IRC Taxable Profit Concept Under Article 62(5) – Challengeability After Prior Annulments (283/2015-T)

ARBITRAL DECISION

I – Report

1. On 4 May 2015, the Claimant, Banco...A, S.A., a company with registered office at Rua..., no...., in ..., with the single registration number and corporate person identification number..., which is within the geographical competence area of the Finance Service of... – ..., requested the CAAD to establish an arbitral tribunal, in accordance with Article 10 of Decree-Law No. 10/2011, of 20 January (Legal Regime for Arbitration in Tax Matters, hereinafter referred to only as LRAT), wherein the Tax and Customs Authority is the Defendant, with a view to declaring the illegality and partial annulment, in the amount of €39,917.40, of the tax act consisting of the additional Corporate Income Tax (IRC) assessment No. 2013..., of 4 February 2013, concerning the financial year 1998.

The Claimant further petitions for the restitution of the tax that it considers to have been unduly paid in the amount of €39,917.40, plus compensatory interest.

1. The request for constitution of the arbitral tribunal was accepted by His Excellency the President of the CAAD and notified to the Tax and Customs Authority.

In accordance with and for the purposes of the provisions of no. 1 of Article 6 of the LRAT, by decision of the Chairman of the Deontological Council, duly communicated to the parties within the legally applicable periods, the undersigned was appointed as arbitrator, and communicated to the Deontological Council and the Administrative Arbitration Centre the acceptance of the appointment within the regularly applicable period.

The Arbitral Tribunal was constituted on 20 July 2015.

1. Verifying that there was no situation provided for in Article 18, no. 1, of the LRAT that would make the arbitral meeting provided therein necessary, it was dispensed with on the grounds of the prohibition of useless acts.

2. The grounds presented by the Claimant in support of its claim were, in summary, as follows:

The Claimant was notified of the tax act consisting of the Corporate Income Tax assessment No. 2013..., of 4 February 2013 and in the statement of accounts reconciliation No. 2013..., of 4 April 2013, concerning the financial year 1998.

As a result of the reversals and offsets made by the tax administration in the statement of accounts reconciliation, the said tax act determined an amount allegedly lacking of €315,241.03.

The Claimant filed a claim for reconsideration against the same, having invoked, as grounds, among others, that the tax losses to be carried forward in the financial year 1998 amount to the total sum of €7,701,451.96, instead of the amount of €7,584,047.85 determined by the tax administration, for which reason the annulment of the taxable base by the amount of €117,404.11 is necessary.

In truth, as extracted from the summary table of the loss carryforward subject to analysis and validation by those services, the amount of tax losses carryforward for the financial year 1998 amounts, precisely, to the value of €7,701,452.13.

On 10 March 2014, the present Claimant was notified of the decision on the claim for reconsideration sub judice, within the scope of which the tax administration determined the maintenance of the tax act then challenged, in the part wherein the requested deduction of tax losses was disregarded.

Not being satisfied with this decision, on 9 April 2014, the present Claimant filed the appropriate hierarchical appeal, reiterating the arguments put forward in the claim for reconsideration regarding the determination of tax losses to be carried forward in the financial year 1998, which amount, in fact, to €7,701,452.12 [€30,805,808.51 X 25%];

On 2 February 2015, the Claimant was notified of the decision dismissing the hierarchical appeal filed, which, similarly to what had been understood in the decision regarding the claim for reconsideration, considered that the losses carryforward in the financial year 1998 amount to €7,584,047.85, however, the tax administration's position was not well-founded, as will now be shown.

The Claimant filed, pursuant to Article 62, no. 5, of the Corporate Income Tax Code, in the wording applicable at that date, a request for deduction of tax losses from BANCO...B.

By an Order of His Excellency the State Secretary for Tax Affairs dated 19 June 1998, the deduction of tax losses from BANCO...B was authorized with the limit of "(…) 25% of the taxable income determined in each of the financial years."

In the tax act in question the tax administration recognized the carryforward of tax losses from BANCO...B in the amount of €7,584,047.85; however, the amount of €7,584,047.85 does not correspond to 25% of the taxable income determined in the financial year 1998.

Indeed, taking into account that the taxable income amounts to €30,805,808.51, the tax losses to be carried forward in the financial year 1998 amount to €7,701,452.13 [€30,805,808.51 X 25%]

For this reason, and contrary to what was sustained by the tax administration, the annulment of the taxable base by the amount of €117,404.28 [€7,701,452.13 – €7,584,047.85] is required.

This is, indeed, the only solution compatible with the Order of His Excellency the State Secretary for Tax Affairs dated 19 June 1998, which, granting the request filed by the present Claimant, authorized the deduction of tax losses from BANCO...B up to the limit of 25% of the taxable income determined in each financial year.

In fact, given the content of the Order of His Excellency the State Secretary for Tax Affairs dated 19 June 1998, which authorizes the deduction of tax losses from BANCO...B up to the limit of 25% of the taxable income determined in each financial year, it is required of the tax administration that, whenever it issues any corrective assessment of the financial year, it implements the deduction of tax losses corresponding to 25% of the taxable income then determined.

Thus, in view of the foregoing, considering that the taxable income of the financial year 1998 is €30,805,808.51, it is evident that the tax losses to be carried forward amount to €7,701,452.13 (€30,805,808.51 X 25%), for which reason the annulment of the taxable base by the amount of €117,404.28 [€7,701,452.13 – €7,584,047.85] is required.

And against this conclusion the position of the tax administration cannot be invoked, according to which the taxable income to be considered for the purposes of determining the tax losses carryforward is taxable income subject to and not exempt from Corporate Income Tax, since such position finds no support in law.

To avoid enforcement proceedings, but without conceding as to the foregoing, the Claimant proceeded to the voluntary payment of the tax in the tax act now subject to arbitration.

As demonstrated above, the error underlying the tax act under review is manifest, and such error is attributable to the tax administration.

Thus, as a consequence of such payment, the success of the present claim should determine, in accordance with law, the reimbursement to the Claimant of the amount unduly paid, plus the respective compensatory interest referred to in Articles 43 of the LGT and 61 of the CPPT.

