the amount of €25,601.35.

• On 31 January 2017, it submitted a request to the Finance Service of ... asking for clarification regarding the value of the credit existing in its favor and how that amount could be used as compensation for future payments.

• The Respondent converted the request into a gracious complaint and communicated the dismissal of its claim on 12 March 2018.

• With regard to the non-recognition of the VAT credit by the AT, this circumstance is related to the time period and the moment when the Municipality exercised its right to deduction, understanding, however, that the recovery of VAT paid in excess was carried out within the legal time period and in accordance with the provisions of Articles 20 to 23 of the VAT Code.

• The AT's failure to comply with its duty to provide reasons for decisions on tax matters that affect the rights or legally protected interests of taxpayers as provided for in Articles 268, paragraph 3 of the Constitution of the Portuguese Republic (hereinafter, "CRP"), 77 of the General Tax Law (hereinafter, "LGT") and 125 of the Administrative Procedure Code ("CPA"), insofar as the lack of reasoning results in obscurity, contradiction and insufficiency regarding the motivation of the act performed.

• Through the reasoning, the iter cognoscitivo that led to the performance of that act should be revealed, with the taxpayer becoming aware of the factual and legal reasons that underlie it. However, in its decision, the AT merely transcribed the rule of Article 23 of the VAT Code and concluded that "it is no longer legitimate for the applicant's request to be recognized regarding the VAT credit (…) calculated in the context of the submission of the replacement DP for the fourth quarter of 2014, since it refers to a change in the method adopted for the deduction of tax on goods of mixed use and not merely a correction resulting from the provisional calculation carried out in accordance with Article 23 of the VAT Code."

• It understands why Article 23 of the VAT Code is not applicable to the specific case, but considers it remains to be clarified why the change in the deduction method is not authorized and what the legal basis is for supporting that position.

• Regarding the time and period for the exercise of the right to deduction, it complied with the law and further maintains that the AT's interpretation is not based on any legal ground.

• In CAAD (Administrative Arbitration Centre) decision No. 489/2017-T, of 1 February 2018, in everything similar to the present case, the tribunal ruled that "errors in VAT deduction do not constitute material or calculation errors, but rather classification errors or errors of law and, therefore, the regime contained in paragraph 6 of Article 78 of the VAT Code is not applicable to them. Consequently, given the inapplicability of that rule or any other special provision, in the case of an error of law in VAT deduction, the general and supplementary time period of four years counted from the birth of the right to deduction, contained in Article 98 of the VAT Code, should be applied."

• The AT's understanding condemns the lack of any practical effect to the submission of replacement declarations by taxpayers.

• The law provides for the possibility of taxpayers recovering the tax paid through the deduction methods expressly governed by law and within the established time periods.

• Regarding the time of exercise of the right to deduction, Articles 23 and 24 of the VAT Code determine the time of regularization of VAT and not its deduction.

• The case under analysis does not deal with a situation of regularization of tax resulting from the calculation of the definitive deduction percentage, but rather a deduction of VAT not made at the time of recording the invoice that supports that right.

• Article 22, paragraph 2 of the VAT Code provides that "the deduction must be made in the declaration of the period or the period following that in which the invoices were received (…)".

• From this provision it follows that the taxpayer can deduct VAT in the period of receipt of invoices and in subsequent periods.

• Taxpayers can thus deduct VAT incurred at a time later than the receipt and accounting of invoices.

• The time limit for exercising the right to deduction is limited by the statute of limitations period of Article 98, paragraph 2 of the VAT Code, that is, a period of 4 years.

• Article 98, paragraph 2 of the VAT Code covers situations in which the taxpayer did not deduct the tax at the time it became due and situations in which the taxpayer exercised its right to deduction incompletely and subsequently corrects or modifies it.

• It exercised the right to deduction within 2 years, therefore within the 4-year period provided by law.

• Contrary to what the AT argued in the dismissal decision, it did not exercise the option not to deduct the VAT paid; it simply did not do so because it made an error in the classification of the operations performed.

• If a taxpayer makes an error of law, it must have the legitimacy to correct it.

• A situation in which it would not be possible to correct errors of law would be incompatible with the principle of fiscal neutrality.

• Article 23 of the VAT Code provides that mixed taxpayers must opt for the method according to which they will effect the deduction of VAT incurred, either actual allocation or pro rata.

• However, the law does not deny the right to reconsider the choice of method in relation to each cost.

• It has the right to indemnificatory interest under Article 43, paragraph 1 of the LGT, since it considers that error occurred attributable to the services.

Also, in the context of allegations, the Claimant – in response to what was argued by the AT – came to clarify that:

• It does not request this Tribunal to rule on the lack of reasoning presented by the AT in the context of the gracious complaint;

• The claim formulated in the initial petition was the declaration of illegality of the decision to dismiss the gracious complaint in which the VAT return for the period 2014/12T was analyzed and not the recognition of a right, with the credit being treated by the AT as an effect that is in a relationship of prejudicial nature, arising as a consequence of that declaration of illegality. That is, the "recognition of a right" arises as a consequence and not as the object of the claim under analysis.

On the other hand, the AT argues that:

• The Claimant is a legal entity of public law that performs, within the scope of its responsibilities, operations subject, not subject and exempt from VAT.

• Following the inspection action for the exercise of 2014 (inspection procedure No. OI2015...), corrections to VAT resulted in the amount of €39,614.44.

• During the inspection action, the Claimant informed that it had adopted the actual allocation method of deduction, having deducted all tax paid on the acquisition of goods and services allocated to the water capture and distribution sector.

• On 12 February 2016, the Claimant submitted an amendment declaration in which it indicated being a mixed taxpayer with actual allocation of part of the goods, as well as a pro rata of 30%.

• On 4 October 2016, the Claimant submitted a replacement periodic declaration, in which it calculated a VAT credit of €15,539.23, because, following an internal change in VAT procedures, it understood that the deduction of tax was lower than what it was entitled to.

