Summary
Full Decision
Arbitral Award
The arbitrators Counselor Dr. Fernanda Maçãs, arbitrator-president, Professor Dr. Rui Morais and Dr. João Menezes Leitão, arbitrators-members, who constitute the present Arbitral Court, agree:
Report
A...– Branch in Portugal, tax identification number..., domiciled at ..., ..., ..., ..., ...-... Lisbon (hereinafter referred to as "Claimant"), a branch of B..., with registered office in Madrid, Spain (hereinafter briefly referred to as "B...– Spain") filed a request for arbitral ruling, in accordance with the provisions of article 4 and paragraph a) of article 10(1) of Decree-Law No. 10/2011, of 20 January, as amended (Legal Framework for Tax Arbitration, hereinafter LFTA), in which the Tax and Customs Authority (hereinafter referred to as "Respondent") is requested, with a view to annulling the implied rejection of the administrative claim filed against the self-assessment of the contribution on the banking sector (hereinafter briefly referred to as "CSB") No. ..., in the amount of €1,183,947.87, requesting the annulment of the contested self-assessment, the refund of the amount unduly paid, as well as recognition of the right to compensatory interest in the terms and for the purposes provided in articles 43 of the LGT and 61 of the CPPT.
The request for constitution of the Arbitral Court was accepted by the President of CAAD and automatically notified to the Tax and Customs Authority on 30/05/2017.
In the exercise of the option of designating an arbitrator provided for in paragraph b) of article 6(2) and article 6(3) of the LFTA and in compliance with the provisions of paragraph g) of article 10(2) and article 11(2) of the same statute, the Claimant designated as Arbitrator Dr. João Espanha.
In accordance with the provisions of paragraph b) of article 6(2) and article 11(3) of the LFTA, and within the time limit provided for in article 13(1) of the LFTA, the head of the Tax and Customs Authority service ("TA") designated as Arbitrator Dr. João Menezes Leitão.
In accordance with the provisions of articles 11(5) and (6) of the LFTA, the President of CAAD notified the Claimant of the designation of the Arbitrator by the head of the Tax Administration service on 14/07/2017 and notified the arbitrators designated by the parties to designate the third arbitrator who assumes the status of President Arbitrator, and the Arbitrators designated by the parties agreed on the designation of Counselor Dr. Maria Fernanda dos Santos Maçãs as President Arbitrator.
On 08/08/2017, the President of CAAD informed the Parties of this designation, in accordance with the terms and for the purposes provided in article 11(7) of the LFTA.
In compliance with the provisions of article 11(7) of the LFTA, the Collective Arbitral Court was duly constituted on 24/08/2017 to examine and decide the subject matter of the proceedings.
By virtue of the resignation of Dr. João Espanha from the functions of arbitrator, by order of the President of CAAD of 10 May, the Taxpayer was requested to designate a new arbitrator.
The Taxpayer designated Professor Dr. Rui Duarte Morais.
On 19 May 2018 an order was issued by the Court with the following content:
"In accordance with the provisions of article 9(3) of the Legal Framework for Tax Arbitration: 'In the event of substitution of an arbitrator, the arbitral tribunal decides whether any procedural act should be repeated in light of the new composition of the tribunal, having regard to the state of the proceedings'.
It is therefore necessary, following the substitution of arbitrator that has occurred in the present action, to ascertain whether there is justification for the repetition of procedural acts performed.
In the present case, only pleadings were submitted.
Given that these are procedural acts for whose production, efficacy and interpretation, the maintenance in proceedings of the arbitrators who were exercising functions when such acts were performed is not essential, there is no justification for the repetition of any procedural acts, and the proceedings shall continue in their other regular terms".
To substantiate the request for arbitral ruling, the Claimant alleged, in summary, the following:
The self-assessment of the CSB at issue, issued and paid by the Claimant, arose following the approval of the State Budget Law for 2016, which expanded the subjective scope of the contribution on the banking sector (created by article 141 of Law No. 55-A/2010, of 31 December), and of Order No. 165-A/2016, of 14 June, which effected (i) an increase in the CSB rate as well as (ii) an expansion of the objective scope of the CSB, by means of amendments to the completion of Form 26.
The Claimant bases the illegality of the self-assessment on various defects, notably because the Claimant cannot be classified as a branch of a credit institution with principal seat outside the national territory, in this case Spain, since its parent company cannot be qualified as a credit institution, under Portuguese and/or Spanish law, terms in which it does not fall within the subjective scope of application of the CSB.
The Claimant alleges that, in the case at issue, the CSB possesses the legal nature of a tax since it cannot be the recipient of any resolution measure applicable by the Bank of Portugal and, consequently, cannot benefit from the financial support of the Resolution Fund to resolution measures applied by the Bank of Portugal.
On the other hand, as the "liabilities" arising from the financing obtained by the Claimant from its parent company does not translate into the assumption of a "debt to third parties", it should also not be subject to CSB.
Furthermore, according to the Claimant, this conclusion does not conflict with the amendment to the instructions for completing Form 26 that are part of Order No. 165-A/2016.
On the other hand, the self-assessment is also illegal because it is an act issued on the basis of Order No. 121/2011, of 30 March.
This Order implemented a system of flat rates for the CSB and, for that reason, intended to repeal the provisions of articles 4 and 8 of the CSB Regime (article 141 of Law No. 55-A/2010, of 31 December) – a statute hierarchically superior to the Order in question – which imposed the implementation of a progressive system of variable rates of CSB depending on the values actually determined by taxpayers.
The Claimant also contends that an interpretation of the CSB Regime in conformity with the Constitution of the Portuguese Republic (in particular with the constitutional principles of prohibition of retroactivity of tax law, of tax equality and of proportionality in the broad sense or prohibition of excess) necessarily leads to the declaration of illegality of the assessment now contested.
The principle of prohibition of retroactivity of tax law, as a safeguard of the principle of legal certainty, precludes: (i) the "taxation of new entities covered by the subjective scope of the CSB", preventing, in the case of the Claimant, the taxation, in 2016, of liabilities determined in 2015; (ii) the "application of the new CSB rate"; (iii) having as basis the liabilities determined in 2015, the "classification of internal financing of a branch to its parent company within the concept of 'debts to third parties'" in 2016.
The principle of tax equality prohibits the possibility of "equal taxation, under the CSB, of entities that are not presumed beneficiaries of the financial support provided by the Resolution Fund to the resolution measures adopted by the Bank of Portugal".
The principle of equality prevents different treatment, without justification, with respect to taxpayers who carried out the self-assessment of the CSB until 14 June 2016 and the rest who complied with the obligation between 15 and 30 June 2016.