1. The ATA – Tax and Customs Authority, called upon to submit its response, contested the claim of the Claimant, defending itself, in summary, with the following grounds:

BY WAY OF EXCEPTION

It is important to note first that, what is the matter of the present arbitral proceedings, as the Claimant itself recognizes, is: "The amount of tax losses carryforward (…) as a result of the pronouncement of administrative and judicial decisions (…)"

From the analysis of the Claimant's petition it results that what it seeks in the present arbitral proceedings is to implement execution claims, being at issue only the quantification of the consequences arising from the change in the overall loss of the financial year 1993 of BANCO...B, S.A. from €386,535.28 to €1,449,615.83, resulting from the change in the tax loss of the general regime from €2,180,006.93 to €3,243,087.48.

The additional assessment challenged, as is described in the facts stated by the Claimant, results from the implementation of administrative and judicial decisions handed down in favor of the Claimant, with impact on the amount determined in the correction process challenged in the arbitral proceedings.

Not having the execution of judgments its own regime, as José Casalta Nabais states, in Tax Law, 5th Edition, the tax law refers "to the regime for execution of decisions of administrative courts, for the regime of decisions annulling tax acts is currently governed by Articles 157 to 179 of the CPTA".

This is therefore a declarative proceeding, of autonomous structure, with Article 179, no. 1 of the CPTA establishing its eminently declarative nature.

The protection of the Claimant's interests can only result from a constitutive judgment that formally determines its nature and shapes it, since its legality has already been judicially reviewed.

The competence of arbitral tribunals is, from the outset, limited to the matters indicated in no. 1 of Article 2 of the LRAT, among which cannot be included the declarative content requested by the Claimant from the tribunal, even if in the form of an apparent illegality of the first degree of the assessment act challenged.

No legal support existing that would allow judgments of a nature other than those resulting from the powers set forth in the LRAT to be pronounced, even if they were a consequence, at the level of execution, of the declaration of illegality of assessment acts.

As follows from what is provided in Article 24 of the LRAT, the definition of acts in which execution of arbitral awards should be implemented falls, in the first place, to the TA, with the possibility of recourse to tax courts to request coercive execution, within the scope of the award execution proceedings provided for in Article 146 of the CPPT and Articles 173 et seq. of the Code of Procedure in Administrative Courts.

Not having the Arbitral Tribunal this coercive competence over its own decisions, it cannot pronounce a decision that shapes this content, when these are judicial decisions, quantifying, in the present case, the amount of losses that may be deducted from the taxable income.

The Tribunal being materially incompetent to review the arbitral claim, there is a dilatory exception that prevents it from hearing that claim and leads to dismissal of the case as to the claim in question, in accordance with the provisions of Articles 576, no. 2, 577, letter a) of the Civil Procedure Code (CPC), applicable ex vi Article 29, no. 1, letter e) of the LRAT.

And it should further be noted that, with all executive proceedings with effects on the determination of the taxable base concluded, the processual object, as configured by the Claimant, no longer exists, having been reformulated the loss carryforward statements of BANCO...B from 1993 to 1998 and of A… from 1998 to 2001, the year in which the tax losses are exhausted.

BY WAY OF REPLY ON THE MERITS

As is recognized by the Claimant in Article 49 of its arbitral claim, "in the Division of Inspection of Banks and Other Credit Institutions of the Tax Inspection Services of the Large Taxpayers Unit a process of reverification and correction of the amount of tax losses carryforward for the financial years 1998 and following, which will reflect the sense of the administrative and judicial decisions handed down in favor of the Claimant, and being evident the impact that such correction will have on the financial year in question, the final decision to be handed down could not fail to reflect the amount determined in that correction process".

In this procedure, in order to adjust the loss carryforward, the Corporate Income Tax assessments of BANCO...B and C…, S.A., concerning the financial years whose losses could still be deducted in the financial year 1998 and following, in accordance with Article 46 of the CIRC, were verified, and thus determined the values of losses to be carried forward to BANCO...A, S.A..

All existing Corporate Income Tax assessments of BANCO...A, S.A., from the financial year 1998 to 2002 (date of cessation), as of 31 March 2014, were also analyzed, and the values of deductible losses in each of the financial years were calculated in accordance with the above-identified Orders of the State Secretary for Tax Affairs.

This procedure culminated in the issuance of information No. …/2014, of 31 March 2013, the loss carryforward statements of BANCO...B having been reformulated so as to reflect the implementation of the Administrative Supreme Court decision of 6 January 2013, handed down in Case No. 1116/12, the last decision on the matter of deduction of tax losses, subject of the present arbitral proceedings.

It results from the dispositive of this decision the acceptance as a tax deduction of provisions for pension and survivor benefits in the amount of €1,063,080.55.

Which had effects on the change in the overall tax loss of the financial year 1993 of BANCO...B, which changed from €386,535.28 to €1,449,615.83, resulting from the change in the tax loss of the general regime, which changed from €2,180,006.93 to €3,243,087.48.

From the analysis of the tax losses originating from BANCO...B it results, as can be verified from the determination schedules of the losses to be deducted by BANCO...A, S.A., that: 1. In the financial year 1998, the Claimant deducted less the amount of €117,404.28 (7,701,452.13- 7,584,047.85). 2. In the financial year 1999, it deducted more the value of €120,226.71 (6,271,173.33- 6,150,837.02). 3. In the financial year 2000, it still had to deduct the amount of €7,151,939.23 (14,126,742.92- 6,974,803.69). 4. In the financial year 2001, given the implementation of the Administrative Supreme Court decision, it would have to deduct the amount of €2,506.62 (18,114,932- 15,608,910.65).

It being manifest that in the year 1999, more was deducted by the Claimant, the value of €120,226.71, resulting in a correction in favor of the TA.

Having been made an adjustment to the financial year 2001, in which a new value was determined to correct in favor of the Claimant, in the amount of €2,503,089.59 (2,506,021.62+ 117,404.28120,336.31), and should be recorded as deductible losses the amount of €18,112,000.24 (15,608,910.65+2,503,089.59).

That is, the correction to the taxable base in the amount of €117,404.28 that the Claimant seeks has already been made.

However, it forgets that it must also be reflected in the calculation of the taxable base, the excessive deduction made in 1999, from which would result a correction in favor of the TA.

Consequently, Correction Documents were prepared for the financial years 2000 and 2001, all steps having been taken for recognition of all losses, in accordance with and in the manner defined by administrative and judicial decisions in favor of the Claimant.

That is, the substantive issue in debate in the present proceedings is thus resolved, especially since the determination of the taxable base reflects all administrative and judicial decisions handed down in favor of the Claimant, by virtue of the recognition of the possibility of deduction up to the limit of 25% of the taxable income determined in each of the financial years by the Orders of State Secretary for Tax Affairs.

