Summary
Full Decision
ARBITRAL DECISION
The arbitrators José Poças Falcão (president), Francisco Nicolau Domingos and Ana Teixeira de Sousa (members), designated by the Ethics Council of the Administrative Arbitration Centre (CAAD) to form the present arbitral tribunal, agree as follows:
1. REPORT
1.1. A..., legal entity no. ..., with registered office at ..., no. ...-..., ... – ... ..., hereinafter referred to as the Claimant, submitted on 02/07/2018 a request for constitution of a tribunal and for arbitral ruling concerning the act of additional assessment of Stamp Duty no. 2018 ... and compensatory interest on the grounds that, in its judgment, it is null and suffers from the defect of violation of law, due to errors in the factual and legal presuppositions.
1.2. The Ethics Council designated as arbitrators of the collective arbitral tribunal the signatories, who communicated acceptance of the assignment within the legal period.
1.3. On 11/09/2018 the arbitral tribunal was constituted.
1.4. In compliance with the provisions of article 17, paragraphs 1 and 2 of Decree-Law no. 10/2011, of 20 January (RJAT), the Respondent was notified on 12/09/2018 to, if it so wished, submit a response, request the production of additional evidence and remit the administrative proceedings (PA).
1.5. On 15/10/2018 the Respondent submitted its response, in which it argues for the complete dismissal of all claims formulated in the present arbitral proceedings.
1.6. The tribunal on 25/10/2018 decided to dispense with the holding of the meeting to which article 18, paragraph 1 of RJAT refers, on the basis of the absence of exceptions to be known and the unnecessary nature of inviting the parties to correct the procedural documents, granted twenty days for them, if they so wished, to submit simultaneous written closing arguments and designated 18/02/2019 as the deadline for issuing the arbitral decision.
1.7. The Claimant submitted on 19/11/2018 the written closing arguments and the Respondent on 05/11/2018, with the parties maintaining their initial positions.
1.8. The deadline for issuing the decision was extended with the deadline date of 10/04/2019.
2. POSITION OF THE PARTIES
The Claimant alleges, in the first place, that the additional assessment of Stamp Duty should be annulled, insofar as the final report of the tax inspection was not notified to its representative, a circumstance that determines the non-production of its legal effects and consequent invalidity of the consequent act – assessment of Stamp Duty.
In this sequence, it argues that: in the absence of notification, there was also a lack of substantiation of the tax act which determines its annullability.
This lack of substantiation equally derives from the fact that the conclusion: "...whether the prize was awarded in cash or in kind, it follows from the general rules of law that prizes to be awarded in lotteries or contests must be publicly announced at their net value", as it is not anchored in any legal norm.
In the second place, it understands that there was an omission of prior hearing, insofar as issues were raised in the exercise of the right of hearing that were not taken into consideration, given the failure to notify the representative of the final inspection report. That is, it alleges that there was an omission of an essential formality.
In the third place, it alleges that there was a violation of the principle of good faith, cooperation and collaboration, as it made the payment of Stamp Duty in the amount of 50,858.64 euros, in accordance with article 43 of the Stamp Duty Code (CIS) and the tax return issued by a local service of the Tax and Customs Authority (AT) and subsequently additional tax was required based on a different calculation method, a circumstance which, in its judgment, should also lead to the annulment of the tax act.
In the fourth place, the Claimant understands that the subjective exemption provided for in article 6 of the CIS applies to it, with the AT itself supporting this interpretation in the draft corrections to the inspection report. Therefore, it alleges that this position is contradictory with the corrections and additional assessment.
It also argues that the tax is not exigible, as we are in the presence of a situation of tax substitution in which it must be the direct taxpayer who should bear the burden of the tax even though it does not make the payment. In its judgment, the institute of withholding at source presupposes the possibility of making deductions of certain amounts from patrimonial attributions, by applying rates provided by law, and thus we are in the presence of a mechanism that, by nature, can only function in the face of income with a nature coinciding with the means generically admitted for the payment of taxes – liquid monetary species. However, in the concrete case, we are only faced with goods in kind (automobiles) and, as such, incapable of withholding at source. Thus, because there is no place for withholding at source in the tax relationship object of the proceedings and because the Claimant adopted all the diligences that would be imputable – collection of Stamp Duty – it has no additional legal or tax responsibility or burden.
In the sixth place, it understands that there is an error in the quantification of the tax, as the AT considers that the value of acquisition of the automobiles is the net value, applying a formula to determine the gross value of the goods and to determine the Stamp Duty to be paid. The formula used and contained in circular notice no. 200067 – the gross value of the prize will equal the quotient of the net value by (1-applicable withholding rate), except if the value resulting from the application of the equivalence rules is superior, does not derive from law and only emerges from erroneous practice used by the AT.
In its judgment, prizes should be announced at their net value, as required by the principle of good faith, although it does not have the same consequences for cash prizes and for those in kind. In the case of prizes in kind, the paying entity should limit itself to identifying the prize and the Stamp Duty burden, as it violates the principle to announce for prizes a value lower than their real value.
In this context it further alleges that it recognizes having made reference in the competition regulation to the gross value of the goods of 305,454.50 euros, which exceeds the value of acquisition of the goods. Although, in its opinion, this interpretation does not bind it, as tax obligations do not arise from the declarations of the Claimant, but rather result from the law interpreted in accordance with the Constitution of the Portuguese Republic (CRP). Or, in other words, the net value of the goods should correspond to the value of the goods, from which the tax is deducted.
It further alleges that with this interpretation, the AT acts in violation of the principle of contributory capacity, provided for in articles 13, 103 and 104 of the CRP, as well as acts in violation of the principle of prohibition of confiscation, a corollary of the fundamental right of property and which is provided for in article 62 of our fundamental law. Therefore, it invokes the unconstitutionality of item 11.2 of the General Table of Stamp Duty (TGIS), according to which the rate applies to the value of prizes in kind, calculated on the gross value of the prize [equal to the quotient of the net value by (1-applicable withholding rate)], since the application of rates exceeding 80% results.
It concludes by arguing that no compensatory interest is due, as it merely followed the instructions of the General Secretariat of the Ministry of Internal Administration (MAI), and thus there was no reprehensible action susceptible to censure.
The Respondent defends itself in the following manner:
i) Omission of the right of hearing
It defends itself by alleging that the taxable person was notified to exercise the right of hearing on 12/01/2018, having exercised it on 29/01/2018. It also notes that: by analysis of the Inspection Report – pages 9 to 14 – it is evident that the matter alleged by the Claimant was analyzed and taken into consideration in the corrections made.
ii) Lack of substantiation
It alleges that the corrections made do not suffer from the defect of lack of substantiation, as it results clearly that the average person placed in the position of recipient is able to grasp its meaning.