The principle of proportionality in the broad sense or prohibition of excess precludes the equal taxation of branches of credit institutions authorized in other Member States of the European Union, which are not subject to prudential supervision by the Bank of Portugal and which are not part of the universe of mandatory participating institutions of the Resolution Fund, thus not benefiting from the financial support of that same Fund.
The Claimant also understands that the CSB regime suffers from other unconstitutionalities based on the violation of various constitutional principles, namely:
The principle of tax legality, both from the point of view of the reservation of formal law and of reservation of substantive law, which prohibits the establishment by Order of the tax base and CSB rates;
The principle of the reservation of law, which prevents the approval by Order of the rules for assessment and collection of the CSB instead of their approval by legislative statute of the Assembly of the Republic or the Government;
The principle of the supremacy of law and of normative hierarchy, which prevents the repeal of a provision of Law approved by the Assembly of the Republic, in this case, article 4 of the CSB regime, by a normative act hierarchically inferior, in the case at issue, article 5 of Order No. 121/2011;
The Claimant concludes by seeking the approval of the request, as it is grounded and proven, and, consequently, requests: i) the annulment of the self-assessment based on all the defects listed; ii) recognition of the Claimant's right to compensatory interest, in the terms and for the purposes provided in articles 43 of the LGT and 61 of the CPPT.
The TA presented its response on 30/10/2017, after the request for extension of the time limit was granted (for a further thirty days), by order of 20 September 2017, in which it raised a preliminary objection as follows:
Material incompetence of the Arbitral Court to determine unconstitutionality of norms:
Because it is a matter barred from consideration by the TA as well as by the Arbitral Court, namely by articles 2(1, paragraph a) and 4(1), both of the LFTA and articles 1 and 2(a), both of Order No. 112-A/2011;
Because it is clear that "the Claimant did not raise or specify any question concerning the existence of an error or defect in the self-assessment, nor in the facts on which it was based nor in the application of the respective legal rules", since it aims only to "attack the legality of the norm that provides for the CSB and not the respective self-assessment";
The Claimant's request is based solely on the request for unconstitutionality of a norm, without having raised any question concerning the existence of an error or defect in the self-assessment;
Because neither the TA nor the Arbitral Court are bound by the arbitral jurisdiction that does not deal with the assessment of the legality of the act of assessment, since "in accordance with the provisions of article 2, paragraph a) of Order No. 112/2011, of 22 March, the Tax Administration committed itself to the jurisdiction of the arbitral courts operating at CAAD that have as their object the examination of claims relating to taxes whose administration is committed to them as referred to in article 2(1) of Decree-Law No. 10/2011 of 20 January (LFTA), with the exception of claims relating to the declaration of illegality of self-assessment acts, which have not been preceded by recourse to the administrative remedy, in accordance with the provisions of article 131 of the CPPT";
Material incompetence of the Arbitral Court because it is a contribution and not a tax:
According to the Respondent, we are dealing with a financial contribution and not a tax, and it is barred for CAAD courts to examine the present arbitral request, in accordance with articles 4(1) of the LFTA and article 2 of Order No. 112/2011, of 22 March;
The Respondent bases its argument on articles 3(2) and 4 of the LGT, on the Constitutional Court ruling No. 365/03, of 14/07/2003, on Constitutional Court ruling No. 313/92 and on the decision of the Tax Court of Lisbon, in case No. 2133/14.7BELRS, as well as on various doctrine;
Concluding that the Respondent "in accordance with the combined articles 4(1) of the LFTA and article 2 of the PV [Order], the court will be materially incompetent to examine the merits of the present case, so the Respondent should be absolved of the proceedings".
In its response presented, in defense by way of reply, the Respondent argued as follows:
As regards the subjective scope of the CSB, it alleges that "considering that the Bank of Portugal itself considers the claimant as a branch of a credit institution, it cannot, therefore, fail to be classified within the referred paragraph c) of article 2(1) of the RCBS", adding the fact that, in accordance with article 2(2) of the CSB Regime, "credit institutions, branches and subsidiaries shall be considered as those defined, respectively, in paragraphs w), u) and ll) of article 2-A of the General Regime of Credit Institutions and Financial Companies, approved by Decree-Law No. 298/92, of 31 December", being "more than evident the correct subjective scope of the Claimant to the CSB";
As regards the alleged retroactive application of the CSB, the Respondent alleges that "the fact that approved accounts refer to 2016 raises no retroactivity problem, since, assuming the Contribution sub judice in which accounts are approved in the year in which the contribution is due, such approval, if it occurs in the same year, can only be assessed by reference to a past situation, since in the "same year" only accounts relating to the previous year can be approved, as those of the same year are obviously not yet "closed" or "consolidated", nor a fortiori, approved";
As regards the alleged violation of the principle of legal certainty "in the case sub judice", it was already foreseeable that the State would tax the branches in light of their effective contribution, as operators and "actors" of the banking system, in order to safeguard the systemic risks to which, reiterate, the branches also contribute";
As regards the alleged violation of the parliamentary reservation of law, the Respondent argues that "the formal reservation of law, given the most recent case law of the Constitutional Court, does not extend to the creation of financial contributions such as those in the instant case";
As regards the alleged violation of the principle of equality, according to the Respondent's understanding, "no unjustified differences in treatment result between taxpayers, as different situations are treated differently, and equal situations are treated equally, in strict compliance with that constitutional principle. (...) The CSB, regulated in the order, is, unequivocally, a norm of general and abstract character, applicable uniformly or distinctly to all cases in which the respective factual and legal presuppositions are met, in accordance with and in implementation of those same presuppositions";
As regards the alleged violation of the principle of equivalence as a criterion of the principle of tax equality, the Respondent considered that: "no other interpretive solution can be reached for the situation sub judice than that the provisions here scrutinized are in manifest conformity with the Fundamental Law, as is the bound action of the TA that, in strict compliance with its obligations and duties, correctly subsumed the tax facts to the applicable tax rules";
Regarding a possible violation of European Union Law, the Respondent argues that: "the Tax Administration must consider that in the process of elaborating the provisions in question the legislator will have taken into account the entire legal order, whether national or Community, so that the norms must respect the same, and it is also certain that it is not incumbent upon the Tax Administration to scrutinize the rules as to their adequacy with respect to Community Law. Thus, and saving due respect for better understanding, the respect of legality immanent to internal law that binds the TA in the terms set out above does not appear incompatible with the principle of the primacy of European Union Law";
Finally, as regards the alleged right to payment of compensatory interest, the Respondent contests that it requires "for the TA to incur in the duty of payment of compensatory interest, that some illegality be verified that denotes the character of undue payment from the perspective of substantive norms, an illegality that must necessarily be attributable to error on the part of the services";
Now, for the Respondent, "the self-assessment of the contribution was carried out in accordance with the current legal norms, without having been declared by the Constitutional Court its unconstitutionality or illegality with general binding force, in accordance with article 281 of the CRP, and its correct classification under the RCBS is verified, both as regards subjective scope and objective scope, the TA merely limited itself, in strict compliance with its duties and obligations, to make the correct subsumption of the facts to the norms;
In summary, the self-assessment in question "does not arise from any error on the part of the Services but follows directly from the application of the law", so there should be no payment of compensatory interest.