• Indeed, the taxpayer recorded the cost documents related to the activity developed and proceeded to their classification for VAT purposes, deducting the tax to which it understood it was entitled.

• However, this procedure had been verified and corrected in the inspection, in December 2015.

• Given that the replacement periodic declaration resulted in a situation more favorable to the Claimant than that which had been corrected through the inspection action, the declaration submitted was converted into a gracious complaint that was analyzed by the Finance Directorate of ... .

• In the gracious complaint, the Claimant invoked that it had proceeded to changes in the calculation of deductible tax relating to mixed-use inputs, now implementing the pro rata deduction criterion.

• In March 2018, the Finance Directorate of ... notified the Claimant of the decision to dismiss the gracious complaint, basing its decision on the following: "(…) The complainant defined as a criterion to use the actual allocation method of all goods that allows it to deduct the tax paid on acquisitions of goods and services, by allocating to each activity sector, now being able to deduct only the tax paid on the acquisition of goods and services used for the practice of activities that confer the right to deduction, as declared in the DP submitted on 2015-02-16.

Thus, it is no longer legitimate for the applicant's request to see the VAT credit recognized in the amount of €18,955.46, calculated in the context of the submission of the replacement DP for the fourth quarter of 2014, since it refers to a change in the method adopted for the deduction of tax on goods of mixed use and not merely a correction resulting from the provisional calculation carried out in accordance with Article 23 of the VAT Code. (…)

(…) proceeded to deduct VAT at the time of recording the invoices that support that right, in accordance with a choice made by it in accordance with the provisions of the law. Accordingly, it appears to us that we are faced with a situation of a claim for self-assessment, which results from a request to change the method adopted for the deduction of tax on goods of mixed use made on 2016-02-12 through the submission of an activity change declaration, submitted via the finance portal. (…) Having the complainant submitted the activity change declaration only on 2016-02-12, it will only be able to deduct VAT in accordance with what is requested through this complaint from the exercise of 2016."

The AT further defends:

• The lack of material and partial jurisdiction of the Arbitral Tribunal since it does not have jurisdiction to assess the alleged lack of reasoning in the decision to dismiss the gracious complaint, as that matter goes beyond its jurisdiction.

• The jurisdiction of arbitral tribunals is limited to the matters listed in Article 2, paragraph 1 of the RJAT.

• The alleged lack of reasoning invoked by the Claimant results in a defect inherent to the gracious complaint and not a defect of the first instance.

• In light of Article 2, paragraph 1 of the RJAT, the assessment of issues relating to defects inherent to acts of the second or third instance is excluded from the jurisdiction of tax arbitration under penalty of violation of the law.

• It is concluded, therefore, that the Claimant should have resorted to the appropriate procedural means to review the lack of reasoning in the gracious complaint and not to the present means – arbitration.

• Being in question the lack of material jurisdiction of the Arbitral Tribunal, the Respondent should be absolved of the instance since the dilatory exception prevents the knowledge of the merits of the case as provided for in Articles 576, paragraphs 1 and 2 and 577, letter a) of the Code of Civil Procedure (hereinafter, "CPC") applicable by virtue of Article 29, paragraph 1, letter e) of the RJAT.

• It follows from Article 18 of the arbitration request and from the claim presented by the Claimant "(…) that the decision to dismiss the gracious complaint No. ...2017... be declared illegal and, consequently, that the VAT credit of € 18,955.46 be recognized."

• Accordingly, in the arbitration request no assessment act relating to the year 2014 is identified; only the year in which the alleged illegality that is intended to be remedied is mentioned, intending that, in relation to that year, the right to deduction of tax be recognized, which, from the Claimant's perspective, was deducted by error due to its nature as a mixed taxpayer.

• Beyond not knowing the assessment act that is intended to be challenged, the defects that the Claimant concretely attributes are also unknown.

• Thus, the absence of a scannable object in arbitration equally prevents the knowledge of the merits of the case in accordance with Articles 576, paragraph 1 and 577, letter a) of the CPC applicable by virtue of Article 29, paragraph 1, letter e) of the RJAT.

• Nevertheless, the claim formulated would be inadmissible since the conviction of the Respondent to recognize the tax credit is outside the material scope of tax arbitration – recognition of a VAT credit of € 18,955.46.

• The RJAT does not contemplate the assessment of claims tending toward the recognition of rights in tax matters.

• This understanding results from Article 2, paragraph 1 of the RJAT, as well as from Article 124 of Law No. 3-B/2010, of 28 April (legislative authorization law), under which that regime was approved: "[t]he tax arbitration process must constitute an alternative procedural means to the judicial challenge process and to the action for recognition of a right or legitimate interest in tax matters."

• If the claim formulated were to be upheld, it should have been aimed at one or more assessment acts.

• Even if the Tribunal is not understood to be incompetent, it disputes what was alleged by the Claimant.

• The Claimant's claim consubstantiates a retroactive alteration or substitution of the choice of the actual allocation deduction method by reference to the year 2014.

• The mechanism of VAT deductions is provided for in Articles 19 to 26 of the VAT Code.

• As provided for in Article 19, for the calculation of the tax due (self-assessment), taxpayers deduct from the tax levied on taxable operations carried out in a given period, the tax charged to them in the acquisition of goods and services from other taxpayers, mentioned in invoices or equivalent documents issued in legal form, in the same period, a situation that should be reflected in the periodic declaration referred to in Article 29, paragraph 1, letter c) of the VAT Code.

• The additional VAT deduction resulted from the application of the pro rata deduction percentage criterion regarding mixed-use inputs and others allocated entirely to the performance of operations subject to tax, determined in accordance with Article 23, paragraph 4 of the VAT Code.