Likewise, the Claimant understood the cognitive and evaluative path followed by the AT throughout the corrections and consequent additional assessment, such that the reasons that justified them were contested by the Claimant.
In sum, the factual and legal reasons that underpinned the corrections and additional assessment were grasped by the Claimant.
Concomitantly, as to the lack of legal substantiation and failure to notify the representative, not only is the legal ground article 9, paragraph 1 of the CIS and the principle of good faith would always be applied, but also the constitution of a representative only occurred at the time of exercise of the right of hearing, with the nature of the powers conferred having raised doubts.
However, even if this were not the case, it argues that formal defects do not necessarily impose the annulment of the act to which they relate and essential procedural formalities degrade to non-essential if, despite them, satisfaction was given to the interests of the taxpayer.
iii) Violation of the principle of good faith, collaboration and cooperation
In the view of the Claimant the General Secretariat of the MAI and the AT provided divergent information; however for the Respondent, as organs of the Public Administration, interpreted the rules of incidence, the subjects of the tax relationship, the competence for assessment and the persons on whom the burden of the tax fell in the same way. Therefore, it understands that the Claimant's claim should fail on this ground.
iv) Non-exigibility of Stamp Duty
The exemption contained in article 6, letter d) of the CIS cannot be applied, as although the Claimant is a private social solidarity institution, it is not the beneficiary of the prize, but merely the entity that assesses the tax that falls on that prize.
v) Error in the quantification of Stamp Duty;
Considering that the prize to be delivered to the beneficiary is advertised at its net value, it implies that, to obtain the value before the tax, we must divide the value to which the beneficiary is entitled by the complement of the tax rate. That is, the gross value (taxable), is calculated by adding to the net value the tax due.
The Claimant found the rate it invokes of 81.82%, by dividing the Stamp Duty due from the award of the ten automobiles of 113,549.56 euros, by the net value of the prizes of 138,782.80 euros. However, the tax rates (35% + 10%) apply to the taxable value, this is the gross value mentioned in the report and which consists of 252,332.36 euros.
vi) Whether the interpretation made by the AT regarding the value (gross) to be considered for assessment of Stamp Duty is unconstitutional, by violation of the principle of contributory capacity and prohibition of confiscation
The prize paid cannot fail to correspond to the net value, because that is what is actually delivered to the beneficiary and results from the law. As well, Stamp Duty does not take into account contributory capacity.
Therefore, there is no violation of the aforementioned constitutional principles.
vii) Compensatory interest
If the taxable person for reasons attributable to it delays the assessment of Stamp Duty, compensatory interest is due pursuant to the provision of article 35, paragraph 1 of the General Tax Law (LGT).
CASE MANAGEMENT
The arbitral tribunal was regularly constituted on the basis of articles 2, paragraph 1, letter a) and 10, paragraph 1 of RJAT, being competent to examine and decide on the request for arbitral ruling.
The parties, which are duly represented, have legal personality and capacity and have standing (articles 4 and 10, paragraph 2, of the same instrument and 1 of Ordinance no. 112-A/2011, of 22 March).
The proceedings do not suffer from nullities.
4. FACTS
4.1. Facts that are considered proven
4.1.1. The Claimant carries out activities relating to CAE 094995 and 072200 - "Other Associative Activities, N.E.C." and "Development of Social and Human Sciences".
4.1.2. The Claimant decided to conduct a draw (no. .../2016) with the sale of tickets, through which the following prizes were awarded: ten light passenger motor vehicles, of brand ... and model ..., at the net announced value for each of 16,800 euros - condition 7 of the ticket sale.
4.1.3. The number of tickets issued is 500,000 euros, with one-third of this value reverting as prizes – condition 3 of the ticket sale no. .../2016.
4.1.4. In condition 7 of the ticket sale no. .../2016 it is stated that the total gross value of the prizes is 305,454.50 euros, in which 35% + 10% Stamp Duty is applied, in accordance with items 11.2 and 11.2.2 of TGIS.
4.1.5. The draw took place on 21/04/2017.
4.1.6. The Claimant submitted on 19/10/2017 to the Finance Service of ... the withholding at source return for Stamp Duty, for the month of September 2017, in the amount of 50,858.64 euros.
4.1.7. The MAI informed the AT that no proof was made of the fulfillment of the obligation to pay Stamp Duty.
4.1.8. The AT initiated an inspection procedure and on 12/01/2018 notified the Claimant of a proposal for corrections in order to exercise the right of hearing.
4.1.9. The Claimant on 29/01/2018 exercised its right of hearing.
4.1.10. The AT maintained the corrections, notifying the Claimant of the final report on the basis of notice no. ... of 09/02/2018.
4.1.11. An additional assessment of Stamp Duty was issued in the amount of 62,756.38 euros.
4.1.12. The request for arbitral ruling was submitted on 02/07/2018.
4.2. Facts that are not considered proven
There are no facts with relevance for the arbitral decision that have not been given as proven.
4.3. Substantiation of the facts considered proven
The facts considered proven derive from the documents used for each of the alleged facts and whose authenticity was not called into question.
5. MATTER TO BE DECIDED
In this sequence, the following questions that the tribunal must examine are:
i) Whether there is an omission of the right of hearing;
ii) Whether the correction and the disputed assessment suffer from the defect of lack of substantiation;
iii) Whether there is a violation of the principle of good faith, cooperation and collaboration;
iv) Whether the assessed Stamp Duty is exigible;
v) Whether there is an error in the quantification of Stamp Duty;
vi) Whether the interpretation made by the AT regarding the value (gross) to be considered for assessment of Stamp Duty is unconstitutional, by violation of the principle of contributory capacity and prohibition of confiscation;
vii) Whether the compensatory interest assessed is due.
In this way, the petition presented by the Claimant imputes defects to the notification of the assessment of tax in question and subsequently defects to the assessment of tax itself.
Simplified (but not entirely accurately), one could argue that the first defects relate to formal aspects, whereas the violation of law imputed to the assessment constitutes a defect of a material nature. Regardless of this distinction, what appears decisive is to know to what extent it is useful in the present proceedings to know of other defects beyond the material defect, if it is concluded that this should be well-founded.
Nevertheless, the tribunal will pronounce itself on the defects pointed out, including the formal defects and defects of a material nature.