Notified to exercise, if it so wishes, the right of reply with respect to the exceptional matters alleged by the Respondent, the Claimant did so by way of response to the exceptions on 22/11/2017, invoking, in summary, the following:
With respect to the material incompetence of the arbitral tribunal to determine unconstitutionality of norms, it stated the following:
"the Arbitral Court is competent to examine requests for arbitral rulings aimed at the annulment of tax assessments - in the case at issue, the self-assessment of the CSB -, in accordance with the terms and for the purposes provided in article 2, paragraph 1, a) of the LFTA";
"what is alleged is the illegality of the contested self-assessment and what is requested is its annulment, with all its legal consequences, for which the arbitral jurisdiction has, without any doubt, competence";
"if the thesis defended by the Respondent regarding the material incompetence of the Arbitral Court to determine constitutional defects of norms had any basis or legal foundation, it would be difficult to understand the possibility of appeal, to the Constitutional Court, of an arbitral decision - cf. article 25(1) of the LFTA";
In relation to the material incompetence of the arbitral tribunal to determine illegalities in the assessment of the CSB, it argues that:
The CSB does not possess the nature and characteristics of a financial contribution and "it was precisely this expansion of the subjective scope of application of the CSB to entities that are not mandatory participants in the Resolution Fund that removed the characteristic of homogeneity of the group to which the CSB is intended and transformed this tribute, clearly and unequivocally, into a tax", so the thesis of the Respondent regarding the incompetence of the Arbitral Court cannot succeed, given that we are not dealing with a financial contribution, being that: "On the argument put forward by the Claimant, the Respondent did not make, repeat, a single comment, so there should be no doubt as to the nature of the CSB: that of a true earmarked revenue tax".
It indicates, however, that "the Arbitral Court would maintain its material competence to examine the request for arbitral ruling, since, in accordance with the best interpretation of the norms governing this matter as well as of the doctrine and case law produced on the subject, the arbitral court is competent to resolve disputes related to the assessment of 'contributions' administered by the TA, regardless of the qualification of such taxes as 'contributions' or 'taxes'".
Even if it is considered that article 2 of Order 112-A/2011 restricts the scope of material competence of the court established in article 2 of the LFTA "it would always be necessary to conclude that the Order in question was issued under the initial version of article 4 of the LFTA, which did not allow any delimitation of the jurisdiction provided for in article 2 of the LFTA, by means of that order".
The Claimant, in the response to the exceptional matter, presented as exhibit 1 a copy of the list of mandatory participating entities of the Resolution Fund obtained from the institutional website of that entity.
The Respondent requested that the Court remove it from the case for lack of legal basis.
On the request, the Court issued an order on 26/11/2017 as follows:
"In accordance with article 10(2, paragraphs c) and d) of the LFTA, documents must be attached to the pleadings that contain the factual circumstances subject to proof. This rule is in line with what results from article 423(1) of the CPC, in accordance with which documents must be attached to the pleadings in which the factuality to which such documents refer is invoked.
In accordance with the provisions of article 29(1, e) of the LFTA, the civil procedural regime is subsidiarily applicable to the tax process, and, as follows from paragraph 2 of such provision, such application must be carried out in terms duly adapted to the reality of the tax process and to the specificities of each action.
Within the scope of paragraph 2 of such provision, one of the hypotheses of admissibility of late joinder of documents is contemplated: 'If not attached with the respective pleading, documents may be presented up to 20 days before the date on which the final hearing takes place, but the party is condemned to a fine, except if it proves that it could not offer them with the pleading'.
The application, duly adapted, of said norm to the arbitral tax process leads to the fact that, in cases in which, as in the present, there has been no hearing, the procedural reference to be taken into account is the moment of allegations and not that of the hearing. This was so decided, for example, following a line of case law that is corroborated in the arbitral proceedings Nos. 308/2015-T and 753/2014.
There is thus no legal obstacle to the admissibility of the joinder of the said document by the Taxpayer.
Furthermore, it is merely a print taken from an institutional website of public access (that relating to the Resolution Fund)."
Thus the Respondent's request was denied.
By another order of the Arbitral Court, also of 26/11/2017, the hearing provided for in article 18 of the LFTA was dispensed with since there was no evidence to be produced and the Claimant had timely responded to the exceptions, and the parties were notified to, if they wish, make written submissions within 15 days, a time limit of successive character.
The Claimant submitted its written submissions on 20/12/2017, in which it reiterated the arguments explained in its previous procedural documents and replied to the arguments presented by the Respondent, invoking, in summary, the following:
As regards the subjective scope of the CSB, the Claimant argues that "Financial credit companies, being qualified under the law as financial companies and no longer as credit institutions under paragraph i) of article 6(1) of the RGICSF, do not constitute mandatory participating institutions of the Resolution Fund, thus are not obliged to contribute to the same", understanding the legislative solution adopted since although financial credit companies "may pursue a scope of activities similar to that of a credit financial institution, they may not receive any reimbursable funds from the public regardless of their nature." It further states that "the Claimant is not covered by the subjective scope of the CSB because it cannot be considered a branch of a credit institution with seat outside the national territory, which taints with illegality and determines the annulability of the contested self-assessment by violation of article 2(1, paragraph c) of the CSB Regime";
As regards the alleged retroactive application of the CSB, the Claimant considers that "an interpretation of article 5 of Order 165-A 2016 and the new instructions for completing Form 26 in conformity with the principle of prohibition of retroactivity of tax law (as a corollary of the principle of legal certainty) and the provisions of article 12 of the LGT would always prevent the consideration, in 2016, of liabilities determined in 2015 by reference to internal financing (between a branch and its parent company)." It concludes that "an interpretation in conformity with the CRP of the provisions of Order 165-A/2016 is necessary, to the effect that all amendments introduced (whether to the subjective scope of application of the CSB or to the rate of the CSB applicable to the liabilities determined by taxpayers) may only apply in the future";
In reference to the alleged violation of the principle of legal certainty, the Claimant reiterates that article 5 of Order 165-A/2016 and the new instructions for completing Form 26 "are unconstitutional by violation of the constitutional principle of prohibition of retroactivity of taxes (as a corollary of the principle of legal certainty enshrined in article 2 of the CRP) and illegal by violation of the provisions of article 12 of the LGT, which taints with illegality and determines the annulability of the contested self-assessment.";
