CAAD Case 390/2018-T: IRC Depreciation and Amortization Tax Assessment Challenged

ARBITRAL DECISION

I - REPORT

A - IDENTIFICATION OF THE PARTIES

Claimant: A... S.A., Tax Identification Number ..., with registered office at Street ..., floor ..., ...-... Oeiras, hereinafter referred to as the Claimant or Taxpayer.

Respondent: Tax and Customs Authority, hereinafter referred to as the Respondent or TA.

The Claimant filed a request for constitution of an Arbitral Tribunal in tax matters and a request for arbitral decision, pursuant to the provisions of article 2(1)(a) and article 10(1)(a), both of Decree-Law No. 10/2011, of 20 January (Legal Regime of Arbitration in Tax Matters), hereinafter abbreviated as LRAT.

The request for constitution of the Arbitral Tribunal was accepted by the President of the Administrative Arbitration Centre (CAAC), and in accordance with the provisions of article 11(1)(c) of Decree-Law No. 10/2011, of 20 January, as amended by article 228 of Law No. 66-B/2012, of 31 December, on 2018-05-28 the Tax Authority was notified.

The Claimant did not proceed with the appointment of an arbitrator, whereupon, pursuant to the provisions of article 6(1) and article 11(1)(b) of Decree-Law No. 10/2011, of 20 January, as amended by article 228 of Law No. 66-B/2012, of 31 December, the Deontological Council appointed Arbitrator Rita Guerra Alves, who accepted the appointment in accordance with legal provisions.

On 2018-10-04 the parties were duly notified of this appointment, and did not manifest any intention to refuse it, in accordance with article 11(1)(a) and (b) of the LRAT and articles 6 and 7 of the Deontological Code.

The Single Arbitral Tribunal was regularly constituted on 2018-10-24, to review and decide on the subject matter of the present dispute, and on that same day the Tax and Customs Authority was automatically notified, as recorded in the respective minutes.

No witness testimony was presented, and following the procedural course, both parties accepted the dispensation of the meeting referred to in article 18 of the LRAT.

The parties possess legal standing and capacity, are legitimate and are represented (articles 4 and 10(2) of the same statute and article 1 of Ordinance No. 112-A/2011, of 22 March).

The process is not affected by defects that would invalidate it.

B - CLAIM

The Claimant petitions for a declaration of illegality of the tax act imposing Corporate Income Tax (IRC) No. 2017..., corresponding to the fiscal year 2013, in the amount of € 29,478.10 (twenty-nine thousand four hundred and seventy-eight euros and ten cents).

C - GROUNDS FOR CLAIM

To support its request for arbitral decision, the Claimant alleges, seeking a declaration of illegality of the tax act imposing Corporate Income Tax (IRC) described in point 1 above, the following:

On 19 May 2014, A..., as the parent company, submitted the Group IRC Model Declaration 22, identified with No. ..., for the fiscal year 2013.

In compliance with Service Order No. OI2016..., of 9 May 2016, issued by the Finance Directorate of ..., an internal inspection procedure was conducted for the period 2013 of the company forming part of the Group, B..., S.A. ("B..."), from which corrections to the taxable profit of this company resulted.

In this context, the Claimant was notified of the IRC settlement statement No. 2017... and corresponding account adjustment, on 2 August 2017, relating to the taxation period of 2013.

The IRC settlement adjustment totalled € 1,975,346.39, including compensatory interest, with a payment deadline of 22 September 2017.

This amount includes the corrections made to the taxable result of the group, a value which includes € 99,925.76 relating to corrections made to the taxable profit of B..., to the tax losses deducted and to the adjustment of PEC.

The Claimant argues that the corrections to the taxable profit of B..., in the total amount of € 99,925.76, result from the following realities:

a.) depreciation charges practised on the part of the real property that allegedly corresponds to land, in the total amount of € 87,923.31, in accordance with article 34(1)(b) of the IRC Code; as well as,

b.) depreciation charges allegedly practised beyond the useful life, in the total amount of € 12,002.45, as provided in article 34(1)(d) of the IRC Code.

Regarding depreciation charges practised on the part of the real property that allegedly corresponds to land, in the total amount of € 87,923.31, the Claimant argues that, taking into account the gross value of the asset item in question (€ 1,758,466.17), this results in depreciation of € 87,923.31 (€ 1,758,466.17 x 5%), which, in the TA's view, is not acceptable for tax purposes as it concerns land.

B... owns 25 wind turbines in its assets, with the C... Park ("Park") corresponding to the fourth largest Wind Park held by the A... Group in terms of installed capacity (70MW) and number of wind generators.