6. CONCERNING (i) LEGALITY OF THE ASSESSMENT IN QUESTION
6.1. The Claimant alleges, in the first place, that the additional assessment of Stamp Duty should be annulled, insofar as the final report of the tax inspection was not notified to its representative, a circumstance that determines the non-production of its legal effects and consequent invalidity of the consequent act – assessment of Stamp Duty.
The representative was constituted at the time of exercise of the right of hearing, which was submitted by the lawyer together with a power of attorney.
It is important to note both the provision of paragraph 1 of article 40 of CPPT, according to which notifications to interested parties who have appointed a representative shall be made to the representative and at its office, and letter e) of paragraph 1 of article 60 of LGT (right of hearing before the conclusion of the tax inspection report).
As noted by Counsel Lopes de Sousa, the provision of that paragraph 1 of article 40 of CPPT "applies to notifications to representatives both in tax proceedings and in tax judicial processes, as can be concluded from the heading of Section IV, 'Of procedural and legal acts' in which the norm is inserted." (Code of Tax Procedure and Process, Annotated and Commented, Vol. I, 6th ed., Áreas Editora, 2011, annotation 5 to article 40, p. 398.)
Thus, in the present case, the notification of the final inspection report should have been notified to the representative then already appointed by the Claimant. It was, however, at the time of exercise of the right of hearing that the Claimant appointed a representative, so the notification for exercise of the right of hearing was rightly addressed only to the taxable person, as on that date the Claimant had not yet appointed a representative: that is, the notification that should have been directed to the representative was only that of the final inspection report and not that intended to summon the taxpayer for the exercise of the right of hearing.
But the omission of a certain formality (including the omission of the right to a prior hearing itself) may be considered an omission of non-essential formality if it is demonstrated (an assessment dependent on the specific circumstances of each case) that, even without it having been complied with, the final decision of the procedure could not have been different (this is the consideration that underlies the principle of the utilization of administrative acts - cf. in this sense, among others, the judgment of STA, of 12/4/2012).
Now, in the case, what is not even in question is the omission of the right of hearing [The Claimant was notified to exercise the right of hearing (and exercised it) and, therefore, having been given this right before the conclusion of the inspection report, it would even be unnecessary to be heard again before the assessment, except if there were invocation of new facts regarding which the Claimant had not yet had the opportunity to pronounce itself] but only the omission of notification of the final inspection report to the representative appointed by the taxpayer, who was nevertheless notified to the Claimant and the Claimant itself does not question having been (to it) notified.
Hence, in accordance with and citing the provision of the Judgment of STA, 01094/12, dated 02/19/2014, (i) considering that what are at issue are merely technical corrections and that, therefore, the taxpayer could not claim or directly contest the content of such report (unlike what would occur if it were a matter of determining taxable profit by indirect methods, in which it could formulate, under article 91 of LGT, a request for revision of the taxable matter); (ii) considering that no deadline results from notification of the final report to claim, contest or react in any way (such deadline only begins with notification of the assessment and the action inspection report); (iii) and considering that the compliance with the omitted formality (notification of the report to the representative, instead of the notification made to the taxpayer) would in no way alter the content of the tax act (assessment), which would always have the same content; (iv) it must be concluded that the omission of such formality does not constitute a directly harmful act, there having been only an omission of formality that was degraded to non-essential, that is, it must be concluded that we are faced with a mere irregularity.
Therefore, the failure to notify the representative followed by the non-notification for a new exercise of the Right of Hearing does not constitute an omission of essential formality, but rather an irregularity remedied by the subsequent exercise of the right of defense of the Claimant.
Therefore, the Claimant's claim does not succeed on this point.
6.2 In the second place, it understands that there was an omission of prior hearing, insofar as issues were raised in the exercise of the right of hearing that were not taken into consideration, given the failure to notify the representative of the final inspection report. That is, it alleges that there was an omission of an essential formality.
Article 60 of LGT, under the heading "Principle of participation", provides as follows:
"1 - The participation of taxpayers in the formation of decisions that concern them may be effected, whenever the law does not provide otherwise, by any of the following forms:
a) Right of hearing before assessment;
b) Right of hearing before the complete or partial dismissal of requests, complaints, appeals or petitions;
c) Right of hearing before the revocation of any benefit or administrative tax act;
d) Right of hearing before the decision to apply indirect methods, when there is no inspection report;
e) Right of hearing before the conclusion of the tax inspection report.
2 - Hearing is dispensed with:
a) In the event that the assessment is made on the basis of the taxpayer's declaration or the decision on the request, complaint, appeal or petition is favorable to it.
b) In the event that the assessment is carried out ex officio, on the basis of objective values provided by law, provided that the taxpayer has been notified to present the missing declaration without having done so.
3 - Having the taxpayer been previously heard in any of the phases of the procedure referred to in letters b) to e) of paragraph 1, its hearing before assessment is dispensed with, except in case of invocation of new facts on which it has not yet pronounced itself.
4 - The right of hearing must be exercised within the period set by the tax administration in a registered letter sent for that purpose to the tax domicile of the taxpayer.
5 - In any of the circumstances referred to in paragraph 1, for purposes of exercising the right of hearing, the tax administration must communicate to the taxable person the draft decision and its substantiation.
6 - The period for the exercise orally or in writing of the right of hearing cannot be less than 8 or more than 15 days.
7 - The new elements raised in the hearing of taxpayers are necessarily taken into account in the substantiation of the decision".
The Respondent defends itself by alleging that by analysis of the Inspection Report – pages 9 to 14 – it is evident that the matter alleged by the Claimant was analyzed and taken into consideration in the corrections made.
The Respondent presented the Inspection Report together with the administrative proceedings, in its Response of 15/10/2018, and the final Report, pages 9 to 14, contemplates the analysis of the facts and grounds alleged by the Claimant in the Right of Hearing, and should therefore be considered proven the consideration of these same facts in the final decision of the Tax Inspection and the claim of the Claimant to fail on this point.
6.3 In this sequence, it argues that: in the absence of notification, there was also a lack of substantiation of the tax act which determines its annullability.
This lack of substantiation equally derives from the fact that the conclusion: "...whether the prize was awarded in cash or in kind, it follows from the general rules of law that prizes to be awarded in lotteries or contests must be publicly announced at their net value", as it is not anchored in any legal norm.