Regarding the alleged violation of the parliamentary reservation of law, the Claimant replies that the thesis of the Respondent "is manifestly contradictory. Indeed, in a first phase, the Respondent entitles, on several occasions, the CSB as "tax" or "bank tax", applying, without more, the principle of tax legality to the case at issue. In a second phase, without the Claimant having been able to understand the change in position, the Respondent comes to state that the principle of tax legality does not apply to "financial contributions". (...) The various statements show that the Respondent either understands that the CSB actually constitutes a tax (thus adhering to the thesis of the Claimant on this matter) or, at least, has doubts about the legal qualification of the CSB.". It ends by asserting that "by mandate of article 8 of the CSB Regime, the rules for assessment and collection of the CSB were established by simple order rather than being approved by legislative statute of the Assembly of the Republic or the Government (which violates the reservation of law to which such rules are subject), which, if the CSB were not a tax (which it is), would be capable of equally generating, unconstitutionality by violation of the constitutional principle of the reservation of law of the rules for assessment and collection of taxes". It concludes "that the regime that created the CSB suffers from organic unconstitutionality by failure to comply with the constitutional principle of tax legality.";
Referring to the constitutional principle of tax equality, the Claimant argues that "article 2(1, paragraph c) of the CSB Regime, in the wording introduced by the State Budget Law for 2016, must be subject to interpretation in conformity with the principle of equality, and therefore it should be considered that the CSB may not apply indiscriminately and equally to mandatory participating institutions of the Resolution Fund and branches of credit institutions with principal seat in other Member States of the European Union, since the latter cannot be subject to any resolution measures to be applied by the Bank of Portugal nor cause any externalities that the CSB aims to internalize" - "The equal treatment of two manifestly distinct groups of entities appears, therefore, non-conforming to the constitutional principle of equality, as it results in the equal treatment of two materially distinct realities without any material justification for doing so";
As regards the supposedly alleged violation of European Union Law, the Claimant states that "it is first necessary to note that (...) it did not raise, in the present proceedings, any defect of non-conformity of domestic law with European Union Law";
In relation to the alleged unconstitutionality of article 5 of Order 165.º-A/2016 arising from the violation of the constitutional principle of the supremacy of law, the Claimant notes that "the Respondent did not make a single comment", persisting in the Claimant's contention that "a question of unconstitutionality is raised given that article 5 of the Order does not conform, but rather repeals, the provision in article 4 of the CSB Regime (a statute that was approved by Law of the Assembly of the Republic)";
Finally, referring to the right to payment of compensatory interest, in which the Respondent alleges that there was no error attributable to the services in the assessment and, as such, the Claimant does not have the right to payment of such interest, it counter-argues that an assessment in non-conformity with the Constitution of the Portuguese Republic is deemed an error attributable to the services in the assessment of the tax, basing it through citation of a Decision of the TAF of Porto: where it is "settled that the claimant made the payment of the totality of the tax subject to the assessments impugned" and "As the assessment at issue is based on an understanding that is now concluded to be non-conforming to the Constitution, we are dealing with an error generating the payment of compensatory interest".
Notified of the content of the Claimant's submissions, the Respondent presented written submissions on 17 January 2018, arguing, in summary, the following:
The Claimant, in its submissions, invokes and imputes defects both to the CSB and to its assessment "that it had not invoked in the initial petition" not being "procedurally admissible to invoke new facts or raise new questions of illegality of the impugned act", in the name of the principle of stability of the proceedings. It thus requests "that all and any defects" that the Claimant "had not invoked in the initial petition" "be deemed not written and, consequently, not invoked";
As regards the Claimant's response to the exceptions invoked by the Respondent, the latter warns that the rulings invoked by it to support its position were inadequately cited in favor of the Claimant, pointing out that the latter delimited them "at the pleasure of its conveniences" and that "at no point could it be concluded that those Rulings conclude in the same sense as its contrived and inaccurate thesis";
It further adds that the Decisions of the TAF of Porto that the Claimant invoked in its favor relate to "facts that in no way resemble those that are, or are not, here disputed";
It also argues that the fact that the Respondent itself has referred to the CSB as a "tax" throughout its Response does not result in the Respondent's adhesion to the thesis of the Claimant, since the term "tax", "has an underlying generic reference to tax figures";
With respect to "debts to third parties", the Respondent invokes that the Claimant obscures the true meaning of the figure of permanent establishment in that "it is not favorable to the entire regime that shapes the figure of permanent establishments, specifically with respect to the independent tax treatment of the parent company that is given to it, namely, the arm's length principle that requires the parent company and the permanent establishment to be treated independently whether for transfer pricing purposes or for purposes of income and/or expense allocation". It continues by stating that "the opening of a branch in Portugal requires the registration of this entity as a taxpayer, hence an entity subject to Portuguese tax legislation" with "the same declarative obligations, the same accounting obligations, as if it were a Portuguese law company, independent of the parent company". It ends by stating that there is specific treatment under IRC and IRS for permanent establishments "from which the Claimant painfully tries to escape, in order to equally and concomitantly escape from the payment of the Contribution that concerns us here, in such a painful way that it calls into play the VAT.";
The Respondent concludes by petitioning (i) that the defects invoked by the Claimant in its submissions be deemed not written and, consequently, not invoked; (ii) the withdrawal of exhibits 5 and 6 from the case as inadmissible at the present stage; (iii) that the exceptions invoked by the Respondent be judged as well-founded, with the Respondent being absolved of the proceedings; or, if not so understood, (iv) that the present request for arbitral ruling be judged as not proven, resulting in the absolution of the Respondent from all requests with legal consequences.
An order was finally issued extending the arbitral decision to 24 June 2018.
Preliminary Matters
The request for arbitral ruling is timely because it was submitted within the time limit provided for in paragraph a) of article 10(1) of the LFTA.
The parties have legal personality and capacity, show themselves to be legitimate and are duly represented (articles 4 and 10(2) of the LFTA and article 1 of Order No. 112-A/2011, of 22 March).
The examination of the material incompetence of the Court raised by the Respondent will be carried out following the determination of the facts.
III. Matter to be Decided
The matter to be decided in the present case concerns the legality of the CSB self-assessment filed on 30.6.2016, subject to the payment document No. ..., in the amount of €1,183,947.87, taking into account the defects of violation of law imputed by the Claimant, as described above in sections 3.2 to 3.9, self-assessment against which the Claimant filed an administrative claim, to which was assigned the number ...2016..., and in which the presumption of implied rejection was formed, as well as, consequently, with the request for refund of the amount paid as CSB plus compensatory interest.
Previously, as mentioned, it is necessary to examine the question of the competence of the Arbitral Court, which is determined ex officio, preceding that of any other question, as provided in articles 13 of the Code of Procedure before Administrative Courts (CPTA) and 278(1, a) of the Code of Civil Procedure (CCP), applicable ex vi article 29(1, d) and (e) of the LFTA.