It being manifestly useless to discuss the legality of a decision whose effects have already been consumed by the executive proceedings which had effects on the determination of the taxable base, subject of discussion, and which, as such, no longer exists.

In these terms and in such further law as Your Excellency will duly supply, the exception of material incompetence of the Tribunal should be judged to be proven, which leads to dismissal of the case; or should Your Excellency not so understand, the present request for arbitral pronouncement should be judged groundless, the additional Corporate Income Tax assessment now challenged remaining valid, as lawful and appropriate.

1. The Claimant filed a written response to the exception raised, sustaining, in summary, the following:

This is an exception which, with due respect, should be judged groundless.

This is because, contrary to what results from the learned Response of the Defendant, in the present proceedings the Claimant does not request the Tribunal to implement "(…) execution claims (…)", nor the quantification of "(…) the amount of losses that may be deducted from the taxable income".

What is requested, and constitutes the subject of the present arbitral claim, is the declaration of illegality of a tax act on the grounds of the erroneous interpretation of the concept of "taxable income" contained in the Order of His Excellency the State Secretary for Tax Affairs dated 19 June 1998, which authorizes the deduction of tax losses from BANCO...B up to the limit of 25% of the taxable income determined in each financial year.

Effectively, it is not disputed in the present proceedings the right to the deduction of tax losses in accordance with that Order, recognized by prior administrative decision that is already established in the legal order, nor that the tax administration sought to give it effect through the issuance of the present tax act.

What is at issue is not seeing recognized an execution claim for a particular administrative or judicial decision, but obtaining a declaration of illegality of a tax act based on the erroneous interpretation of the concept of "taxable income" for purposes of implementing the right to deduction of the said tax losses.

This is a question for which there is no need to invoke the quantification of the amount of tax losses to be deducted and which goes beyond the mere implementing effect of the decision already established in the legal order, since the scope of that concept of "taxable income" has never been disputed.

This is, consequently, a question to be determined intrinsic to the present tax act, which thus assumes an innovative and injurious character.

Being at issue, therefore, the declaration of illegality of the present tax act, it is readily concluded that the arbitral tribunal is materially competent in accordance with no. 1 of Article 2 of the Legal Regime for Arbitration in Tax Matters (LRAT) and Ordinance No. 112-A/2011, of 22 March.

Indeed, Article 2, no. 1, letter a), of the LRAT provides that "The competence of arbitral tribunals comprises the review of the following claims: a) The declaration of illegality of tax assessment acts, self-assessment acts, withholding at source acts and installment payment acts".

In turn, pursuant to Article 2 of Ordinance No. 112-A/2011, of 22 March, "The services and bodies referred to in the preceding article bind themselves to the jurisdiction of arbitral tribunals functioning in the CAAD which have as their object the review of claims concerning taxes whose administration is entrusted to them referred to in no. 1 of Article 2 of Decree-Law No. 10/2011, of 20 January [LRAT]".

Thus, no doubt remains that the Claimant's claim falls within the scope of material competence of the arbitral tribunal.

In fact, the circumstance that there is already a determination of the right to tax losses does not mean that any act that temporally follows it is executive in nature of that decision and, consequently, incapable of causing injury to the taxpayer.

Indeed, where an act is innovative, as occurs in the case sub judice, one is dealing with an act that is clearly not executive and challengeable by the taxpayer.

Thus, recognition cannot fail to be given to the material competence of Arbitral Tribunals to review the legality of such acts.

Indeed, the Claimant understands that the interpretation of Article 2, no. 1, of the LRAT and of Article 2 of Ordinance No. 112-A/2011, of 22 March, to the effect of excluding from the competence of arbitral tribunals the declaration of illegality of injurious and innovative tax acts merely because a prior administrative or judicial determination existed regarding a certain scope of that act, is unconstitutional as violating the principle of access to law and effective judicial protection contained in Articles 20 and 268 of the Constitution of the Portuguese Republic, which is invoked for all legal purposes.

1. The Claimant filed written submissions in which it maintained the positions already previously assumed in the request for arbitral pronouncement and in the Request for response to the exception, reiterating, among others, and in summary, the following:

Contrary to what is invoked by the Defendant in its learned response, the dilatory exception of material incompetence of the Arbitral Tribunal is not established in the present case.

Indeed, reiterate, it is not disputed in the present proceedings the right to the deduction of tax losses in accordance with that Order, recognized by prior administrative decision that is already established in the legal order, nor that the tax administration sought to give it effect through the issuance of the present tax act.

What is at issue is not seeing recognized an execution claim for a particular administrative or judicial decision, but obtaining a declaration of illegality of a tax act based on the erroneous interpretation of the concept of "taxable income" for purposes of implementing the right to deduction of the said tax losses.

This is a question for which there is no need to invoke the quantification of the amount of tax losses to be deducted and which goes beyond the mere implementing effect of the decision already established in the legal order, since the scope of that concept of "taxable income" has never been disputed.

This is, as was demonstrated, a question to be determined intrinsic to the present tax act, which thus assumes an innovative and injurious character.

In these terms, it is readily concluded that the arbitral tribunal is materially competent in accordance with no. 1 of Article 2 of the Legal Regime for Arbitration in Tax Matters (LRAT) and Ordinance No. 112-A/2011, of 22 March.

It is evident that, where the Claimant petitions the review of the legality of the tax act consisting of the additional Corporate Income Tax assessment No. 2013..., of 4 February 2013 and the statement of accounts reconciliation No. 2013..., of 4 April 2013, concerning the financial year 1998, the arbitral tribunal is materially competent for its review, pursuant to Article 2, no. 1, letter a), of the LRAT and Article 2 of Ordinance No. 112-A/2011, of 22 March, and the exception invoked should be judged groundless.

1. A. The Defendant also filed written submissions, in summary, as follows:

Notwithstanding the Claimant's claim that what it seeks is the declaration of illegality of a tax act on the grounds of erroneous interpretation of the concept of "taxable income", what is at issue is the quantification of the consequences arising from the change in the overall loss of the financial year 1993 of BANCO...B, S.A. from €386,535.28 to €1,449,615.83, resulting from the change in the tax loss of the general regime from €2,180,006.93 to €3,243,087.48.

There is, contrary to what the Claimant argues, no "innovative and injurious character", as the corrective assessment merely implements the deduction of tax losses authorized, which is not disputed.

The additional assessment challenged, as is described in the facts stated by the Claimant, results from the implementation of administrative and judicial decisions handed down in favor of the Claimant, with impact on the amount determined in the correction process challenged in the arbitral proceedings.