• Article 23 of the VAT Code provides that:

"Article 23
Deduction methods relating to goods of mixed use

1 – When the taxpayer, in the exercise of its activity, carries out operations that confer the right to deduction and operations that do not confer this right, in accordance with Article 20, the deduction of tax paid on the acquisition of goods and services that are used in carrying out both types of operations is determined as follows:

• Where it is a good or service partially allocated to the performance of operations not arising from the exercise of an economic activity provided for in letter a) of paragraph 1 of Article 2, the non-deductible tax as a result of that partial allocation is determined in accordance with paragraph 2;

• Without prejudice to the provision of the previous subparagraph, where it is a good or service allocated to the performance of operations arising from the exercise of an economic activity provided for in letter a) of paragraph 1 of Article 2, part of which does not confer the right to deduction, the tax is deductible in the percentage corresponding to the amount of annual operations giving rise to deduction.

(…)

6 – The deduction percentage referred to in letter b) of paragraph 1, calculated provisionally on the basis of the amount of operations carried out in the previous year, as well as the deduction made in accordance with paragraph 2, calculated provisionally on the basis of the objective criteria initially used for application of the actual allocation method, are corrected according to the definitive values relating to the year to which they refer, giving rise to the corresponding regularization of the deductions made, which must appear in the declaration of the last period of the year to which it refers."

• Regularization can only be carried out on the basis of this rule and not under any other.

• The deduction sought by the Claimant should have been made monthly or quarterly on the basis of a provisional pro rata, to be regularized in the periodic declaration of December of each year.

• The change in the method of deduction of tax and the retroactive application of a deduction method have no legal support; the choice of the deduction method can only be made at the time the right to deduction is established in accordance with Articles 20, paragraph 1, 22, paragraph 1 and 23 of the VAT Code.

• Regarding the applicability of the four-year period to proceed with the correction of VAT assessed in excess, it is important to refer to Article 98, paragraph 1 of the VAT Code in which it is established that "when tax superior to what is due has been assessed for reasons attributable to the services, official revision proceeds in accordance with Article 78 of the General Tax Law."

• In Article 98, paragraph 2, it is provided that "[w]ithout prejudice to special provisions, the right to deduction or reimbursement of tax paid in excess can only be exercised up to the expiration of four years after the birth of the right to deduction or payment in excess of tax, respectively."

• Not only did the Claimant not submit any request for official revision, but the possibility of recourse to this procedure does not prejudice the specifics inherent to the functioning of VAT.

• Although the rule establishes that the right to deduction can be exercised up to the limit of four years, the VAT taxpayer does not have freedom to determine the time of exercise of that right, with that rule limiting itself to establish only a general maximum limit beyond which the right can no longer be exercised.

• The Claimant intends that it be recognized retroactively the possibility of modifying the deduction method used in the capacity of a mixed taxpayer.

• Furthermore, Article 98 above referred to implies that there be an error attributable to the services; however, the Claimant does not invoke or demonstrate the existence of an error.

• The Claimant also does not demonstrate to which acquisitions of goods or services it refers nor which tax paid was not covered by the application of the actual allocation method in the calculation made in the course of the inspection action, that is, which tax was not deducted "correctly" as it alleges.

• The Claimant cannot exempt itself from the application of Article 23 of the VAT Code by invoking the provisions of Article 98 of the same Code.

• Since one of the methods provided for in Article 23 of the VAT Code was adopted, the Claimant should have demonstrated the extent to which it made an error or in what respect lies the incorrectness of its application.

• Regarding the factuality exposed, the Claimant did not attach copies of the invoices issued in the periods in question.

• Article 74, paragraph 1 of the LGT determines that "[t]he burden of proof of the facts constitutive of the rights of the tax administration or of the taxpayers falls on whoever invokes them." (in the same sense, Article 342 of the Civil Code points out).

• Indeed, it is not enough for the Claimant to allege; it must concretely demonstrate that VAT was assessed in excess in the period in question and in accordance with Article 52 of the VAT Code, taxpayers must keep all documents supporting the accounting for a period of ten years – the Municipality at no time presented a copy of the invoices – therefore the failure to meet this burden is the Claimant's fault.

MATTER OF FACT

A.1. Facts Accepted as Proven

• The Claimant is a legal entity of public law under the normal scheme with quarterly periodicity for VAT purposes, with the main activity of "Local Administration" – CAE 084113.

• In the scope of its activity, the Claimant performs operations subject to VAT, operations not subject to VAT and operations exempt from tax.

• Accordingly, it performs operations that do not confer the right to deduct VAT by virtue of being performed within the scope of its authority powers and others that, not being covered by those powers, confer the right to deduction.

• The Respondent submitted its VAT declaration for the 4th quarter of 2014 (DP No. ...) on 16 February 2015.

• The Claimant was subject to several tax inspections.

• The Claimant opted for the actual allocation method of deduction.

• The Claimant submitted, on 4 October 2016, a replacement periodic declaration for the 4th quarter of 2014, calculating a VAT credit in the amount of €18,955.46.

• The Claimant submitted, on 31 January 2017, a request addressed to the Finance Director of ..., with a view to confirming the value of the credit existing in favor of the Municipality.

• The said request was converted into a gracious complaint by the Finance Directorate of ... .

• The Finance Directorate of ... decided to dismiss expressly the claim contained in the gracious complaint.

A.2. Facts Accepted as Not Proven

No facts relevant to the decision have been left unprovided.

A.3. Reasoning of the Matter of Fact Proven and Not Proven

Regarding the matter of fact, the Tribunal does not have to pronounce itself on everything alleged by the parties; rather, it has the duty to select the facts that matter for the decision and to distinguish proven facts from unproven facts (see Article 123, paragraph 2, of the Code of Tax Procedure and Process, henceforth "CPPT", and Article 607, paragraph 3 of the CPC, applicable ex vi Article 29, paragraph 1, letters a) and e), of the RJAT).

Accordingly, the facts relevant to the judgment of the case are chosen and delineated based on their legal relevance, which is established in attention to the various plausible solutions of questions of law (see Article 596 of the CPC, applicable ex vi Article 29, paragraph 1, letter e), of the RJAT).

Thus, taking into account the positions assumed by the parties, in light of Article 110, paragraph 7 of the CPPT, the documentary evidence and the administrative process attached to the proceedings, the facts listed above were considered proven with relevance to the decision.