For the examination of these matters, it is convenient to begin by determining the relevant facts.
IV. Factual Matters
Findings of Fact
The following facts are deemed proven:
The Claimant is the branch in Portugal of B... (B...), a credit institution under Spanish law, with seat and effective management in Madrid, as shown in exhibit No. 3 attached to the request for arbitral ruling.
B... - Spain and the Claimant, as a branch thereof, are part of a financial group that resulted from a joint venture between Groups C... and D... and whose principal activity is the granting of housing credit to individuals (hereinafter, briefly referred to as "Group E...").
The Claimant constitutes a branch of a financial institution, B... - Spain, subject to the law of another Member State of the European Union, Spain, which is wholly owned by F..., S.A..
B... - Spain has the nature of a common subsidiary, on the one hand, of Banco D... S.A., a credit institution with seat in Spain and, on the other hand, of C..., S.A. and G..., S.A., two credit institutions with seat in France.
B... - Spain, as an Establecimiento Financiero de Crédito under Spanish law, is not legally authorized under Spanish law to accept deposits from the public or other reimbursable funds, which justifies that the acceptance of deposits and other reimbursable funds is not included in its corporate purpose, as seen from exhibit No. 6 attached to the request for arbitral ruling.
The Claimant, as a branch, is not legally authorized to accept deposits from the public or other reimbursable funds.
The Claimant has the following corporate purpose, as shown in the commercial certificate attached as exhibit No. 4 to the request for arbitral ruling:
"a) Granting of loans and credit, including consumer credit, mortgage credit and financing of commercial transactions;
b) 'Factoring', with or without recourse and the complementary activities thereof, such as customer investigation and classification, debtor accounting and, in general, any other activity tending to favor the administration, evaluation, security and financing of credits arising from national or international commercial traffic, which are granted to it;
c) Financial leasing with inclusion of the following complementary activities:
- Maintenance and conservation activities of the leased assets;
- Financing grants related to a financial leasing operation, present or future;
- Intermediation and management of financial leasing operations;
- Non-financial leasing activities which may or may not be complemented with a purchase option;
- Issuance and management of credit cards;
- Granting of guarantees and sureties and subscription of similar commitments".
The operational activity of the Claimant consists essentially of granting mortgage credit in the Portuguese market.
On 30 June 2016 the Claimant, by reference to the year 2016, proceeded with the submission of Form 26 - CSB, via payment slip No. ..., in the amount of €1,183,947.87 (one million one hundred eighty-three thousand nine hundred forty-seven euros and eighty-seven cents), as shown in exhibit No. 1 attached to the request for arbitral ruling.
The Claimant made payment on that same day, as evidenced by the proof contained in exhibit No. 1 attached to the request for arbitral ruling and at page 188 of the administrative proceedings attached to the case.
In the liabilities that were subject to CSB, determined and approved by the Claimant in 2015, the following average values were considered: internal financing obtained by the Claimant from its parent company, B... - Spain, in the amount of €1,071,040,773.35; interest on the internal financing referred to, in the amount of €2,154,401.52; tax liabilities in the amount of €249,262.14; liabilities arising from "debts to third parties" in the total amount of €2,871,812.15, including: (i) the amount of financing and other resources obtained from third parties in the amount of €613,695.77; (ii) interest and similar charges in the amount of €81,822.83; and (iii) other charges payable in the amount of €2,176,293.54, all in the total amount of €1,076,316,249.16, as shown in exhibit No. 7 attached to the request for arbitral ruling, which resulted in the amount of CSB to be paid of €1,183,947.87.
The Claimant filed an administrative claim against said self-assessment, as shown in exhibit No. 2 attached to the request for arbitral ruling and contained at page 1 et seq. of the administrative proceedings attached to the case.
The administrative claim was instituted by the TA under the number ...2016..., as shown in exhibit No. 8 attached to the request for arbitral ruling and contained in the administrative proceedings attached to the case.
In the administrative claim, the annulment of the self-assessment carried out was requested, arguing that the CSB that was self-assessed suffers from illegality because the Claimant understands to be excluded from the subjective scope of the CSB (in the measure that it cannot be classified as a branch of a credit institution seated in another Member State of the EU, since its parent company cannot be qualified as a credit institution), from the illegality resulting from the non-classification of internal financing obtained from the parent company within the concept of debts to third parties, as well as from a defect of violation of law – in particular an error in its presuppositions – notably by unconstitutionality of the norm that provides for the CSB.
On 27 February 2017 the 4-month period that the Respondent had to decide on the administrative claim filed expired, presume being the implied rejection.
Following the presumption of implied rejection of the administrative claim, the Claimant, on 29 May 2017, filed the present request for arbitral ruling.
Unproven Facts
There are no other facts with relevance to the arbitral decision to be judged as unproven.
Reasoning on Factual Matters
With regard to the judgment of factual matters, the Court's conviction was based on the free assessment of the positions assumed by the parties with respect to facts in their procedural documents, as well as on the content of the documents attached to the case by the Claimant and in the administrative proceedings.
V. Competence of the Arbitral Court
Let us now consider the matter raised regarding the material incompetence of this Arbitral Court, regarding which, as described above in sections 5.1 and 5.2, two autonomous grounds are presented by the Respondent: i) incompetence to determine unconstitutionality of norms; ii) incompetence to determine illegalities in the assessment of the CSB because it is a financial contribution and not a tax.
It should be clarified previously that competence in reason of subject matter is necessarily assessed according to the material relationship in dispute, taking into account the terms in which the claim is formulated in the initial pleading, including its grounds, which implies that the examination of whether the factual and legal configuration of the claim as formulated is correct or whether the reasons invoked are well-founded is a question that concerns the merits of the process and should therefore not interfere with the decision on the court's competence (cf. ruling of the Administrative Supreme Court of 07/02/2018, case No. 0836/16).
V.I. Competence of the Arbitral Court Regarding the Determination of Unconstitutionality of Norms
Let us begin with the examination of the exception of material incompetence of the arbitral court to determine unconstitutionality of norms.
The Respondent thus requests that the Court order the absolution of the proceedings in accordance with articles 576(2) and 557(a) of the CCP, ex vi article 29(1, a) and (e) of the LFTA, due to the occurrence of an exception that bars the examination of the merits, based on articles 2(1, a) and 4(1), both of the LFTA and articles 1 and 2(a), both of Order No. 112-A/2011.
According to the Respondent: "arbitrability must refer to the act of assessment and not to the (il)legality of the norm that allows the act of assessment, as the Claimant intends.";
For its part, the Claimant alleges that, in view of the provisions of paragraph a) of article 2(1) of the LFTA, the arbitral court is competent to examine requests for arbitral rulings aimed at the annulment of tax assessments, so "the arbitral request at issue is admissible, as what is alleged is the illegality of the contested self-assessment and what is requested is its annulment, with all legal consequences, for which the arbitral jurisdiction has, without a doubt, competence".