Whence it follows that there cannot be a "declaration of illegality of a tax act on the grounds of erroneous interpretation of the concept of 'taxable income' contained in the Order of His Excellency the State Secretary for Tax Affairs dated 19 June 1998".

Effective judicial protection can only be obtained with a decision of declarative character, as what is clearly at issue is the shaping of the content of the execution, which cannot be decided within the scope of arbitration.

The "interpretation of the concept of 'taxable income'" is a declarative effect of the implementation of the award, inherent in the very materialization of the award, and thus the substantive issue in debate in the present proceedings is resolved, especially since the determination of the taxable base reflects all administrative and judicial decisions handed down in favor of the Claimant, by virtue of the recognition of the possibility of deduction up to the limit of 25% of the taxable income determined in each of the financial years by the Orders of State Secretary for Tax Affairs.

It being manifestly useless to discuss the legality of a decision whose effects have already been consumed by the executive proceedings which had effects on the determination of the taxable base and which, as such, no longer exists.

Thus, the Arbitral Tribunal should judge verified the exception of material incompetence of the Tribunal, which leads to dismissal of the case;

Or should Your Excellency not so understand, the present request for arbitral pronouncement should be judged groundless, and the additional Corporate Income Tax assessment now challenged should remain valid, as lawful and appropriate.

1. The tribunal is materially competent and is regularly constituted in accordance with the LRAT.

The parties have standing and legal capacity, are legitimate and are legally represented.

The proceedings are not vitiated by defects that would invalidate them.

1. It is necessary to resolve the following questions:

a) Material incompetence of the Arbitral Tribunal.

b) Illegality of the tax assessment act subject of the arbitral claim invoked by the Claimant and the Claimant's claim for partial annulment thereof.

c) The Claimant's claim for restitution of the tax that it considers to have been unduly paid, plus compensatory interest.

II – The Relevant Facts

1. With relevance to the decision of the case, the following facts are considered proven:

In 2001, an inspection action was initiated against the Claimant by the Tax Prevention and Inspection Services of the General Directorate of Taxes and Duties, with reference to the financial year 1998, within the scope of which corrections were made to the Claimant's taxable base.

As a result of that inspection action, the Claimant was notified of the additional Corporate Income Tax assessment No. …, of 12 May 2001.

It results from the said additional assessment that, following that inspection action, the tax inspection services set the taxable base at €31,985,086.52, the collection at €10,874,929.42, and the municipal surcharge at €989,618.56;

From the said assessment it results that the tax administration disregarded the carryforward of tax losses determined by BANCO...B, S.A. (BANCO...B), incorporated by merger into the present Claimant in the year 1998, in the amount of €7,584,047.85, and whose carryforward up to 25% of the taxable income determined in each of the financial years had been authorized by Order of His Excellency the State Secretary for Tax Affairs dated 19 June 1998.

Not being satisfied, on the one hand, with the correction concerning the increase in the taxable base of the amounts of €235,596.17 and €1,313,612.56, corresponding, respectively, to the excess of estimated tax resulting from the presentation of substitute declarations by D…, S.A. (D) and E…, S.A. (E…), both incorporated by merger into the Claimant, and on the other hand, with the disregard of the carryforward of tax losses determined by BANCO...B, in the amount of €7,584,047.85, on 4 October 2001, the Claimant filed a claim for reconsideration against the said additional Corporate Income Tax assessment;

On 5 September 2003, the present Claimant was notified of the decision granting the claim for reconsideration in part.

Indeed, with reference to the disregard of the carryforward of tax losses determined by BANCO...B, in the amount of €7,584,047.85, the tax administration understood that the Claimant was well-founded, granting the claim for reconsideration in this part, but with reference to the correction concerning the increase in the taxable base of the amounts of €235,596.17 and €1,313,612.56, corresponding to the excess of estimated tax resulting from the presentation of form 22 substitute declarations by D… and E…, respectively, the tax administration maintained the correction made by the tax inspection services;

On 19 September 2003, the Claimant filed a judicial challenge, which was conducted in the 4th Functional Unit of the Administrative and Tax Court of..., under case number 100/03/31;

On 7 October 2011, the present Claimant was notified of the judgment that granted the judicial challenge in part.

The Administrative and Tax Court of... decided that the form 22 substitute declaration presented by E… was submitted in a timely manner, and for that reason, the deduction of the amount of €1,313,612.56 should be accepted, but with reference to the substitute declaration presented by D…, it decided that it had been submitted out of time, and therefore the Appellant, present Claimant, was not entitled to deduct the amount of €235,596.17;

With reference to the correction concerning the non-acceptance as a tax deduction of the amount of €134,334.55 relating to amortization of costs incurred with benefit works on own buildings, the present Claimant filed a hierarchical appeal, in accordance with Article 112 of the Corporate Income Tax Code, in the wording applicable at that date, which was dismissed by Order dated 13 June 2002 of His Excellency the State Secretary for Tax Affairs;

From the said dismissal decision, the present Claimant filed a contentious appeal, pursuant to Article 112, no. 2, of the Corporate Income Tax Code, in the wording applicable at that date, which was judged groundless by the Central Administrative Court in a judgment of 4 November 2003, with the Supreme Administrative Court, in a judgment of 28 September 2004, denying the appeal filed against that decision;

Still pending the said contentious appeal, the Claimant was notified of the Corporate Income Tax assessment No. …, of 24 July 2002.

As can be extracted from the said additional assessment, the tax administration proceeded to increase the taxable base set following the inspection action – €31,985,086.52 – by the amount of €134,334.55, relating to amortization of costs incurred with benefit works on own buildings;

Not being satisfied with the issuance of that assessment, on 2 December 2002, the Claimant filed a claim for reconsideration;

On 8 November 2005, the Claimant was notified of the decision dismissing the claim for reconsideration, which, rejecting the arguments put forward, considered that the suspensory effect provided for in Article 112 of the Corporate Income Tax Code, in the wording applicable at that date, was limited to the hierarchical appeal and, as such, the Corporate Income Tax assessment was not vitiated by any illegality;

As regards the disregard of the carryforward of tax losses determined by BANCO...B, and taking into account that the Claimant's claim had been granted, in this part, within the scope of the claim for reconsideration filed against the Corporate Income Tax assessment No. …, of 12 May 2001, it is stated in the said decision that "Thus, and given that the Dc-…/… Appraisal / … 2002 … has already been issued, in which the deductible loss of €7,584,047.85 / Esc. 1,520,465,081 was corrected, we also believe that an adjustment should be made to the losses carryforward up to (25% of €32,119,421.07) - €8,029,855.27, in order to comply with the Order of 98/06/19 and 99/01/22 of His Excellency the Secretary for Tax Affairs, taking into account that in the letter No. … of the Tax Administration Directorate of..., concerning Case File for Claim for Reconsideration No. …-…/…-1998 (restoration of losses, annulled in the … appraisal), are listed as deductible tax losses for 1998 of Esc. 3,233,280,095 / €16,127,533.12, of which Esc. 1,520,465,081 / €7,584,047.85 have already been deducted."