No allegations made by the parties and presented as facts were taken as either proven or not proven, consisting of strictly conclusive statements, not susceptible to proof and whose truth is to be assessed in relation to the specific matter of fact above established.

ON THE LAW

A.1 Preliminary Matter: Exception of Jurisdiction of the Arbitral Tribunal

According to the provisions of Article 608 of the CPC in force, applicable by virtue of the provisions of Article 29 of the RJAT, "(…) the judgment first knows of the procedural matters that may determine the absolution of the instance, according to the order imposed by their logical precedence," and the judge must "resolve all matters that the parties have submitted for its appreciation, except those whose decision is prejudiced by the solution given to others (…)".

In these terms, it becomes necessary to assess and decide previously, in the present arbitral process, the preliminary exception matters, beginning with those relating to the jurisdiction of the Tribunal, as prescribed by Article 13 of the Code of Procedure in Administrative Courts.

A.2. On the Jurisdiction of the Tribunal to Decide on the Lack of Reasoning of the Gracious Complaint Decision

In this regard, it is important to begin by noting that the Claimant clarified in its allegations that it did not request this Tribunal to rule on the lack of reasoning by the AT in the context of the gracious complaint decision.

In this context, given that the lack of need for a pronouncement on this point is clarified, in light of what was invoked by the Claimant, it will not be necessary to address this Tribunal's jurisdiction regarding the possibility of taking knowledge of that issue.

A.3. On the Deficient Identification of the Object of the Request for Arbitral Pronouncement: Annulment of the Decision to Dismiss the Gracious Complaint

Pursuant to the provisions of Article 2, paragraph 1 of the RJAT: "1 – The jurisdiction of arbitral tribunals comprises the assessment of the following claims:

a) the declaration of illegality of acts of assessment of taxes, of self-assessment, of withholding at source and of payment on account;" (emphasis and underline ours).

In the claim formulated by the Claimant it is stated that "[i]n these terms, and in the remaining matters of Law that Your Excellence will learnedly supply, this Illustrious Arbitral Tribunal should annul the decision to dismiss the Gracious Complaint No. ...2017..., and, consequently, condemn the Tax and Customs Authority to recognize the VAT credit of € 18,955.46 in favor of the Municipality, as well as to pay indemnificatory interest due to the Municipality of ... ."

Indeed, in the claim, no reference is made to a self-assessment of VAT or to its illegality.

However, notwithstanding the Claimant not having expressly indicated in its claim that it intends to see a self-assessment of VAT annulled, this claim still appears to result from other elements brought into the proceedings.

By way of example, in Articles 10 and 11 of the arbitration request, references are made to the submission of a replacement periodic declaration, and in Articles 5 and following the limitation of the right to deduct VAT incurred on the acquisition of common resources, as well as on resources allocated entirely to the performance of operations subject to tax in the 4th quarter of 2014, is described.

On the other hand, there are also relevant elements for the present analysis in the administrative phase that preceded the submission of the arbitration request, which not only allow for a framing of the object of the present action but also explain, in part, some of the issues raised regarding the claim.

Naturally, since the Claimant originally submitted merely a Request and did not formally submit a Gracious Complaint, the configuration of Gracious Complaint resulting from an act of conversion by the AT, the petition does not appear as clear regarding its object as would be expected in a defense initially configured as a Gracious Complaint.

The treatment of the Request submitted by the Claimant as a Gracious Complaint made, however, unnecessary (at least apparently) the submission of a more robust defense with the guise of a Gracious Complaint, which, in principle, would make clearer the claimant's intention to react against the alleged illegality of the self-assessment (having in view the provisions of Articles 70 and 99 of the CPPT) and would bring greater context to this arbitral phase.

Furthermore, the treatment of the Request – which initially was intended to confirm the value of a VAT credit – as a Gracious Complaint, likewise makes it more difficult to determine which defects, in concrete, are attributed to the self-assessment (as we shall develop below),

Since these were not particularly developed in that (administrative) phase and, in light of the argument used by the AT to dismiss the Complaint, it became unnecessary to proceed, likewise, to their detailed development in the arbitration request.

However, it is repeated, it was the fact that the AT considered that the Request submitted by the Claimant was, or should be treated as, a Gracious Complaint, that ended up making the submission of a new (more developed) defense for challenging the VAT self-assessment for the 4th quarter of 2014 unnecessary.

It is not disputed that the Request submitted is particularly "lean" with regard to the identification of the act attacked, as well as in the invocation of the defects pointed out to the self-assessment; in any event, the AT does not appear to have had doubts regarding the object of the "Complaint" and did not consider that there were missing elements for its decision.

Indeed, it is the AT itself that accepts that the object of the Gracious Complaint is the VAT self-assessment.

In the decision of the Gracious Complaint, the object is identified as "VAT Self-assessment DP No. ..., submitted on 2015-02-16, in the amount of €124,078.07 in favor of the claimant, relating to the period of 2014 4Q." (cf. section II.2 "Object" of the express dismissal decision of the gracious complaint).

Furthermore, in the decision of the Gracious Complaint, the AT states that: "it appears to us that we are faced with a situation of a claim for self-assessment, which results from a request to change the method adopted for the deduction of tax on goods of mixed use, made on 2016-02-12 through the submission of an activity change declaration, submitted via the finance portal." (cf. section 4 of the "INFORMATION" of the express dismissal decision of the gracious complaint).

Now, the object of the Gracious Complaint – which is assumed as the immediate object of the present arbitration request – being the discussion of the legality of the VAT self-assessment for the 4th quarter of 2014, that self-assessment will also be the mediated object of the present arbitration request.

Notwithstanding the admission that the Claimant could have formulated its claim more perfectly, we understand that the principles "pro actione" and "in dubio pro favoritate instanciae" prevail.

This Tribunal thus understands that the necessity of safeguarding the guarantees of taxpayers must prevail over formal imperfections, provided it is possible to understand the object and the grounds of the arbitration request and that such request falls within the jurisdiction of this Tribunal.