In accordance with article 2(1) of the LFTA and article 2 of Order No. 112-A/2012, Arbitral Courts have powers of cognition for the examination of the legality of the acts indicated therein, including therefore acts of assessment.
On this matter, one can cite the settled case law, among others, in arbitral case No. 115/2012-T:
"The scope of tax arbitral jurisdiction was (...) delimited, in the first place, by the provisions of article 2 of the LFTA which states, in its paragraph 1, the criteria of material division, encompassing the examination of claims aimed at the declaration of illegality of tax assessment acts (paragraph a))."; "By means of the Order of Commitment (Order No. 112-A/2011, of 20 April), the Government, by the Ministers of State and Finance and Justice, committed the services of the Directorate-General of Taxes and the Directorate-General of Customs and Special Consumption Taxes to the jurisdiction of the arbitral courts operating at CAAD, and these services now correspond to the Tax and Customs Authority, in accordance with Decree-Law No. 118/2011, of 15 December, which approves the organizational structure of this Authority, resulting from the merger of various bodies. In this Order, additional conditions and limits of commitment are established taking into account the specificity of the matters and the value at issue".
See also the ruling issued in arbitral case No. 48/2012-T:
"The competence of the arbitral courts operating at CAAD is, in the first place, limited to the matters indicated in article 2(1) of Decree-Law No. 10/2011, of 20 January (LFTA).
In a second line, the competence of the arbitral courts operating at CAAD is also limited by the terms in which the Tax Administration committed itself to that jurisdiction, concretized in Order No. 112-A/2011, of 22 March, since article 4 of the LFTA establishes that 'the commitment of the tax administration to the jurisdiction of the courts constituted in accordance with this law depends on an order of the members of the Government responsible for the areas of finance and justice, which establishes, in particular, the type and maximum value of the disputes covered'.
In light of this second limitation of the competence of the arbitral courts operating at CAAD, the resolution of the question of competence depends essentially on the terms of this commitment, for, even if one is dealing with a situation that can be classified under that article 2 of the LFTA, if it is not covered by the commitment the possibility of the dispute being jurisdictionally decided by this Arbitral Court will be precluded".
Now, the examination of the (il)legality of the assessment may be based on issues of unconstitutionality.
Recall in this respect that, as provided in articles 204, 209(2) and 280, all of the CRP, the competence to verify the (un)constitutionality of norms, raised in connection with concrete cases, is recognized to all courts, which necessarily includes the arbitral courts constituted in CAAD. It is sufficient, for this purpose, to observe article 25(1) of the LFTA: "The arbitral decision on the merits of the claim filed that terminates the arbitral proceedings is subject to appeal to the Constitutional Court in the part in which it refuses to apply any norm on the ground of its unconstitutionality or in which it applies a norm whose unconstitutionality has been raised".
In this way, it is verified that this Court is competent to examine a possible annulment of the impugned assessment act based on the non-application of the norm that authorizes it, on the basis of its unconstitutionality.
Terms in which the exception of material incompetence of the Arbitral Court is judged as unfounded on this ground.
V.II. Competence of the Court to Determine Illegalities in the CSB Assessment Having Regard to Its Tax Nature
We now proceed to examine the exception of material incompetence of the Court to determine illegalities in the CSB assessment having regard to its tax nature.
From the perspective of the Respondent, in accordance with the combined provisions of articles 4(1) of the LFTA and article 2 of the Commitment Order No. 112-A/2011, of 22 March, the competence of the Arbitral Court is not legally provided for with respect to questions concerning contributions;
For its part, the Claimant alleges that the tax in question should not be qualified as a contribution, but rather as a tax (as mentioned in sections 3.3 and 5.2.1 above). It adds that, even if the CSB were qualified as a contribution, by the interpretation of article 2 of Order No. 112-A/2011 and articles 2 and 4 of the LFTA, it would necessarily be concluded that the Arbitral Court would maintain its material competence to examine the request for arbitral ruling (as mentioned in sections 5.2.2 and 5.2.3 above).
The position of the Claimant cannot be accepted for the reasons set out below and which involve, in the first place, the explanation and specification of the normative regulation of the material competence of Arbitral Courts operating at CAAD and, secondly, the elucidation of the legal-tax nature of the CSB.
Delimitation of Material Competence of Tax Arbitral Courts to Claims Relating to Taxes
The present case concerns the particular tax figure of the Contribution on the Banking Sector, since the object of the dispute, as indicated above (section 14), is constituted, following the formation of the presumption of implied rejection of the administrative claim No. ...2016..., by the self-assessment of the Contribution on the Banking Sector carried out by the Claimant, by submission on 30.6.2016 of Form 26, as per document No. ..., in the amount of €1,183,947.87, the annulment of which is requested in these proceedings for the reasons relating to violation of law that arise as the cause of action (see above section 3).
The Contribution on the Banking Sector (CSB) is a tax created in accordance with the regime established by article 141 of Law No. 55-A/2010, of 31.12 (subsequently amended or extended by articles 182 of Law No. 64-B/2011, of 30.12, 252 of Law No. 66-B/2012, of 31.12, 226 of Law No. 83-C/2013, of 31.12, 235 and 236 of Law No. 82-B/2014, of 31.12, 185 of Law No. 7-A/2016, of 30.03, 238 of Law No. 42/2016, of 28.12, and 279 of Law No. 114/2017, of 29.12), with the regulation resulting from Order No. 121/2011, of 30.3, amended by Orders No. 77/2012, of 26.03, 64/2014, of 12.03, 176-A/2015, of 12.06 and 165-A/2016, of 14.06.
The question of material competence here at issue concerns whether this tax figure of the CSB falls within the portion of jurisdiction legally and regulatorily attributed to the tax arbitral courts constituted at the Administrative Arbitration Center (CAAD), without which this Arbitral Court is materially incompetent to judge the claims made by the Claimant regarding the legality of the tax act examined, the self-assessment of the CSB.