On 24 November 2005, the Claimant filed a judicial challenge, which was conducted in the 3rd Functional Unit of the Administrative and Tax Court of..., under case number …/05….B…;

On 27 May 2013, the Claimant was notified of the judgment that granted the judicial challenge groundless.

With reference to the financial year 1998, the Claimant was notified, on 14 January 2013, of the refund check No. …, in the amount of €56,247.13 (document No. 11 of the claim for reconsideration that integrates the administrative instructional file);

Subsequently the Claimant was notified of the tax act consisting of the Corporate Income Tax assessment No. 2013..., of 4 February 2013 and the statement of accounts reconciliation No. 2013..., of 4 April 2013, concerning the financial year 1998.

As a result of the reversals and offsets made by the tax administration in the statement of accounts reconciliation, the said tax act determined an amount allegedly lacking of €315,241.03, and for the payment of which the Claimant proceeded on 30 June 2013.

The Claimant requested from the tax administration office... …, the issuance of a certificate attesting the full legal basis of the same.

In response to that request, the Claimant was notified of the legal grounds certificate of that tax act and which contains the grounds on which the tax administration based the issuance of the tax act in question

According to the said certificate "The judgment of 16 May 2012 of the Supreme Administrative Court, culminating the judicial relief case No. 1125/11-30, determined that €1,313,612.56 be removed from the respective taxable base, and thus were restored the €7,584,047.85 of losses from prior financial years, which led to the taxable base for Corporate Income Tax/98, which was the value of €32,119,421.07 in the aforesaid assessment No. …, to change to the value of €23,221,760.66 (€32,119,421.07 - €1,313,612.56 - €7,584,047.85) in the assessment we generated (assessment No. 2013 … of 2013-04-04). Both assessments No.s … and …, as well as the related payment notices, were fully annulled on 2013-01-03, and thus the new assessment No. 2013 … of 2013-04-04 had – as a point of comparison – the aforesaid assessment 2001 … of 2001-01-24."

With reference to the refund check, it is stated in that legal grounds certificate that "An error made by the services in filling out the correction declaration led to the taxpayer being unduly reimbursed in €56,247.13, as per the check of such amount that was paid to him on 2013-01-17; which – for the inclusion of the restoration of the reimbursement due – led to a "final" debit of the respective Corporate Income Tax/98 of €175,696.14 + €56,247.13 = €231,943.27."

With reference to compensatory interest, it is clarified in the said legal grounds certificate that "(…) given that the first correction action by the services occurred on 2013-02-07 (originating from the aforesaid assessment No. … of 2001-05-2012), and given that the error of restoration was not the responsibility of the taxpayer, the compensatory interest debited should amount to €20,789.91 [€175,696 x 7% x 617 days (from 1999-01-06 to 2001-02-07) / 365 days] and not set at €83,297.75, and for which reason the Income Tax and Expenditure Assessment Division of the Tax Directorate of... prepared a correction document."

The Claimant filed, on 17 September 2013, a claim for reconsideration against the same.

As grounds for the claim for reconsideration the present Claimant invoked that the tax losses to be carried forward in the financial year 1998 amount to the total sum of €7,701,451.96, instead of the amount of €7,584,047.85 determined by the tax administration, for which reason the annulment of the taxable base by the amount of €117,404.11 is required.

It was also invoked in that claim for reconsideration that the tax act in question determined in excess, as compensatory interest, the amount of €62,507.84.

Finally, having the Claimant proceeded to the voluntary payment of the amount determined in the tax act in question, the reimbursement of that amount was petitioned, plus the respective compensatory interest;

On 10 February 2014, the present Claimant was notified to submit a response concerning the draft decision granting the claim for reconsideration in part.

With reference to the carryforward of tax losses, the tax administration maintains, on the one hand, that "The amount now claimed of €117,404.00 never appeared in the Claim for Reconsideration No. …-…/… filed by A… on 4 October 2001 against the additional Corporate Income Tax assessment No. … (of 12 May 2001) (…)", and therefore "If that claim were granted, the TA would be in manifest illegality by failing to observe the statute of limitations for the tax (in this case, five years from the fact giving rise to the tax), established, at the time of the facts, in the (then) Article 79 of the CIRC and no. 1 of the (then) Article 33 of the CPT."

And, on the other hand, that the losses carryforward in the financial year 1998 amount, instead, to €7,488,991.20, because "(…) the taxable income to be considered for purposes of that limit will always be the taxable income subject to and not exempt from Corporate Income Tax, which (in this case) amounts to €29,955,964.79 and not to €30,805,807.85[€29,955,964.79 (taxable income subject to Corporate Income Tax and not exempt from it) + €849,843.72 (taxable income subject to Corporate Income Tax and not exempt from it) + €849,843.72 (taxable income, attributable to the activity of A… in the Free Trade Zone of Madeira, subject, although exempt)]. (…) However, no additional assessment will be issued, to the extent that a loss carryforward in the amount of €7,584,047.85 (…) was deducted in the determination of the taxable base (…) If the limit to be considered were only the taxable income subject to and not exempt from Corporate Income Tax (…) the T.A. would likewise be committing (…) an illegality, as it would be in breach of the principles (…) inherent in the provided no. 4 of Article 46 of the CIRC (…)".

With reference to the request for annulment of compensatory interest, it is stated in the said decision that "(…) the Request is well-founded as to the reimbursement of the amount of €62,507.84 relating to compensatory interest unduly paid."

With reference to the request for compensatory interest, the tax administration understood that "(…) the delay in the (final) assessment is attributable to the services, and therefore effect will be given to the provision in no. 1 of Article 43 of the LGT, translated into the payment of such interest (…)."