Citing the Judgment of STA in case 01255/16 dated 11/08/2017 we can say that the legal duty of substantiation of the administrative act fulfills a dual function: endogenous, by requiring the decision-maker to express the reasons and criteria determining the decision, thereby contributing to its consideration and transparency; exogenous, by allowing the recipient of the act an informed choice between conformity and gracious or contentious impugnation (cf. the judgment of this STA, of 2/2/2006, case no. 1114/05). Hence, that substantiation must be contextual and integrated in the act itself (even though it can be so in a remissive manner), expressed and accessible (through a brief exposition of the factual and legal grounds of the decision), clear (so as to allow, through its terms, the facts and the law on the basis of which the decision is made to be grasped with precision), sufficient (allowing the recipient of the act concrete knowledge of its motivation) and congruent (the decision should constitute the logical and necessary conclusion of the reasons invoked as its justification), being equivalent to lack of substantiation the adoption of grounds which, by obscurity, contradiction or insufficiency, do not specifically clarify the motivation of the act. Note that formal substantiation of the tax act is distinct from so-called substantive substantiation, which should express the real verification of the factual presuppositions invoked and the correct interpretation and application of the norms indicated as legal ground.
Specifically, also the decision in the matter of tax procedure requires a brief exposition of the factual and legal reasons that motivated it, and this substantiation may consist of mere declaration of concordance with the grounds of previous opinions, information or proposals, including those integral to the tax inspection report, and must always contain the applicable legal provisions, the qualification and quantification of the tax facts and the operations for determining the taxable matter and the tax (cf. article 77 of LGT), having constitutional adequacy the substantiation that respects the mentioned principles of sufficiency, clarity and congruence and which, on the other hand, is contextual or contemporaneous with the act, not relevance to substantiation made a posteriori (cf. the judgments of STA, of 26/3/2014, case no. 01674/13 and of 23/4/2014, case no. 01690/13).
It is further added that the characteristics required for the formal substantiation of the tax act are distinct from those required for so-called substantive substantiation: this must express the real verification of the factual presuppositions invoked and the correct interpretation and application of the norms indicated as legal ground.
In sum, pursuant to the provision of article 77 of LGT, the procedural decision must be substantiated by means of a brief exposition of the factual and legal reasons that motivated it, substantiation being able to consist of mere declaration of concordance with the grounds of previous opinions, information or proposals, including those that form part of the tax inspection report.
Pursuant to paragraph 2 of that article the substantiation of tax acts may be effected summarily, and must always contain the applicable legal provisions, the qualification and quantification of the tax facts and the operations for determining the taxable matter and the tax.
In accordance with article 125, paragraph 1 (currently article 152) of CPA, substantiation must be expressed, through a brief exposition of the factual and legal grounds of the decision, and may consist of mere declaration of concordance with the grounds of previous opinions, information or proposals, which will constitute in this case an integral part of the respective act, being equivalent to lack of substantiation the adoption of grounds which, by obscurity, contradiction or insufficiency, do not specifically clarify the motivation of the act.
Substantiation is sufficient when it provides to the recipients of the act the reconstitution of the cognitive and evaluative itinerary followed by the authority that carried out the act, so that it can be clearly known the reasons why it decided as it decided and not differently.1 [Judgment of STA, of 2009.04.15, handed down in case no. 065/09, available at www.dgsi.pt].
Now, in the case at hand, the Inspection Report contains all the factual framework of the situation object of the additional assessment of SD, the legal basis that supports it as well as the corrections made including the determination of the tax responsible, the incidence base of the tax, the assessment process and also the calculation of the tax value.
From the review of procedural documents carried out above it is essential to conclude that there are no doubts that the Claimant had the possibility of knowing the factual and legal reasons that are the basis of the presuppositions on which the assessment of the SD in question is based and also of knowing the cognitive and evaluative itinerary of whoever made such decision.
Had the opportunity to participate, and did participate, in the inspection procedure.
There is, therefore, no obscurity, contradiction or insufficiency in the exposition of the factual and legal grounds of the contested act, which does not suffer from lack of substantiation.
The tribunal understands that the cited elements are sufficient for the taxpayer to know the reason for the disputed assessment, its scope and nature, whereby it concludes that the legal requirements of substantiation provided for in article 77 of the General Tax Law (LGT) and article 37 of CPPT were fulfilled.
The Claimant's claim failing on this point.
6.4 The Claimant alleges that there was a violation of the principle of good faith, cooperation and collaboration, as it made the payment of Stamp Duty in the amount of 50,858.64 euros, in accordance with article 43 of the Stamp Duty Code (CIS) and the tax return issued by a local service of the Tax and Customs Authority (AT) and subsequently additional tax was required based on a different calculation method, a circumstance which, in its judgment, should also lead to the annulment of the tax act.
The Claimant is a taxable person for Stamp Duty purposes in accordance with paragraph 1, letter p) of article 2 of the CIS.
In accordance with article 23, paragraph 1 of the CIS the assessment of the tax is the responsibility of the taxable person.
In accordance with the provisions of articles 2, paragraph 1, letter p), 23, paragraph 1, 41, 43 and 44, paragraph 1, all of the CIS, the delivery of the assessed tax is made by the 20th day of the month following the one in which the tax obligation was constituted through the withholding at source return for IRS/IRC and Stamp Duty, item 311, "SD - Gaming".
The payment return, which is extracted from the internet, on the Finance portal, was presented by the Claimant to the Collection Section of the Finance Service of ..., for collection of the tax, it not being the FS but rather the Claimant that assessed the tax. The FS merely collected it, since, in accordance with paragraph 1 of article 23 of the CIS, it is to the Claimant that assessment of the tax falls, in its capacity as a taxable person, in accordance with letter p) of paragraph 1 of article 2 of the CIS.
The tax was, voluntarily, delivered to the State Treasury, on 19.10.2017, and was calculated by the Claimant and not by the Tax Services.
According to the Inspection Report, to determine the tax to be paid the Claimant considered the value of the proforma invoice no. 1/9 of 12.10.2017, issued by the supplier B..., Ltd., TIN..., in the amount of € 11,301.92 (copy of the invoice fl. 11 of the inspection proceedings), multiplied by 10 (number of automobiles drawn), finding the taxable value of € 113,019.20.
The stamp duty determined results from the cumulative application of the tax rates, provided for in items 11.2 and 11.2.2 (10% + 35%), to that taxable value, that is, 45% x € 113,019.20 = € 50,858.64.
The Claimant neither justifies nor substantiates the basis for its calculation and determination of the SD, in any norm, regime or tax information.