One must begin with the interpretation of the provisions of article 2 of Order No. 112-A/2011, of 22.3, whose literal text is as follows:
"The services and bodies referred to in the previous article [that is, in accordance with article 1, the Directorate-General of Taxes and the Directorate-General of Customs and Special Consumption Taxes, extinct services of the Ministry of Finance, whose duties were succeeded by the Tax and Customs Authority, by virtue of the provisions of article 27(2, a) and (3, a) and (b) of Decree-Law No. 117/2011, of 15.12 and article 12 of Decree-Law No. 118/2011, of 15.12] commit themselves to the jurisdiction of the arbitral courts operating at CAAD that have as their object the examination of claims relating to taxes whose administration is entrusted to them as referred to in paragraph 1 of article 2 of Decree-Law No. 10/2011, of 20 January, with the exception of the following: a) Claims relating to the declaration of illegality of self-assessment acts, withholding at source and payment on account that have not been preceded by recourse to the administrative remedy in accordance with articles 131 to 133 of the Tax Procedure and Process Code; b) Claims relating to acts of determination of taxable matter and acts of determination of taxable income, both by indirect methods, including the decision of the revision procedure; c) Claims relating to customs duties on imports and other indirect taxes on goods subject to import duties; and d) Claims relating to tariff classification, origin and customs value of goods and tariff quotas, or whose resolution depends on laboratory analysis or on procedures to be carried out by another Member State in the context of administrative cooperation in customs matters".
This provision arises from the establishment in article 4(1) of the LFTA which, in the wording of Law No. 64-B/2011, of 30.12, provides: "The commitment of the tax administration to the jurisdiction of the courts constituted in accordance with this law depends on an order of the members of the Government responsible for the areas of finance and justice, which establishes, in particular, the type and maximum value of the disputes covered" (in the original wording it simply said: "The commitment of the tax administration to the jurisdiction of the courts constituted in accordance with this law depends on an order of the members of the Government responsible for the areas of finance and justice").
Thus, by force of article 4(1) of the LFTA (whether in its original version or in its current version), the establishment of the commitment of the tax administration, naturally by delimitation of its scope, to the jurisdiction of the arbitral courts of CAAD became dependent on a joint order of the members of the Government responsible for the areas of finance and justice, namely, the referred Order No. 112-A/2011, also known as the Commitment Order.
This is, moreover, in that order the essential instrument to ensure the minimum of attribution to the administrative bodies of the submission, for their part, of disputes concerning the exercise of powers of authority involved in their respective attributions to the jurisdiction of arbitral courts of an institutionalized arbitration center such as CAAD and the consequent exclusion of the intervention of state courts (see, in comparative terms, with respect to the commitment of the State in the administrative field to institutionalized arbitration centers, article 187(2) of the CPTA: "The commitment of each ministry to the jurisdiction of arbitration centers depends on an order of the member of the Government responsible for the area of justice and the member of the Government competent in reason of the matter, which establishes the type and maximum value of the disputes covered, conferring on those interested the power to address such centers for the resolution of such disputes"). For this very reason, it is said already, since it is the title of the association of the TA to tax arbitration, it is not judged, contrary to what is intended by the Claimant (see articles 98 to 102 of the response to the exceptions), that the delimitation concretely operated by the Commitment Order, as a regulatory or implementing regulation, constitutes any impairment of the normative hierarchy enshrined in article 112(5) of the Constitution of the Portuguese Republic (CRP) – which determines that: "No law may create other categories of legislative acts or confer on acts of another nature the power, with external effect, to interpret, supplement, modify, suspend or repeal any of its provisions" – since what is directly and immediately at issue, in accordance with article 4 of the LFTA, is the determination and assumption of commitment to arbitration on the part of certain services of the Tax Administration, currently the TA, although as a consequence thereof, by force of the terms of that commitment, there results a negative delimitation of the scope of the intervention of the arbitral courts operating at CAAD, which, in any case, does not confuse with the modification of the content of the norm of article 2 of the LFTA or its repeal, so article 4 of the LFTA does not have the effect or objective of conferring on the Commitment Order the possibility of repealing or modifying, even partially, a legal norm (see, on this matter, the ruling of the Constitutional Court No. 289/2004).
Hence what was well stated, in perfectly clarifying terms, in the arbitral ruling issued in case No. 48/2012-T (followed, among others, by the rulings issued in cases No. 73/2012-T and 232/2017-T) already cited above:
"The competence of the arbitral courts operating at CAAD is, in the first place, limited to the matters indicated in article 2(1) of the [LFTA].
In a second line, the competence of the arbitral courts operating at CAAD is also limited by the terms in which the Tax Administration committed itself to that jurisdiction, concretized in Order No. 112-A/2011, of 22 March, since article 4 of the LFTA establishes that 'the commitment of the tax administration to the jurisdiction of the courts constituted in accordance with this law depends on an order of the members of the Government responsible for the areas of finance and justice, which establishes, in particular, the type and maximum value of the disputes covered'.
In light of this second limitation of the competence of the arbitral courts operating at CAAD, the resolution of the question of competence depends essentially on the terms of this commitment, for, even if one is dealing with a situation that can be classified under that article 2 of the LFTA, if it is not covered by the commitment the possibility of the dispute being jurisdictionally decided by this Arbitral Court will be precluded".
Given, then, the provision of article 2 of Order No. 112-A/2011, combined with the provision of article 2(1) of the LFTA (in the wording of Law No. 64-B/2011, of 30.12), to which it refers in the cited article 2 of the indicated Order, it appears crystal clear that the normative determination resulting from the enunciations contained in the provisions in question is reduced to the following proposition:
The commitment to the jurisdiction of the arbitral courts operating at CAAD of the Tax and Customs Authority has as its object the examination of claims, relating to taxes whose administration is entrusted to it, for the declaration of illegality of acts of assessment, self-assessment, withholding at source and payment on account and of declaration of illegality of acts of fixation of taxable matter when not giving rise to assessment, of acts of determination of taxable matter and of acts of fixation of patrimonial values, with the exception of claims relating to the declaration of illegality of acts of self-assessment, withholding at source and payment on account that have not been preceded by recourse to the administrative remedy in accordance with articles 131 to 133 of the Tax Procedure and Process Code, to acts of determination of taxable matter and acts of determination of taxable income, both by indirect methods, including the decision of the revision procedure, to customs duties on imports and other indirect taxes on goods subject to import duties and to tariff classification, origin and customs value of goods and tariff quotas, or whose resolution depends on laboratory analysis or procedures to be carried out by another Member State in the context of administrative cooperation in customs matters.
As such, by force of the delimitation carried out in article 2 of Order No. 112-A/2011, the claims for declaration of illegality of acts of assessment, self-assessment, withholding at source and payment on account, of acts of fixation of taxable matter, of acts of determination of taxable matter and of acts of fixation of patrimonial values (not excepted in paragraphs a) to d) of the same article), to whose arbitrability the TA is subject, must be "relating to taxes", naturally whose administration is entrusted to it, not encompassing, therefore, all and any "taxes" (in accordance with the generic formulation subject of article 2 of the LFTA).