Within the legally established period, the present Claimant exercised its right to prior hearing, invoking, in summary, that, in the course in the Division of Inspection of Banks and Other Credit Institutions of the Tax Inspection Services of the Large Taxpayers Unit, a process of reverification and correction of the amount of tax losses carryforward for the financial years 1998 and following, which will reflect the sense of the administrative and judicial decisions handed down in favor of the Claimant, is being conducted, and being evident the impact that such correction will have on the financial year in question, the final decision to be pronounced could not fail to reflect the amount determined in that correction process.

On 31 March 2014, the Division of Inspection of Banks and Other Credit Institutions of the Tax Inspection Services of the Large Taxpayers Unit prepared a process of reverification and correction of the amount of tax losses carryforward from which it results that the amount of tax losses of the Claimant, carryforward for the financial year 1998 amounts to the value of €7,701,452.13.

Following the notification of the said draft decision, the present Claimant was notified of the tax act consisting of the additional Corporate Income Tax assessment No. 2013..., of 21 May 2013 and the statement of accounts reconciliation No. 2014..., of 27 January 2014, concerning the financial year 1998, together with the refund check No. …, dated 27 January 2014, in the amount of €62,507.84.

With the issuance and subsequent notification of this tax act, the annulment and reimbursement projected in the draft decision granting the claim for reconsideration in part notified to the present Claimant were implemented.

On 10 March 2014, the present Claimant was notified of the decision on the claim for reconsideration sub judice, within the scope of which the tax administration determines the maintenance of the tax act then challenged, in the part in which it disregards the requested deduction of tax losses.

Notwithstanding the arguments put forward in the request submitted pursuant to the right of prior hearing, the tax administration converted into final the draft decision, on the grounds that "(…) no elements were submitted, nor any contrary argument alleged with reference to the grounds explained in the "Draft Decision", which would permit the review of the reframing of the dispute contained in the present claim for reconsideration file, concerning the non-deduction of the amount of €117,404.11, relating to carryforward of tax losses "legally deductible" in the financial year 1998, and given that all the alleged (and requested) in the present prior hearing request is, in terms of material and legal fact, outside the scope of those proceedings, it appears to us that all that was projected should be converted into final: dismiss the Claimant's request, by reference to the reimbursement of €117,404.11 [7,701,451.96 – 7,584,047.85] (…)."

Not being satisfied with this decision, on 9 April 2014, the present Claimant filed the appropriate hierarchical appeal.

As grounds for the hierarchical appeal, the Claimant reiterated the arguments put forward in the claim for reconsideration concerning the determination of tax losses to be carried forward in the financial year 1998, which amount, in fact, to €7,701,452.12 [€30,805,808.51 X 25%].

The Claimant also invoked, in response to the arguments of the tax administration, that the object of that claim for reconsideration is not limited by the object of the claim for reconsideration filed against the Corporate Income Tax assessment No. … and that the deduction is not prevented by the existence of a statute of limitations on the right to make an assessment;

On 2 February 2015, the Claimant was notified of the decision dismissing the hierarchical appeal filed.

In this decision, the tax administration principally states that "With reference to this question, indeed, the argument in the appealed decision does not hold, in accordance with which in the claim for reconsideration filed against the additional Corporate Income Tax assessment No. 2001 … the taxpayer only contested the disregard of the carryforward of tax losses determined by BANCO...B in the value of €7,584,047.85 and that if the presently petitioned claim were granted, one would be failing to observe the statute of limitations on the right to make an assessment."

Already with reference in concrete terms to the determination of tax losses to be carried forward in the financial year 1998, it is stated in the hierarchical appeal decision that "(…) the taxable base determined for the period of 2008 is €30,805,808.51 (32,114,421.07 – 1,313,612.56). Therefore, this should be the value to be considered for purposes of compliance with the Order of the State Secretary for Tax Affairs, which authorizes the deduction of tax losses from BANCO...B with the limit of 25% of the taxable income determined in each of the financial years."

It is further stated in that decision that "(…) of the value of the taxable income determined (€30,805,808.51), €849,843.72 is relating to taxable income, attributable to the activity of A… in the Free Trade Zone of Madeira, therefore subject, although exempt."

Thus, it is concluded in the decision that "(…) the taxable income to be considered for purposes of the limit of 25% authorized in the Order of the State Secretary for Tax Affairs, dated €1998/06/19, is €29,955,964.79, which corresponds to the taxable income subject to and not exempt. (€29,955,964.79 = €30,805,808.51 - €849,843.72)", and therefore "(…) the value of losses to be deducted should have been €7,488,991.20."

III – The Applicable Law

ON THE MATTER OF THE EXCEPTION

Material Incompetence of the Tribunal

1. The Defendant argues that from the analysis of the Claimant's petition it results that what it seeks in the present arbitral proceedings is to implement execution claims, resulting from the implementation of administrative and judicial decisions handed down in favor of the Claimant, the arbitral tribunal not having competence for such. In turn, the Claimant argues that it does not request the Tribunal to implement "(…) execution claims (…)", nor the quantification of "(…) the amount of losses that may be deducted from the taxable income" but rather the declaration of illegality of a tax act on the grounds of erroneous interpretation of the concept of "taxable income" contained in the Order of His Excellency the State Secretary for Tax Affairs dated 19 June 1998, which authorizes the deduction of tax losses from BANCO...B up to the limit of 25% of the taxable income determined in each financial year.

Let us consider this.

No. 1 of Article 2 of the Legal Regime for Arbitration in Tax Matters provides that the competence of arbitral tribunals comprises the review of the following claims:

"a) The declaration of illegality of tax assessment acts, self-assessment acts, withholding at source acts and installment payment acts;

b) The declaration of illegality of acts of determination of taxable matter when it does not give rise to the assessment of any tax, acts of determination of the taxable base and acts fixing patrimonial values;"

This provision may be compared with Article 97 of the Code of Procedure and Process for Tax Matters, where the claims subject of judicial tax proceedings are indicated, with letter a) of no. 1 providing that the judicial tax proceedings comprise "Challenges to the assessment of taxes, including those of a parafiscal nature and self-assessment, withholding at source and installment payment acts".

In turn, Article 95 of the General Tax Law provides:

"1 - The interested party has the right to challenge or appeal against any act injurious to its rights and legally protected interests, according to the forms of proceeding prescribed by law.

2 - Acts that may be injurious include, in particular:

The assessment of taxes, with it also being considered as such for purposes of the present law acts of self-assessment, withholding at source and installment payment;

(…).