The Claimant considers that there was a violation of the principle of cooperation provided for in article 60 of the Code of Administrative Procedure because the AT and the General Secretariat of the MAI allegedly provided divergent information.
Here too the Claimant is not right, as both organs of the Public Administration interpreted the rules of incidence, the subjects of the tax legal relationship, the competence for assessment, and persons on whom the burden of the tax fell, in the same way.
The Claimant, in the request it addressed to the Ministry of Internal Administration for the conduct of a competition (Doc. 3) announced the prizes to be awarded at the total net value of € 168,000.00 and the total gross value of € 305,454.50 informing that, in this total gross value, the value of SD of 35%+ 10% was already included.
However, it went on to assess the SD in the Payment Return for a completely different amount.
In this way, the General Secretariat of the MAI communicated to the AT the lack of proof of delivery of Stamp Duty, on the part of A... (communication fl. 2 of the inspection proceedings), because it understood that it was this entity that was competent for its assessment (determination) and delivery to the State Treasury, having not requested proof of payment from the beneficiaries of the prizes of the draw.
Therefore, the Claimant is not right on this point.
6.5 The Claimant understands that the subjective exemption provided for in article 6 of the CIS applies to it, with the AT itself supporting this interpretation in the draft corrections to the inspection report. Therefore, it alleges that this position is contradictory with the corrections and additional assessment.
The tribunal does not detect in the draft corrections any endorsement by the AT of the application of this exemption to the Claimant.
Article 6 of the Stamp Duty Code lists the personal scope of subjective exemptions:
The following are exempt from stamp duty, when it constitutes their burden:
a) The State, the Autonomous Regions, local authorities and their associations and federations of public law and any of their services, establishments and bodies, even if separately constituted, including public institutes, which do not have an entrepreneurial character;
b) Social security institutions;
c) Legal entities of public administrative utility and of mere public utility;
d) Private social solidarity institutions and entities legally equated to these;
In the case of competitions the burden of SD falls on the holder of the economic interest who, in the case of draws, is the beneficiary of the prize – article 3, paragraph 1 and paragraph 3 letters c) and t) of the CIS.
the birth of the tax obligation occurs at the moment when the organizing entity incurs the obligation/burden arising from having to grant a certain prize in accordance with the regulation of the competition and, as a consequence, to make the beneficiary the holder of a right/credit, independently of whether it is identified or will collect the prize, as is sustained in the law and on the basis of Binding Information no. 1492.
Subsequently, it is incumbent on the taxable persons to assess and deliver the tax (articles 23, paragraph 1 and 41) through the withholding at source return for IRS/IRC and SD, and they must do so by the 20th day of the month following the one in which the tax fact occurred.
The taxable person is the entity that organizes the competition, in this case the Claimant.
Although the taxable person is responsible for assessing the tax and corresponding delivery to the State Treasury, it is not on it that the burden of the tax falls.
In fact, the burden falls on the holder of the economic interest who, in the case of draws, is the beneficiary of the prize – article 3, paragraph 1 and paragraph 3 letters c) and t) of the CIS.
Transposing these notions to the case in question we have as beneficiaries those to whom each of the ten drawn cars was awarded, and as taxable person the Claimant on whom the obligation to determine the tax and deliver it rests.
Which means that the exemption contained in article 6 of the CIS (assuming the Claimant refers to letter d) of that norm) cannot be applied to it, as although it is a private social solidarity institution, it is not the beneficiary of the prize, but merely the entity that assesses the tax that falls on that prize.
The interpretation by the Claimant of the aforementioned Binding Information is erroneous for it says precisely the opposite, what it makes explicit is that, when a prize was awarded but was not claimed by the person who received it (direct beneficiary), within the period stipulated in the Draw Regulation, and the prize comes, once the situation has been communicated to the Civil Governor, and by his determination, to have another destination, such as reversal to institutions with social purposes (humanitarian, assistance), the new beneficiary (mediate beneficiary), does not see the burden of the tax fall on it, because the tax must be assessed and immediately by the organizing entity, as soon as it recognizes the obligation to grant a certain prize.
That is, the aforementioned binding information does not transfer the position of the person who bears the burden of the tax, but merely reinforces the interpretation that even in a scenario of non-collection of the prize, there is an obligation to assess the tax on the part of the entity organizing the draw, which assumes the position of taxable person.
Therefore, the Claimant's claim does not succeed.
6.6 It further argues that the tax is not exigible, as we are in the presence of a situation of tax substitution in which the direct taxpayer must bear the burden of the tax even though it does not make the payment.
In its judgment, the institute of withholding at source presupposes the possibility of making deductions of certain amounts from patrimonial attributions, by applying rates provided by law, and thus we are in the presence of a mechanism that, by nature, can only function in the face of income with a nature coinciding with the means generically admitted for the payment of taxes – liquid monetary species. However, in the concrete case, we are only faced with goods in kind (automobiles) and, as such, incapable of withholding at source. Thus, because there is no place for withholding at source in the tax relationship object of the proceedings and because the Claimant adopted all the diligences that would be imputable – collection of Stamp Duty – it has no additional legal or tax responsibility or burden.
Withholding at source is a mechanism for anticipating tax collection.
This mechanism is the form provided under various taxes, namely IRS and IRC, for the AT to collect the tax ultimately due. In the case of IRS, withholding at source on income in kind has always been provided for in the respective Code, with exemption from that withholding being established in certain situations.
Only with the reform of the CIRS dated 2015 is a general rule of exemption from withholding at source on dependent work income – article 99, paragraph 1, letter a) – being established, maintaining the general rule of withholding at source applicable to other types of income, namely from independent work and capital, whether paid in cash or in kind.
It is true that withholding at source on income in kind raises operational doubts that are not resolved or sufficiently clarified by the AT.
However, it is not admissible to conclude from the impossibility of carrying it out.
In the specific case of SD on prizes we will have to first verify whether in the case in question we are faced with a situation of tax substitution, or not.
Under article 20, paragraph 1 of LGT tax substitution occurs when, by imposing the law, the tax obligation is demanded from a person other than the taxpayer. The legislator when referring to the concept of "taxpayer" is alluding to the one in relation to whom the presuppositions contained in the rule of incidence of the tax were verified. Citing Dr. Diogo Feio "This institute is embodied in the fact that the taxpayer who carries out the tax fact does not occupy in the relationship in question the position that would normally be his".
Substitution is effected through the mechanism of withholding at source (article 20, paragraph 2 of LGT).
In the case in question, under article 2, paragraph 1, letter p) of the CIS the taxable person is the Claimant. However, the one who bears the burden is the person awarded the prize (article 3, paragraph 1 and paragraph 3, letter t) of the CIS).