Notwithstanding the Claimant, through the present arbitration request, reacting against the act of dismissal of the gracious complaint (immediately), this claim resulting from the request of the arbitration request, it appears clear to this Tribunal that the mediate object is the VAT self-assessment,

Which still falls within the scope of this Tribunal's jurisdiction.

In this sense, Carla Castelo Trindade argues that "[t]he object of the request for arbitral pronouncement will therefore be the (il)legality of the first-instance tax act, regardless of whether the taxpayer points as the object of its arbitral action to this (the first-instance act) or to that of the second, this always, provided the second assesses the (il)legality of the first-instance act. It is also considered that even if the taxpayer in the object of the arbitral action or in the request incorrectly indicates the second act instead of the first, it is the responsibility of the tribunal to correct itself of this incorrectness, in particular by imposition of the principle of procedural good faith and cooperation referred to in Article 16 letter f)." (Carla Castelo Trindade, Legal Framework for Tax Arbitration. Annotated, Coimbra: Almedina, 2016, p. 71) (emphasis and underline ours).

Also, the Supreme Administrative Tribunal in process No. 0156/11, of 18/05/2011, argued that "the real object of the challenge is the assessment act and not the act that decided the complaint, so it is the defects of that one and not of this order that are truly at issue. As stated, among others, in this STA judgment of 28/10/2009, handed down in the appeal No. 595/09, 'in cases where the gracious complaint is expressly dismissed, the object of the judicial challenge process is, formally and directly, the act of dismissal, which maintained the assessment that was the subject of the complaint, but the real object of the challenge, the act whose legality is to be determined, is the assessment act that was maintained by the act of dismissal of the complaint'. The challenge is thus not limited by the grounds invoked in the gracious complaint and may have as its basis any illegality of the tax act." (available at www.dgsi.pt).

Accordingly, the object and request of the arbitration request is, first and foremost, the (il)legality of the self-assessment act.

In sum, notwithstanding the Claimant requesting the annulment of the decision to dismiss the Gracious Complaint No. ...2017..., taking into account the documentation and reasoning brought into the proceedings, this Tribunal understands it to be clear that the Claimant also petitions the annulment of the VAT self-assessment for the 4th quarter of 2014.

Having said that, this Tribunal decides on the inadmissibility of the dilatory exception of lack of jurisdiction of the arbitral tribunal raised by the Respondent.

A.4. On the Request for Recognition of a VAT Credit

As for the request for recognition of a VAT credit, the AT raised the exception of lack of jurisdiction of the arbitral tribunal on the grounds that this matter is not covered within the scope of jurisdiction of this Tribunal.

In any case, as decided in section A.3. above, this Tribunal considers that, from the documentation and reasoning brought into the proceedings, it is clear that the Claimant petitions the annulment of the VAT self-assessment for the 4th quarter of 2014.

Furthermore, the Claimant itself, in its allegations, clarifies that the claim formulated in the initial petition was the declaration of illegality of the decision to dismiss the gracious complaint in which the VAT declaration for the period 2014/12T was analyzed and not the recognition of a right.

Thus, it will not be necessary to address this Tribunal's jurisdiction regarding the possibility of taking knowledge of this issue, since, having clarified the Claimant's claim, this Tribunal is not requested to analyze this point.

B. On the Merits

B.1. On the Application of Article 98 of the VAT Code

Pursuant to Article 19, paragraph 1 of the VAT Code "[f]or the calculation of the tax due, taxpayers deduct, in accordance with the following articles, from the tax levied on the taxable operations they carried out:

a) the tax due or paid for the acquisition of goods and services from other taxpayers;

b) the tax due for the importation of goods;

c) the tax paid for acquisitions of goods or services covered by letters e), h), i), j) and l) of paragraph 1 of Article 2;

d) the tax paid as the recipient of taxable operations carried out by taxpayers established abroad, when these do not have a legally accredited representative in the national territory and have not invoiced the tax;

e) the tax paid by the taxpayer at the departure of goods from a non-customs warehousing regime, in accordance with paragraph 6 of Article 15."

Indeed, taxpayers generally enjoy the faculty of deducting all the VAT paid on acquisitions of goods and provision of services relating to the taxable operations they carried out,

VAT deduction being one of the basic principles of VAT.

With regard to mixed taxpayers, these are entitled to partial deduction of VAT through either the actual allocation method or the pro rata method.

What is at issue in the present proceedings is, in part, the admissibility of changing the initially chosen deduction method, with retroactive effects and the possibility of deducting VAT for previous periods.

Now, beginning with Article 78, paragraph 6 of the VAT Code, this rule provides that: "[t]he correction of material or calculation errors in the recording referred to in Articles 44 to 51 and 65, in the declarations mentioned in Article 41 and in the guides or declarations mentioned in letters b) and c) of paragraph 1 of Article 67 is facultative when it results in tax in favor of the taxpayer, but can only be made within two years, which, in the case of the exercise of the right to deduction, is counted from the birth of the respective right in accordance with paragraph 1 of Article 22, being mandatory when it results in tax in favor of the State." (emphasis and underline ours).

In this regard, we have already had the opportunity to argue, in an article signed jointly with Serena Cabrita Neto and Priscila Santos, that it should "be understood that the provision of the aforementioned Article 78, paragraph 6 of the VAT Code applies only in situations where there are mere material or calculation errors, that is, mere errors of writing or transcription of values, as well as arithmetic errors in the calculation of the amounts of tax or the operations that were their basis." (Serena Cabrita Neto, Leonardo Marques dos Santos and Priscila Santos, The Regularization of VAT in Case of Error in the Calculation of the pro rata: Procedural Issues, VAT Notebooks 2015, Coimbra: Almedina, pp. 370) (emphasis and underline ours).

However, pursuant to the provisions of Article 98, paragraph 2 of the VAT Code "[w]ithout prejudice to special provisions, the right to deduction or reimbursement of the tax paid in excess can only be exercised up to the expiration of four years after the birth of the right to deduction or payment in excess of tax, respectively." (emphasis and underline ours).