Having in mind that the attributions of the Tax and Customs Authority, which is the only body of the Tax Administration (article 1(3) of the General Tax Law) committed to the jurisdiction of the tax arbitral courts of CAAD, comprise the administration of "taxes, customs duties and other taxes that are entrusted to it", being incumbent upon it "[to] ensure the assessment and collection of taxes on income, on assets and on consumption, customs duties and other taxes it has to administer, as well as to collect and recover other State revenue or legal entities under public law" (see article 14(1) and (2) of Decree-Law No. 117/2011, of 15 December, amended by Decree-Laws No. 200/2012, of 27 August, 1/2015, of 6 January, 5/2015, of 8 January, 28/2015, of 10 February, 125/2015, of 7 August and 113/2017, of 7 September - Organizational Law of the Ministry of Finance – as well as article 2(1) and (2) of Decree-Law No. 118/2011, of 15 December, as amended by Decree-Law No. 142/2012, of 11/07, Decree-Law No. 6/2013, of 17/01, Decree-Law No. 51/2014, of 02/04; Law No. 82-B/2014, of 31/12; Decree-Law No. 78/2017, of 30/06, and Law No. 89/2017, of 21/08 – organizational law of the Tax and Customs Authority; note that this was already the case under the previous Decree-Law No. 81/2007, of 29 March, since in its article 2 it was established that: "The DGT has as its mission to administer the taxes on income, on assets and on consumption, as well as to administer other taxes that are entrusted to it by law, in accordance with policies defined by the Government in tax matters" (paragraph 1) and that: "The DGT pursues the following attributions: a) To ensure the assessment and collection of taxes and other taxes it has to administer" (paragraph a) of paragraph 2)), it is thus verified that the regulatory decision underlying Order No. 112-A/2011 circumscribed the commitment to tax arbitration of the TA to the competences respecting the taxes administered by this body.
Thus, the "certain areas of conflict with the tax administration" (to use a formulation from the Constitutional Court ruling No. 435/2016, section 11.3.1) in which tax arbitration is possible are restricted to the legal-tax figure of taxes, not encompassing the entire multifaceted reality of the taxes to which article 2(1) of the LFTA refers in general terms with references to "acts of assessment of taxes" or "assessment of any tax", where one understands, in accordance with the provision of article 3(2) of the General Tax Law (see also article 4(1) of the General Tax Law - LGT), "taxes, including those that are customs and special, and other tax species created by law, namely taxes and other financial contributions in favor of public entities".
Faced with the enunciation contained in article 2 of Order No. 112-A/2011, which restricts the commitment to the arbitral courts operating at CAAD to "claims relating to taxes", it is concluded that this Arbitral Court constituted within CAAD possesses competence only to examine the claim indicated in article 2 of the LFTA, only to the extent that the request for arbitral ruling concerns a tax whose administration is entrusted to the TA.
It is not ignored, however, as indeed immediately invoked by the Claimant in the response to the exceptions presented (see above section 5.2.2, as well as articles 92 to 97 of the said response), that decisions of tax arbitral courts of CAAD have affirmed their material competence to examine claims relating to taxes that do not constitute taxes, including as regards the CSB itself. Thus, the arbitral decision issued in case No. 139/2017-T relating to CSB assessment (its section 25), following entirely the understanding adopted in the ruling issued in case No. 312/2015-T, relating to the Extraordinary Contribution on the Energy Sector, understood that "in light of the literal content and systematic articulation of the provisions in question", if "any meaning can be attributed to the literal-systematic interpretation of the provisions is that the reference to "taxes" rather than "taxes" in article 2 of Order No. 112-A/2011, followed by the express remission to paragraph 1 of article 2 of the LFTA and the express enunciation of a set of exceptions, indicates that the 'legislator' of the Order did not have the restrictive intent that the TA invokes, for if it had it would have made express allusion to that restriction in the array of paragraphs that contemplate the exceptions" and "convoked the teleological and rational elements of legal interpretation also do not point toward such a restriction, but only toward the 'limitation of the scope of the TA's commitment through the ownership of powers to administer the taxes', which is, moreover, the logical limit of the commitment – not encompassing restriction so the related with "contributions" also by it assessed", being that "the procedure of assessment and collection of the CSB, even if we consider it inserted in the legal category of 'contributions' in no way distinguishes itself, in its nature and structure, from that of "taxes", since the TA acts as if these were taxes", to which it was further added that: "The absence of an express reference in the text of article 2 of Order No. 112-A/2011 to this type of tax should only be due to the fact that, at that time, no tax with such characteristics was yet entrusted to the administration of the TA", concluding itself, that: "the scope of arbitrability encompasses, as follows from the combined interpretation of articles 2 of the LFTA and of Order No. 112-A/2011, the examination of claims relating to taxes whose administration is entrusted to the TA, with the exception of the cases enumerated in the paragraphs of article 2 of Order No. 112-A/2011 – encompassing, therefore, also claims relating to 'contributions' administered by it. Consequently, and since the CSB is a tax administered by the TA, whose procedure of assessment and collection is structurally identical to that of taxes, the arbitral court is competent to resolve the present dispute, regardless of whether this tax comes to be qualified as a contribution or as a tax". The position thus adopted by this decision of case No. 139/2017 was entirely subscribed to by the ruling issued in case No. 437/2017-T, also concerning the CSB, in which the respective Court declared not to "have reasons to differ from the understanding outlined there".
Having reviewed the argumentation configured in arbitral decisions to establish the competence of Arbitral Courts of CAAD regarding the cognition of disputes relating to taxes not reducible to taxes to which the Claimant appeals in the response to the exceptions (see articles 92 and 93), it is understood that the same cannot be accepted.
From the outset, as already follows from the above cited in sections 31 and 32, it appears that if there is anything that reveals the systematic articulation of article 2 of the LFTA and article 2 of Order No. 112-A/2011 it is the clear delimitative-restrictive purpose of the terms of the commitment established by this latter provision. Indeed, the regulatory enunciations of article 2 of Order No. 112-A/2011 show that, within the circle circumscribed by article 2 of the LFTA (the claims "referred to in article 2(1) of Decree-Law No. 10/2011, of 20 January"), the commitment of the TA to the jurisdiction of the arbitral courts operating at CAAD concerns, primarily, as it states in the body of the article, only the examination of claims relating to taxes whose administration is entrusted to it and, thereafter, within this scope of taxes administered by the TA, does not comprise, as follows from the reference to the exception contained in the final part of the body of the provision, the claims enumerated in the various paragraphs of that article.
One can even say that the articulation of "literal-systematic" of all the legal or regulatory provisions concerning tax arbitration clearly reveals, in its succession or sequence, a "restrictive intent". Look, indeed, at:
- article 124 of Law No. 3-B/2010, of 28 April, which authorized the Government "to legislate in order to institute arbitration as an alternative form of jurisdictional resolution of conflicts in tax matters" (paragraph 1), admitted the tax arbitral process as an "alternative procedural means to the judicial challenge process and to the action for the recognition
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