In the teaching of José Casalta Nabais, "Assessment, broadly speaking, that is, as the sum of all operations intended to determine the amount of the tax, comprises: 1) Subjective assessment intended to determine or identify the taxpayer or subject of the tax legal relationship, 2) Objective assessment through which the taxable matter or base of the tax is determined and the rate to be applied is also determined, in the case of a plurality of rates, 3) Assessment strictly speaking translated into the determination of the collection through the application of the rate to the taxable matter or base, and 4) (possible) deductions from collection."[1]

In the case of the present proceedings, the assessment act challenged is, unquestionably, an assessment act of a tax that assumes, indeed, an innovative character in that it adopts a concept of taxable income not implemented in any of the decisions that, in the thesis of the Defendant, it would aim to execute, and on the other hand, establishes a value of tax losses carryforward for the financial year 1998 different from that which was determined and validated by the Defendant itself and reiterated by it in the present arbitral proceedings (although not adopted by it in the decisions that decided both the claim for reconsideration and the hierarchical appeal).

This is an act clearly injurious within the meaning of Article 95, no. 1, and 2, letter a) of the General Tax Law, necessarily challengeable and encompassed by the material competence of the Arbitral Tribunal pursuant to Article 2, no. 1, letter a) of the LRAT.

In this perspective, regardless of the question of whether, in the sequel of the annulment of some prior act, the Claimant could resort to its execution pursuant to the provisions of the Code of Procedure in Administrative Courts, the fact is that, not occurring a situation of inertia of the Defendant, having it practiced a tax act with the characteristics pointed out above, in light of the norms referred to and of the principle of effective judicial protection, as expressly enshrined in Article 268, no. 4 of the Constitution of the Portuguese Republic, with reference to injurious administrative acts, the same cannot fail to be challengeable.

Indeed, this was the understanding of the Defendant manifested in the notifications to the Claimant of the assessment, of the decision on the claim for reconsideration and, also, of the hierarchical appeal decision, in which it always expressly communicated to the Claimant the possibility of filing a judicial challenge (and in the latter case also an arbitral challenge) against the assessment act in question.

The Defendant's arguments in the present proceedings on this exception cannot, therefore, fail to be groundless.

In conformity with this, it is decided to judge the exception groundless.

ON THE MERITS OF THE CASE

1. The Claimant understands that, given the content of the Order of His Excellency the State Secretary for Tax Affairs dated 19 June 1998, which authorizes the deduction of tax losses from BANCO...B up to the limit of 25% of the taxable income determined in each financial year, it is required of the tax administration that, whenever it issues any corrective assessment of the financial year, it implement the deduction of tax losses corresponding to 25% of the taxable income then determined, and that given the taxable income of the financial year 1998 is €30,805,808.51, the tax losses to be carried forward amount to €7,701,452.13 (€30,805,808.51 X 25%), for which reason the annulment of the taxable base by the amount of €117,404.28 [€7,701,452.13 – €7,584,047.85] is required.

The Defendant's position in these proceedings is that "In the financial year 1998, the Claimant deducted less the amount of €117,404.28 (7,701,452.13- 7,584,047.85)" but that "In the financial year 1999, it deducted more the value of €120,226.71" "It being manifest that in the year 1999, more was deducted by the Claimant, the value of €120,226.71, resulting in a correction in favor of the TA" and therefore "the correction to the taxable base in the amount of €117,404.28 that the Claimant seeks has already been made" as "it is to be reflected in the calculation of the taxable base, the excessive deduction made in 1999, from which would result a correction in favor of the TA."

That is, the Defendant accepts that the assessment in question reflects a deduction of less than €117,401.28, recognizing that the losses to be deducted in the financial year 1998 were €7,701,452.13, but considers that this was offset by the excessive deduction made in the following financial year.

Regardless of the substantive correctness of such considerations, the question arises as to whether they could, or could not, if well-founded, support a decision of the Arbitral Tribunal to the effect of the groundlessness of the arbitral challenge filed by the Claimant, taking into account the grounds for the administrative acts challenged; as it was decided in the judgment of the Supreme Administrative Court of 1 June 2011, handed down in case 058/11, in line with settled case law, "Under penalty of violation of the principle of separation of powers and assuming itself as an organ of active tax administration, the tribunal cannot decide on the maintenance of acts that should be annulled on the grounds of different reasoning from that used by the tax administration."

Now, the grounds invoked by the Defendant for its positions in the administrative phase was not this, but rather that the taxable income to be considered for purposes of the limit of 25% authorized in the Order of the State Secretary for Tax Affairs, dated €1998/06/19, is €29,955,964.79, corresponding to the taxable income subject to and not exempt, and therefore the value of losses to be deducted would not be 7,701,452.13, but should have been €7,488,991.20 (thesis of the hierarchical appeal decision) or 7,584,047.85 (value adopted by the assessment act and the decision on the claim for reconsideration).

In conformity with this, it would be forbidden to the tribunal, for the reasons mentioned in the judgment cited above, to judge the Claimant's claim groundless on the grounds invoked by the Defendant in the arbitral proceedings.

Even so it should be said, however, that even if this were not the case, the reasoning of the Defendant to the effect of offsetting the value of losses deducted less in 1998 with the losses deducted excessively in 1999 would be manifestly groundless.

Indeed, pursuant to Article 7, no. 1, of the Corporate Income Tax Code, in the wording at the time of the fact giving rise to the tax (current Article 8), "The Corporate Income Tax, save as provided in no. 8, is due for each financial year, which shall coincide with the civil year, without prejudice to the exceptions provided in this article".

In turn, pursuant to no. 7 (current no. 9) of the same article, "The fact giving rise to the tax is deemed to occur on the last day of the taxation period".

As a consequence, any possible excessive deduction of losses in 1999 could never be reflected in the quantification of the tax obligation of 1998.

1. Let us consider, finally, the reasoning of the TA in the administrative phase.

The Defendant considered that the taxable income to be considered for purposes of the limit of 25% authorized in the Order of the State Secretary for Tax Affairs, dated €1998/06/19, is €29,955,964.79, corresponding to the taxable income subject to and not exempt, as from the value of the taxable income determined (€30,805,808.51), €849,843.72 is relating to taxable income attributable to the activity of A… in the Free Trade Zone of Madeira, therefore subject, although exempt."

It appears to us that this reasoning also does not hold.