Unlike what is provided in Article 78, paragraph 6 of the VAT Code, the error of law provided for in Article 98, paragraph 2 of the VAT Code results from an error of classification on the part of the taxpayer that makes an incorrect interpretation of the factual situation and, consequently, an incorrect subsumption of the facts to the law, leading to a deduction of less tax paid.

In the sense that Article 98, paragraph 2 of the VAT Code refers to an error of law, we have also already had the opportunity to argue that "[t]he distinction between the application of the mechanism of Article 78, paragraph 6 of the VAT Code and Article 98, paragraphs 1 and 2 of the same Code resides in the very qualification of the underlying error: in the first mechanism we are facing the correction of a mere error in the declaration, whereas in the second we are facing a true error-defect (of will of the taxpayers). And, while in error in the declaration there is a mere divergence between real will and declared will (aliud dizit, aliud voluit), in error-defect or error-reason there is a true error in the formation of will resulting from the false representation of reality or from ignorance of circumstances of fact or of law that intervened in the reasons of the declaration, with reflexes, naturally, in the imperfection of the declared will." (Serena Cabrita Neto, Leonardo Marques dos Santos and Priscila Santos, The Regularization of VAT in Case of Error in the Calculation of the pro rata: Procedural Issues, VAT Notebooks 2015, Coimbra: Almedina, pp. 371) (emphasis and underline ours).

Accordingly, whenever there occurs an error of classification or of law, taxpayers can have recourse to the aforementioned Article 98, paragraph 2 of the VAT Code within the general and supplementary period of four years.

In this sense, also in the judgment of the Supreme Administrative Tribunal handed down in process No. 01427/14, of 28/06/2017, it is stated that "[t]he applicable time period for claiming VAT paid in excess in a situation that can be classified as an error of law is four years, in accordance with the provisions of Article 98, paragraph 2 of the VAT Code." (available at www.dgsi.pt).

Also in this sense, see the CAAD judgment handed down in process No. 489/2017-T, of 01/02/2018, in everything similar to the case sub judice: "[g]iven the wording given to paragraph 6 of Article 78 of the VAT Code, we consider this latter to be the position that appears correct, for we also understand that the legislator had here in view, solely and only, the lapsus calami in the transposition of the elements of the invoices to the accounting and from this to the periodic declarations. In the same sense, Afonso Arnaldo and Tiago Albuquerque Dias ("After All What Is the Period for Deducting VAT? Statute of Limitations Rules and (In)Security of Law", in AA.VV., Coordination by Sérgio Vasques, VAT Notebooks 2014, Coimbra, Almedina, 2014, p. 44) state that 'the errors to which paragraph 6 of Article 78 of the VAT Code refers are reconducted to situations in which the taxpayer is mistaken in the materialization of the deduction or assessment act, namely, by lapse in the transcription of values or for arithmetic reasons, i.e., in both situations minor and evident errors. Accordingly, they will be covered by these concepts of error (typically) the situations in which the taxpayer is mistaken in carrying out an arithmetic operation, in particular, when it seeks to determine the deductible tax contained in an invoice (with VAT included) of services from a supplier (calculation error), or, even if correctly making the calculation, makes a lapse in entering the amount of tax to be deducted in the periodic declaration (material error).' Whenever the occurrence of material or calculation errors results in a regularization of tax in favor of taxpayers, they can promote it within two years from the moment the tax became due, as prescribed by paragraph 6 of Article 78 of the VAT Code. Having said this, let us now enter into the analysis of the aforementioned third group of situations, referring to classification errors or errors of law. In this respect, it will be useful to begin by defining what should be understood by factual error so that, in view of this, we can delimit the concept of error of law. Thus, we consider that errors of fact are covered by 'situations in which the taxpayer makes an incorrect representation of factual reality (which determines its subsumption to an incorrect rule)' (Afonso Arnaldo and Tiago Albuquerque Dias, loc. cit., pp. 45-46), and that 'the error of fact that does not give rise to a consequent error of law, will have no relevance for these purposes, since it will have no influence on the quantum of tax to be deducted or assessed' (idem, ibidem). By way of contrast, the error of law occurs in 'situations in which, despite the correct representation of factual reality, the taxpayer is mistaken in determining the applicable rule' (idem, ibidem), that is, in which there is an error of classification, because the taxpayer has made an incorrect interpretation of the factual situation or an incorrect application of the law and, consequently, assesses or deducts tax more or less. As classifiable as errors of law, we have, by way of example, 'situations in which there is an incorrect calculation of the pro rata, motivated by an inaccurate subsumption in the applicable regulation of the operations that influence the calculation, in particular, regarding the classification of an operation as taxed when it is exempt' (idem, ibidem), as well as those situations 'in which the taxpayer, developing various activities, effects deduction by recourse to the pro rata in a first moment and goes on to use the actual allocation method to effect the deduction of tax exclusively allocated to a certain activity, intending to correct the deduction it made in the past based on the pro rata method.' (idem, ibidem)." (available at https://caad.org.pt/tributario/decisoes/decisao.php?listPageSize=100&listPage=32&id=3293) (emphasis and underline ours).