The mechanism of tax substitution is distinct from the mechanism of tax shifting. "Thus, although, at least at first, the substitute and the actual taxpayer are entities that bear the loss of assets in which the tax is embodied (...), the substitute is a taxpayer of law, that is liable for the tax, while the actual taxpayer is completely alien to the tax legal relationship, is not, (...) a liable party" (In Manuel Henrique de Freitas Pereira, Fiscal Law, 3rd Ed., Almedina, 2009, Page 272).
Shifting occurs outside the scope of the tax obligation and that is why under article 18, paragraph 4, letter a) of LGT the shifted are not liable parties. Shifting occurs when the subject covered by the rules of incidence of the tax transfers to another the economic burden.
In the case in question the legislator expressly provided the Claimant as the liable party and provided that the tax would be a burden of the holder of the economic interest, that is, of the person awarded the prize. Thus, the person awarded the prize is the shifted, not being a liable party.
Within the scope of the CIS the beneficiary or person awarded the prize is outside the legal relationship of the tax because it is not a liable party, nor responsible for its payment. The beneficiary is responsible for bearing the burden, without having the quality of a debtor.
The only party responsible for compliance with the obligation is the liable party (article 41, paragraph 1 and 23 of the CIS), the person awarded the prize being relieved of any responsibility, principal or accessory.
Regarding the qualification of the one who bears the burden of Stamp Duty, citing Silvério Mateus and Corvelo Freitas "these persons, notwithstanding bearing, by shifting, the burden of the tax, do not have the quality of liable parties, not being, consequently, subject to any obligation of a tax nature."
"The case of stamp duty is even more singular, as the law defines that liable parties are those to whom the law assigns the obligation to assess and pay the tax to the State (article 2 of the CIS), but imposes legal shifting by saying that the burden is of the entity with economic interest in the tax reality (article 3), which normally does not coincide with the liable party."
On the qualification of the interveners in Stamp Duty, the Administrative Court of the Supreme Court, in case no. 04457/11, by Judgment of 30/04/2013, made the following decision:
"2. Tax shifting of the tax is verified, given that the subject directly determined by law to pay the tax is not truly the holder of the wealth to be taxed, but merely a subject on whom it is easier to effect collection."
In this way, the Claimant is solely responsible for the SD due by assessment made by the liable party or additional assessment made by the AT.
And the way of retaining and delivering the SD, in accordance with the respective assessment process is similar to that which had already been applied when prizes from draws, in cash or in kind, were subject to taxation as patrimonial increment.
Looking back at the history of taxation of these prizes let us see:
The gains arising from "gaming" were, until the entry into force of the Income Tax Code, approved by Decree-Law no. 442-A/88, of 30 November, taxed under the Stamp Duty then in effect (Regulations of Stamp Duty, approved by Decree-Law no. 12,700, of 20 November 1926, and Table approved by Decree no. 10,039, of August 1924, instruments that were subject to numerous amendments throughout their existence).
Article 134 of the Stamp Tax Table referred, at the time of entry into force of the CIRS, to "Prizes of lotteries, raffles and mutual betting" 11 and article 134-A of the same Table, to "Prizes in television contests" 12. Article 134 of the Stamp Tax Table was abolished by article 3 of Decree-Law no. 442-A/88, of 30/11, which approved the Income Tax Code, with the original wording of this instrument coming to provide, in article 12, "Are included in category I the gains paid or made available derived from any lotteries, raffles and mutual betting, and also those derived from lotto and bingo games".
After Law no. 101/89, of 29 December, article 12 of the CIRS came to say: "Included in category I: a) The gains paid or made available derived from any lotteries, raffles and mutual betting and also those derived from lotto and bingo games; b) The amounts or prizes awarded in any draws or contests."
With this new wording, all amounts or prizes awarded in any draws or contests were covered by category I 13, with article 134-A of the Stamp Duty Tax Table being revoked by Decree-Law no. 205/90, of 25 June.
The integration in category I of "gains derived from gaming", understood as those derived from an act or activity from which income attributable to the factor "luck" can objectively (independently of the will of the agent) result, derived from the income-increase concept underlying the reform of taxation of income. Given the nature of this income, the total amount of the prize (or its counter-value in escudos when awarded in kind), did not admit any deductions and taxation was carried out at the liberating rate of 25%, under the terms of letter c) of paragraph 1 of article 74 of the Code.
Following the amendments to the Reform then carried out, and in the exercise of the legislative authorization granted by article 17 of Law no. 30-G/2000, of 29/12, Decree-Law 198/2001, of 3 July, proceeded to the revision of the CIRS, CIRC and EBF, gains with gaming were then included in category G, as patrimonial increments (article 9 of CIRS).
Paragraph 2 of article in article 9 of the CIRS provided then: "2 - Are also considered patrimonial increments the prizes of any lotteries, raffles and mutual betting, totoloto, lotto and bingo games, as well as the amounts or prizes awarded in any draws or contests, actually paid or made available".
This provision, which was further subject to successive minor amendments, said when revoked: "2 - Are also considered patrimonial increments the prizes of any raffles, lotto game and bingo, as well as the amounts or prizes awarded in any draws or contests, actually paid or made available, with the exception of prizes derived from social games organized by member states of the European Union or the European Economic Area provided that, in this case, there is exchange of information." (wording given by article 2 of Decree-Law no. 175/2009, of 04/08, in force from 01/09/2009). 15
Payment was made by withholding at source through a liberating rate (article 71, paragraph 2, letters b) and f), of the Income Tax Code)
Therefore, the Claimant is not right on this chapter of its argument.
6.7 It understands that there is an error in the quantification of the tax, as the AT considers that the value of acquisition of the automobiles is the net value, applying a formula to determine the gross value of the goods and to determine the Stamp Duty to be paid. The formula used and contained in circular notice no. 200067 – the gross value of the prize will equal the quotient of the net value by (1-applicable withholding rate), except if the value resulting from the application of the equivalence rules is superior, does not derive from law and only emerges from erroneous practice used by the AT.
In its judgment, prizes should be announced at their net value, as required by the principle of good faith, although it does not have the same consequences for cash prizes and for those in kind. In the case of prizes in kind, the paying entity should limit itself to identifying the prize and the Stamp Duty burden, as it violates the principle to announce for prizes a value lower than their real value.