The Order of the State Secretary for Tax Affairs refers to "taxable income" (legally defined in Article 17 of the Corporate Income Tax Code) and not "taxable income subject to and not exempt". Indeed, the Defendant itself understood this to be the case in the process of reverification and correction of the amount of tax losses carryforward, prepared by the Division of Inspection of Banks and Other Credit Institutions of the Tax Inspection Services of the Large Taxpayers Unit, from which it results that the amount of tax losses of the Claimant, carryforward for the financial year 1998 amounts to the value of €7,701,452.13, and it also understood this to be the case in the positions taken in the Response and in the written submissions in this arbitral proceedings.

Thus, it is concluded that the assessment act in question is, in this part, vitiated by the defect of violation of law, and therefore cannot fail to be decreed the partial annulment thereof, as petitioned.

1. The Claimant further seeks the condemnation of the Defendant to return the sum paid regarding the assessment, in the part it considers to be unduly paid, as well as the respective compensatory interest.

Let us consider this.

In accordance with the provisions in letter b) of Article 24 of the LRAT, the arbitral decision on the merits of the claim against which no appeal or challenge is available binds the tax administration from the end of the period provided for appeal or challenge, with it, in the exact terms of the success of the arbitral decision in favor of the taxpayer and until the end of the period provided for the spontaneous execution of judicial decisions of tax courts, having to "restore the situation that would have existed if the tax act subject of the arbitral decision had not been practiced, adopting the acts and operations necessary for this purpose", which is in harmony with what is provided in Article 100 of the General Tax Law [applicable by virtue of the provisions in letter a) of no. 1 of Article 29 of the LRAT], which establishes that "The Tax Administration is obliged, in case of total or partial success of a claim for reconsideration, judicial challenge or appeal in favor of the taxpayer, to the immediate and full restoration of the legality of the act or situation subject of the litigation, including the payment of compensatory interest, if applicable, from the end of the period for execution of the decision".

Although Article 2, no. 1, letters a) and b), of the LRAT uses the expression "declaration of illegality" to define the competence of arbitral tribunals functioning in the CAAD, making no reference to condemnatory decisions, it should be understood that the competence of arbitral tribunals, functioning in the CAAD, should be understood to include the powers that in judicial challenge proceedings are attributed to tax courts, this being the interpretation that is in harmony with the legislative authorization on which the Government based its approval of the LRAT, in which it proclaims, as the first directive, that "the arbitral tax proceedings should constitute an alternative procedural means to judicial challenge proceedings and to action for recognition of a right or legitimate interest in tax matters".[2]

The judicial challenge proceedings, despite being essentially a proceeding for annulment of tax acts, admits the condemnation of the Tax Administration to payment of compensatory interest, as is extracted from Article 43, no. 1, of the General Tax Law, in which it is established that "compensatory interest is due when it is determined, in a claim for reconsideration or judicial challenge, that there was error attributable to the services resulting in payment of the tax debt in an amount greater than that legally due" and from Article 61, no. 4 of the Code of Procedure and Process for Tax Matters (as amended by Law No. 55-A/2010, of 31 December, to which corresponds no. 2 in the original wording), which provides that "if the decision recognizing the right to compensatory interest is judicial, the period for payment shall be counted from the beginning of the period for spontaneous execution thereof".

Thus, no. 5 of Article 24 of the LRAT, in establishing that "interest is due, regardless of its nature, in accordance with the terms provided in the general tax law and in the Code of Procedure and Process for Tax Matters", should be understood as permitting the recognition of the right to compensatory interest in the arbitral proceedings.

In the case at hand, it is manifest that, in the sequel to the illegality of the assessment acts, reimbursement of the tax is due, by virtue of the said Articles 24, no. 1, letter b), of the LRAT and 100 of the General Tax Law, as such is essential to "restore the situation that would have existed if the tax act subject of the arbitral decision had not been practiced". The amount of the reimbursement shall be €39,917.40, which corresponds to the application of a Corporate Income Tax rate of 34%, in force at the date, to the taxable base unduly considered in the amount of €117,404.11.

With reference to compensatory interest, it remains to consider this claim in light of Article 43 of the General Tax Law.

No. 1 of that article provides that "Compensatory interest is due when it is determined, in a claim for reconsideration or judicial challenge, that there was error attributable to the services resulting in payment of the tax debt in an amount greater than that legally due".

We endorse the understanding of Diogo Leite de Campos, Benjamin Silva Rodrigues and Jorge Lopes de Sousa, who maintain that "The error attributable to the services that carried out the assessment is demonstrated when a claim for reconsideration or a judicial challenge of such assessment itself is filed and the error is not attributable to the taxpayer" (General Tax Law, writings encounters, 4th Edition, 2012, page 342).

In the case "sub judice", the error giving rise to the assessments now annulled not being attributable to the Claimant, the claim for condemnation of the Defendant as to compensatory interest cannot fail to proceed.

Thus, the Tax and Customs Authority must give effect to this decision, in accordance with Article 24, no. 1, of the LRAT, returning the amounts paid by the Claimant relating to the annulled assessments, with compensatory interest at the legal rate.

Compensatory interest is due from the date of payment to the date of processing of the credit note, in which they are included (Article 61, no. 5, of the Code of Procedure and Process for Tax Matters).

IV – Decision

The Arbitral Tribunal thus decides to judge the request for arbitral pronouncement to be totally well-founded and, in consequence:

1. Declares the partial annulment of the assessment subject of the present proceedings, in the amount of €39,917.40.

2. Condemns the Tax and Customs Authority to return to the Claimant the amount of €39,917.40 (Thirty-nine thousand, nine hundred and seventeen euros and forty cents) with compensatory interest at the legal rate counted from the date of payment by the Claimant to the date of processing of the credit note.

Value of the action: €39,917.40 (Thirty-nine thousand, nine hundred and seventeen euros and forty cents) in accordance with the provisions in Article 306, no. 2, of the Civil Procedure Code and 97-A, no. 1, letter a), of the Code of Procedure and Process for Tax Matters and 3, no. 2, of the Regulation of Costs in Arbitration Proceedings.

Costs against the Defendant, in the amount of €1,836.00 (One thousand eight hundred and thirty-six euros) in accordance with no. 4 of Article 22 of the LRAT.

Notification to be made.

Lisbon, CAAD, 21 December 2015

The Arbitrator

Marcolino Pisão Pedreiro

[1] TAX LAW, 3rd Edition, Almedina, 2005, page 318.

[2] On this question see Jorge Lopes de Sousa, Commentary on the Legal Regime for Arbitration in Tax Matters, in GUIDE TO TAX ARBITRATION, Coord. Nuno Villa-Lobos and Mónica Brito Vieira, 2013, Almedina, pages 110-116).