Also regarding the application of Article 98, see the CAAD judgment handed down in process No. 117/2013-T, of 17/05/2013: "[w]hat is at issue in the proceedings is the exercise of the right to VAT deduction, motivated by lapses of the Respondent, as was established as proven in letters f) and g) of the matter of fact fixed, which resulted in the 'use of a deduction percentage lower than that due, with reference to the tax incurred in mixed-use resources' and 'the actual allocation method not having been applied with regard to the tax incurred in expenses that were re-debited by the Respondent to its shareholders, with VAT assessment' (as the Respondent itself summarized in Article 27 of the official revision request). Article 98 of the VAT Code provides for the general regime for official revision and exercise of the right to VAT deduction, establishing that 'without prejudice to special provisions, the right to deduction or reimbursement of tax paid in excess can only be exercised up to the expiration of four years after the birth of the right to deduction or payment in excess of tax, respectively'. However, the aforementioned Article 78, paragraph 6, of the VAT Code establishes that 'the correction of material or calculation errors in the recording referred to in Articles 44 to 51 and 65, in the declarations mentioned in Article 41 and in the guides or declarations mentioned in letters b) and c) of paragraph 1 of Article 67 is facultative when it results in tax in favor of the taxpayer, but can only be made within two years, which, in the case of the exercise of the right to deduction, is counted from the birth of the respective right in accordance with paragraph 1 of Article 22, being mandatory when it results in tax in favor of the State'. Thus, this Article 78, paragraph 6, by providing a two-year time period counted from the birth of the right to deduction, for the exercise of the respective right, in the situations provided for there, will be one of the 'special provisions' to which the initial part of Article 98, paragraph 2, of the VAT Code refers, in which the maximum four-year time period after the birth of the right to deduction is not applicable, but rather two years. Therefore, the legality of the act of dismissal of the official revision request depends on the possibility of framing the situation of the proceedings in this Article 78, paragraph 6. As results from the literal wording of that paragraph 6 of Article 78 of the VAT Code, it is applicable only to the 'correction of material or calculation errors', including in periodic declarations. The Respondent states that, in the case at hand, the errors it committed were not material or calculation errors, but rather errors of law regarding the application of the VAT deduction regime, by 'use of a deduction percentage lower than that due, with reference to the tax incurred in mixed-use resources' and 'the actual allocation method not having been applied with regard to the tax incurred in expenses that were re-debited by the Respondent to its shareholders, with VAT assessment'. Article 95-A, paragraph 2 provides a concept of 'material or manifest errors' indicating that it integrates, 'in particular those resulting from the anomalous operation of the tax administration's computer systems, as well as unequivocal situations of calculation error, writing error, inaccuracy or lapse'. The association of the calculation error to the material error that is made in this paragraph 6 of Article 78 of the VAT Code, similar to what occurs in other rules (such as Article 249 of the Civil Code, Article 667 of the 1961 CPC and Article 614 of the 2013 CPC) reveals that the calculation errors to which it is intended to refer will be of this type, in particular arithmetic errors in the operations of calculating the amount to be deducted. Thus, one is faced with a material error in the filling of the amount of deductible VAT in a declaration when one intended to write a certain amount and, through carelessness or lapse, ended up writing a different amount or when the error in filling out the declaration results from an earlier error of the same type that exists in the accounting or in some document that serves as the basis for the exercise of the right to deduction. One is faced with a calculation error when the arithmetic operations to determine the amount of deductible VAT were incorrectly carried out, in the declaration itself or in some of the documents on which it was based. The error regarding the application of certain legal regimes does not constitute either a material or calculation error, so it is manifest that it cannot be subject to the regime of the aforementioned paragraph 6 of Article 78 of the VAT Code. In particular, the calculation error of the pro rata is not a calculation error classifiable under this rule because it consubstantiates an error of law on the applicable legal regime and not an error of an arithmetic nature. Accordingly, being the regime of the aforementioned Article 78, paragraph 6, not applicable, nor any other regime with a special time limit existing for the exercise of the right to deduction based on an error of law, the general regime on this matter contained in Article 98, paragraph 2, of the VAT Code shall apply, which, as stated in the judgment of the Supreme Administrative Tribunal of 18-5-2011, handed down in process No. 966/10, sets a maximum limit of four years that cannot be exceeded in any case." (emphasis and underline ours).

In the case sub judice, the Claimant considers it has incorrectly applied the deduction methods governed in Article 23 of the VAT Code.

From the errors allegedly committed resulted a deduction of VAT lower than that to which the taxpayer would have been entitled.

As stated, we consider that Article 78, paragraph 6 of the VAT Code does not apply in these cases, nor any other rule that establishes a special time period, so it will be possible to resort to the aforementioned general and supplementary time period of four years, provided in Article 98 of the VAT Code,

The Claimant being able to change the deduction method and deduct the VAT paid in excess within the time period effected.

B.2. Regarding the Illegality of the VAT Self-Assessment Act

The Respondent further invokes, in sum, that it does not know the defects that the Claimant concretely attributes, there being no scannable object in arbitration, and it further states that Article 98 of the VAT Code, referred to above, implies that there be an error attributable to the services, an error that is not invoked or demonstrated by the Claimant.

The Respondent further invokes that the Claimant does not identify to which acquisitions of goods or services it refers, nor which tax paid was not covered by the application of the actual allocation method in the calculation made in the course of the inspection action, that is, which tax was not deducted "correctly".

Now, with due respect, the argument of the Respondent cannot be followed.

Indeed, as follows from the Decision of the Gracious Complaint No. ...2017..., the Gracious Complaint is the proper means to react against any illegality (cf. section II. 6 of the Decision of the Gracious Complaint).

In the context of the analysis developed within the framework of the gracious complaint decision, the AT, in fixing the matter of fact, begins by recognizing that the Respondent is a mixed taxpayer who requested the change of the deduction method to the partial actual allocation method and who submitted a replacement declaration for the 4th quarter of 2014, having come to the conclusion that it would benefit from a deduction superior to that which had been made according to the method by which it had opted before (cf. sections III.1. to III.5. of the INFORMATION relating to the Gracious Complaint).

That is, the AT, recognizing that: (i) the Gracious Complaint is the appropriate means to discuss the (il)legality of the VAT self-assessment, (ii) knowing what was underlying the submission of the replacement declaration and, consequently, (iii) that the Respondent intended to see analyzed the (il)legality of the VAT self-assessment for the 4th quarter of 2014, having come to the conclusion that it would benefit from a deduction superior to that which had been made according to the method by which it had opted, being able, moreover, to access all documentation that would allow it to confirm the suitability of the deduction made, said nothing regarding what was alleged by the Municipality in the sense of having borne VAT in excess during the year 2014.

Note that the AT begins precisely by analyzing the cases in which VAT can be deductible and the deduction methods relating to mixed-use goods (cf. sections 1. to 3. of the INFORMATION relating to the Gracious Complaint),

So that the possibility of VAT in excess being able to be deducted or not was not forgotten by the AT.