In this context it further alleges that it recognizes having made reference in the competition regulation to the gross value of the goods of 305,454.50 euros, which exceeds the value of acquisition of the goods. Although, in its opinion, this interpretation does not bind it, as tax obligations do not arise from the declarations of the Claimant, but rather result from the law interpreted in accordance with the Constitution of the Portuguese Republic (CRP). Or, in other words, the net value of the goods should correspond to the value of the goods, from which the tax is deducted.
It further alleges that with this interpretation, the AT acts in violation of the principle of contributory capacity, provided for in articles 13, 103 and 104 of the CRP, as well as acts in violation of the principle of prohibition of confiscation, a corollary of the fundamental right of property and which is provided for in article 62 of our fundamental law. Therefore, it invokes the unconstitutionality of item 11.2 of the General Table of Stamp Duty (TGIS), according to which the rate applies to the value of prizes in kind, calculated on the gross value of the prize [equal to the quotient of the net value by (1-applicable withholding rate)], since the application of rates exceeding 80% results.
Also on this point the Claimant is not right. Let us see:
Traveling again to the genesis of this taxation in the CIRS, early in the application of the CIRS it was clarified by the Income Tax Administration Services (SAIR), in Circular Notice no. 8/92, of 16 April, that:
- in prizes awarded in kind their gross value could never be less than what would result from the application of the equivalence rules established in article 23 of the Income Tax Code;
- the gross value of prizes awarded in kind would be equal to the result of dividing the net value by 0.75, except when the value resulting from the application of the equivalence rules already referred to was superior.
This guidance was maintained and updated in a dispatch of the State Secretary for Tax Affairs no. 332/2002, disclosed by DGCI through Circular Notice no. 20067, of 9 April 2002. Paragraph 5 of the aforementioned circular was very clear in the sense that, whether in the case of award of a prize in cash or in kind, it follows from the general rules of law that prizes to be awarded in draws or contests "must be publicly announced at their net value. Thus, the gross value of the prize will equal the quotient of the net value by (1 - applicable withholding rate), except if the value resulting from the application of the equivalence rules is superior".
The application of this administrative guidance was generally followed. Consider, in particular, the substantiation contained in the Judgment of the Tax Contention Section of the Supreme Court, handed down in case no. 0498/06, on 3 July 2007, which, accepting the interpretation of the Tax Authority decided (synthesis and underlined ours):
• Being in question income subject to taxation under CIRS (first as category I then as G) paragraph 2 of its article 1 subjects both income in cash and income in kind, whose value is possible to know;
• According to the then provision of paragraph 1 and letter b) of paragraph 2 of article 74 of the CIRS and letter a) of paragraph 2 of article 94 of the CIRS, taxation of such income occurs by withholding at source as final title with liberating character, by the entity owing such income;
• The guidance given by the Tax Authority for the taxation of this income is not merely limited to withholding at source because, in addition to requiring that the entity owing the income not merely proceed to an allocation of a part of the income awarded to the taxpayer, it imposes that the company organizing the competition proceeds, at the time of payment of prizes in kind, to a fictitious increase to the respective cost of acquisition thereof, an increase that will correspond to the value of the tax.
• But it is not for this reason that one cannot speak of withholding at source since what is merely required of the entity organizing the competitions is that it deliver to the State Treasury the tax corresponding to the prize awarded, calculated by applying the applicable rate to its value;
• Only that, as the prize paid cannot fail to correspond to the net value of IRS, because that is what is actually delivered to the beneficiary, it becomes necessary to determine the gross income subject to tax and that is what the TA intended to do through the circular notice cited, which merely clarifies in practice what already results from the law, without any innovative character, whereby there is no violation of the principle of tax legality.
After the aforementioned legislative amendments, occurring in 2010 – replacement of taxation of prizes awarded in competitions, previously covered by IRS and now subject to Stamp Duty incidence – the Tax Authority came to clarify doubts arising as to the determination of the taxable value in cases of payment of prizes in kind. It then reiterated, in two binding information notices (nos. 1233 and 1492, cited in the proceedings by the AT), handed down respectively in Cases nos. 2010...-IVE 1233 and 2010...-IVE 1492 both dispatched on 31.01.2011, the understanding as to the manner in which the amount of the tax is determined. Thus:
• The amounts of the prizes must be announced net of taxes, so that, independently of the rate, the beneficiary always receives the prize for the announced amount, the understanding expressed by DGCI in its Circular Notice no. 20067, of 09.04.2002, of DSIRS being maintained: "Whether the prize is awarded in cash or in kind, it follows from the general rules of law that prizes to be awarded in draws or contests must be publicly announced at their net value" (Circular Notice no. 8/92 of 16.04.1992, now revoked, had already sanctioned equal understanding);
• As to the formula for calculating the Stamp Duty to be paid: the gross value of the announced prize will equal the quotient of: net value / (1 - the applicable withholding rate), that is, net value /1 - 0.25; 0.35 or 0.45 depending on the type of game and whether the prize is paid in cash or kind;
• If the prize is in kind, its net value will correspond to the price that the promoter paid for the good, including the non-deductible taxes that fell on it, namely VAT.
In the case of prizes from draws in kind, the amounts of the prizes must be announced net of taxes so that, independently of the rate, the beneficiary always receives the prize for the announced amount, whether the prize is awarded in cash or in kind (point 5 of Circular Notice no. 20067, of 09.04.2002, of DSIRS).
The prizes awarded in the draw are 10 automobiles, therefore prizes in kind, their net value corresponds to the price that the promoter paid for the goods, including the non-deductible taxes that fell on it, namely VAT, as can also be seen from the reading of Binding Information 2010...-IVE 1233, of 2011-01-31, of DGI, in its point no. 2 of Chapter VI.
From the analysis of the 10 invoices for acquisition of the goods drawn, a net value of the individual prize of 13,886.28 Euros results, that is, a total net value of 138,862.80 Euros, in accordance with the vehicle invoices which were attached to the proceedings.
Under article 3, paragraph 3, letter t), of the Stamp Duty Code, the tax constitutes a burden of the beneficiaries of prizes of bingo, raffles and lotto games, as well as any prizes of draws or contests, although the liable parties of the tax relationship are, under article 2, paragraph 1, letter p), the entities that grant the prizes of bingo, raffles and lotto game, as well as any prizes of draws or contests, without prejudice to having to assess and deliver the tax in obedience to article 23 of the CIS.
The obligation to assess and deliver Stamp Duty to the State Treasury is incumbent on the entity that grants the prize under letter p), paragraph 1 of article 2 of the CIS, in the case the Claimant, the entity that granted the prizes of the national draw no. 29/2016.
Thus, and in accordance with what has been stated, the tax rate applies to the gross value of the prize. In turn, this gross value of the prize results from the quotient between the net value and one minus the applicable withholding rate (35% plus 10% because they are prizes in kind), resulting in the total gross value of 252,477.82 Eur., so determined (point 5 of Circular Notice no. 20067, of 09.04.2002, of DSIRS):
In this way the Stamp Duty due from the award of the 10 automobiles in the draw is 113,615.02 Eur., calculated by applying the tax rates of items 11.2 and 11.2.2, to the taxable value of 252,477.82 Eur, that is (35% + 10%) x 252,477.82 Eur.
Now the Claimant incorrectly calculated the SD because it used for taxable value the net value, when the SD must be assessed by applying the rates of item 11.2 to the gross value of prizes in kind (automobiles), the acquisition value of each of the 10 vehicles being 13,886.28 Euros.
In light of the foregoing, the Claimant did not properly assess the SD in accordance with the legal norms and circular law that aid in the interpretation and application thereof, there being no other more appropriate legal solution: Stamp Duty in arrears.
6.8 It concludes by arguing that no compensatory interest is due, as it merely followed the instructions of the General Secretariat of the Ministry of Internal Administration (MAI), and thus there was no reprehensible action susceptible to censure.
The assessment of compensatory interest is based on the assessment of Stamp Duty (article 35 of LGT).
As understood in the judgment of the Supreme Administrative Court of 23-09-1998, and is settled case law ():
"Compensatory interest is intended to compensate or indemnify the tax creditor for the presumed loss suffered from the delay in the entry of the tax into its patrimonial sphere.
The responsibility for payment of compensatory interest depends on the existence of a tax debt, the existence of a delay in the carrying out of an assessment of tax, and the imputability of this delay to the action of the taxpayer.
This imputability requires the existence of a causal nexus between the action of the taxpayer and the delay referred to and the possibility of formulating a judgment of censure against the action of the taxpayer (culpability)".
In the case in question, the Tax and Customs Authority imputes to the Claimant facts that configure all the requirements for the application of compensatory interest.
Now responsibility for compensatory interest depends, therefore, on an adequate causal nexus between the delay in assessment and the action of the taxpayer, as well as the possibility of formulating a judgment of censure against its action (by way of intent or negligence).
In the present case there does not appear to necessarily exist such a nexus. In fact, the solution to the question of incidence and calculation of SD in the case of prizes in kind within competitions is not, after all, clear, in light of the letter of the law, hence the necessity of circular law and procedures in the framework of requests for binding information that aid in the application of these norms of the CIS. Moreover, there is no settled case law in the sense defended by the Tax and Customs Authority. It is further added that the Claimant also relied on the acceptance of the SD assessment by the Internal Administration, which occurred at least at first. Whereby, the mere fact that the Claimant defends the interpretation of the law it considers appropriate cannot merit a judgment of censure.
Therefore, the Claimant's claim succeeds on this matter.
7. DECISION
In accordance with what has been stated, the Arbitral Tribunal agrees:
a) To dismiss the request for arbitral ruling as to the declaration of illegality of the Stamp Duty assessment no. 2018..., maintaining it in the legal order;
b) To uphold the Claimant's request for annulment of the compensatory interest assessed; and
c) To condemn both parties to the costs of the proceedings in the proportion rounded to their respective defeats, that is, 2.8% to the charge of the Tax and Customs Authority and 97.2%, to the charge of the Claimant.
8. VALUE OF THE PROCEEDINGS
In accordance with the provision of article 305, paragraph 2, of the Code of Civil Procedure and 97-A, paragraph 1, letter a), of the Tax Procedure Code and 3, paragraph 2, of the Regulations of Costs in Tax Arbitration Proceedings the value of the proceedings is fixed at €64,449.70.
9. COSTS
Under article 22, paragraph 4, of RJAT, the amount of costs is fixed at € 2,448.00, under Table I attached to the Regulations of Costs in Tax Arbitration Proceedings, to the charge of both parties in the proportion defined above.
Lisbon, 10-04-2019
The President Arbitrator
(José Poças Falcão)
The Arbitrator Member,
dissenting as to the request for annulment of compensatory interest, as per the statement attached,
(Francisco Nicolau Domingos)
The Arbitrator Member
(Ana Teixeira de Sousa)
DISSENTING OPINION
I dissent on the question of the annulment of the assessment of compensatory interest, for which reason it is necessary to describe the grounds that would justify a different decision.
Article 35, paragraph 1 of the General Tax Law (LGT) provides that: "1 – Compensatory interest is due when, by fact attributable to the taxable person, the assessment of part or all of the tax due or the delivery of tax to be paid in advance, or withheld or to be withheld within the scope of tax substitution, is delayed."
Compensatory interest assumes the nature of civil reparation and, consequently depends on the delay in assessment and the action of the taxpayer. Or, in other words, its purpose consists in the reparation of the losses suffered by the State with the delay in tax assessment.
Thus, in theory, there will be culpability of the taxable person when its action meets a tax infraction. However, compensatory interest may not even be due, when it is possible to exclude culpability.
Moreover, doctrine sustains that: "It is, therefore, a presupposition that the taxpayer – which is not merely the legal one, being able to be, within the scope of the duties of withholding and delivery that are legally committed to it, the tax substitute – has not acted with normal diligence in the fulfillment of its tax obligations, as highlighted by the Judgment of the Supreme Administrative Court of 29 January 1992, in case number 13671. These obligations are not merely declarative, being able to consist in the delivery of the tax to the State Treasury as withholding at source or payment on account or following its assessment to third parties, as is the case of VAT and various items of the General Table of Stamp Duty".
Therefore, they will only be exigible in those cases in which it is possible to formulate a judgment of censure – culpability – regarding the action of the taxable person.
It happens that, in the concrete case it is certain to formulate this judgment of culpability, for at the time of the decision to conduct the draw there was already arbitral case law regarding the essential question (error in the quantification of Stamp Duty) different from that which supports the claim of the claimant, for example the arbitral decision no. 229/2013-T, of 8 April 2014 and the arbitral decision no. 30/2013-T, of 29 October 2013 which, in essence, interpret item 11.2 of TGIS in a manner similar to that which prevailed in this tribunal.
In summary, if this is so, the conduct of the Claimant is censurable and as such the assessment of compensatory interest should have been maintained in the legal order.
The Arbitrator,
Francisco Nicolau Domingos
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