In any event, the only objection raised by the AT with respect to the Respondent's claim concerned the illegitimacy of seeing the VAT credit recognized taking into account the time at which this manifested the intention to change the deduction method.

The AT states, moreover, that the "omission of deduction of tax paid with common costs does not constitute an error, but rather a legitimate option or practice common among mixed taxpayers, to whom the right is due under the autonomy of action of economic operators (even if they are entities of public law), to choose not to deduct the tax paid with common costs, a right that the AT cannot call into question, replacing the taxpayer. The claimant defined as a criterion to use the actual allocation method of all goods that allows it to deduct the tax paid on acquisitions of goods and services, by assigning to each activity sector, now being able to deduct only the tax paid on the acquisition of goods and services used for the practice of activities that confer the right to deduction, as declared in the DP submitted on 2015-02-16." (cf. section IV.5. of the INFORMATION relating to the Gracious Complaint).

That is, the AT presented no observation regarding the possibility of recovery of VAT from the material point of view, sustaining its dismissal solely on the moment from which that right can be exercised and on the date of production of effects of the respective option.

It follows from the Decision of the Gracious Complaint that "[h]aving the claimant submitted the activity change declaration only on 2016-02-12, it will only be able to deduct VAT in accordance with what is requested through this complaint from the exercise of 2016." (cf. section 5 of the INFORMATION relating to the Gracious Complaint).

In other words, the dismissal of the Gracious Complaint was based solely on an argument that, as results from the exposition above, this Tribunal does not consider meritorious.

Accordingly, the act of dismissal of the aforementioned Gracious Complaint is defective with a violation of law, due to error regarding the presuppositions of law, consisting of the incorrect interpretation of Article 98, paragraph 2, in conjunction with Articles 22, paragraph 2, 23, paragraph 6, and 78, paragraph 6, all of the VAT Code,

The VAT self-assessment DP No. ..., submitted on 2015-02-16, being to be annulled, with the due legal consequences.

C. On Indemnificatory Interest

According to the provisions of Article 24, letter b) of the RJAT, the arbitral decision on the merits of the claim for which there is no possibility of judicial appeal or challenge binds the AT from the end of the period provided for appeal or challenge.

This interpretation is consistent with Article 100 of the LGT ex vi Article 29, paragraph 1, letter a) of the RJAT which establishes: "the tax administration is obliged, in case of total or partial success of a complaint, judicial challenge or appeal in favor of the taxpayer, to immediately and fully restore the legality of the act or situation subject to the dispute, comprising the payment of indemnificatory interest, if applicable, from the end of the period of execution of the decision".

Although Article 2, paragraph 1 of the RJAT makes reference only to "declaration of illegality" of assessment acts, it should be understood that the jurisdiction of arbitral tribunals also encompasses condemnatory decisions.

The judicial challenge process, despite being essentially an annulment process for tax acts, admits the condemnation of the AT to payment of indemnificatory interest, as results from Article 43, paragraph 1, of the LGT in which "indemnificatory interest is due when it is determined, in a gracious complaint or judicial challenge, that there was an error attributable to the services from which results payment of the tax debt in an amount superior to that legally due" and from Article 61, paragraph 4 of the CPPT which "[i]f the decision that recognized the right to indemnificatory interest is judicial, the period of payment is counted from the beginning of the period of its spontaneous execution".

The recognition of the right to indemnificatory interest in arbitral decisions results from Article 24, paragraph 5 of the RJAT from which it follows that "payment of interest is due, regardless of its nature, in the terms provided for in the general tax law and in the Code of Tax Procedure and Process".

In the case sub judice, occurring the annulment of the assessment act, there is grounds for reimbursement of the tax paid, by application of Articles 24, paragraph 1, letter b) of the RJAT and 100 of the LGT, in order to "restore the situation that would have existed if the tax act subject to the arbitral decision had not been performed".

Furthermore, Article 43, paragraphs 1 and 2 of the LGT establishes that "indemnificatory interest is due when it is determined, in a gracious complaint or judicial challenge, that there was an error attributable to the services from which results payment of the tax debt in an amount superior to that legally due".

In sum, the Respondent has the right to indemnificatory interest, at the legal supplementary rate, counted until full reimbursement, in accordance with Articles 43, paragraphs 1 and 4, and 35, paragraph 10, of the LGT, 61, paragraphs 2, 3, 4 and 5 of the CPPT, and Article 559 of the Civil Code and Order No. 291/2003, of 8 April, which sets at 4% the rate of legal interest.

DECISION

Accordingly, this Arbitral Tribunal decides:

• To judge as inadmissible the dilatory exception of lack of jurisdiction of the tribunal as to the absence of a scannable object in arbitration, due to the lack of a concrete assessment act;

• To judge as meritorious the claim for annulment of the Dismissal of the Gracious Complaint No. ...2017... and declaration of illegality of the VAT self-assessment DP No. ..., submitted on 2015-02-16, relating to the 4th quarter of the exercise of 2014, with the due legal effects, to the extent it does not recognize the deduction of €18,955.46, in conformity with the replacement VAT periodic declaration No. ..., submitted on 2016-10-04.

• To judge as meritorious the claim for condemnation of the Respondent to payment of indemnificatory interest, in accordance with the law;

• To condemn the Respondent to bear the costs of the process in the amount fixed below.

VALUE OF THE PROCEEDINGS

The value of the proceedings is fixed at € 18,955.46, in accordance with Article 97-A, of the CPPT, applicable by virtue of letters 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.

COSTS

The value of the arbitration fee is fixed at € 1,224.00 in accordance with Table I of the Regulation of Costs in Tax Arbitration Proceedings, to be paid by the Respondent, since the claim was meritorious, in accordance with Articles 12, paragraph 2, and 22, paragraph 4, both of the RJAT, and Article 4, paragraph 4, of the said Regulation.

Let notice be given.

Lisbon, 17 July 2019

The Arbitrator,

(Leonardo Marques dos Santos)