Additionally, it notes that the C... Wind Park is located along a ridge approximately 10 km long, encompassing the parishes of ..., ... and ..., in the municipality of ..., and the parishes of ..., ..., ..., ..., ... and ... in the municipality of ... .

It is readily understandable that given the high number of wind generators constructed and the area required for the implementation of the Wind Park, the total investment made with the construction of the Park also involved high costs related to the use of the land necessary for that investment.

These costs relating to the use of land occur at two distinct levels: (i) those occurring until the construction phase (inclusive) and (ii) those occurring during the operation of the wind park.

With regard to the costs incurred during the operation of the Park, these correspond to the payment of rents for the land where the Park is located and of which B... is the tenant, since, the Claimant stresses once more, B... does not own any land.

With respect to the costs incurred until the construction phase, these, in this specific case, corresponded to costs relating to rights of use of the land, incurred until the initial construction phase of the C... Wind Park.

Indeed, these were the costs that were capitalized on the balance sheet of the company before the commencement of operation of the Park, resulting in depreciation in the amount of € 87,923.31, corrected by the TA in the inspection and considered by it as not acceptable for tax purposes.

Emphasizing once more the fact that B... does not own any land, the Claimant clarifies that, in order for that company to proceed with the construction of the C... Wind Park, it was necessary to guarantee, ab initio, the right to use the desired land.

With that objective, B... proceeded with the conclusion of land lease agreements well before the commencement of park operation and even before the commencement of its construction.

B..., as is readily understandable from common sense, would not have proceeded to commence construction of the Park without having the corresponding right of use of the necessary spaces, not only to support the wind generators, but also to use some area surrounding them – an area necessary for construction work.

Additionally, the costs relating to rights of use of the land include, by way of example, the costs incurred by B... with the commitment it assumed to improve existing accessibility, improving not only the existing road within the Park through its widening, but also the access roads to it.

Concomitantly, some activities were carried out in areas that, although not forming part of the Park, adversely affected adjacent areas.

By way of example, excavations were carried out for cable burial trenches.

The mentioned activities determined a prior agreement on compensation with the owners of affected land.

The improvement of access roads, some previously non-existent in that geographic extent, as well as the movement of machinery in that area required various interactions and requests for authorization from the respective landowners.

There are also the costs resulting from the natural difficulties of handling, negotiating and securing the respective rights of use of the land, owner by owner.

Indeed, those activities formed part of an administrative and project management process that was very important, which naturally entailed even greater investment effort with the development of the park.

Therefore, in addition to costs directly attributable to rents and compensation paid to landowners, there are also, as already mentioned, other costs related to the process described above.

Thus it is found that the use of the denomination "land", with identification of location "..." on the depreciation schedule in question (with acquisition date of 2009), consisted only in a way of identifying the amounts incurred with the use of land for purposes of the wind park construction project mentioned.

Notwithstanding the denomination "land", the fiscal code 2470 relating to development projects would also have been assigned to the same item.

From the foregoing, the Claimant considers it to have been demonstrated that the expenditure in question of € 87,923.31 has nothing to do with depreciation of land.

Indeed, as recorded in the urban property registers, B... holds only 25 urban properties with a total patrimonial value of € 12,594,720.00 distributed among 11 items with an individual value of € 503,800.00 and 14 items with an individual value of € 503,780.00.

In those property registers it is easily apparent, given the description included therein, that the urban items mentioned are wind generators located on land of which B... is the tenant, paying annual rent for the lease of the same.

Given the arguments set forth, not owning any land and the amounts recorded in the denomination of "land" in the depreciation schedule being related to costs of use (and not acquisition) of others' land, the depreciation charges practiced, not satisfying the provision of the norm used as the basis for the correction provided by the TA, should be tax-accepted in general terms.

Regarding the alleged depreciation charges practised beyond the useful life, as provided in article 34(1)(d) of the IRC Code, the Claimant argues:

The remainder of the corrections made by the TA to the taxable profit of B... in the inspection consists of alleged depreciation beyond the maximum period of useful life of assets that would have been practised by the taxpayer in the taxation period in question, in the amount of € 12,002.45.

Although this is not at issue in the case, so that no doubts remain for the learned Tribunal, the net income in question was fully taxed in prior fiscal years and resulted from the fact that the company had taken into account for purposes of determining its taxable profit (i) income relating to energy sales before the Park commenced operations as well as (ii) interest relating to financing obtained for its construction.

From all of the foregoing it follows that the TA's decision to deny the granting of the gracious complaint for the fiscal year 2013, as well as the consequent annulment of the IRC settlement act, should be declared illegal and annulled.

D - RESPONSE OF THE RESPONDENT

The Respondent, duly notified for such purpose, timely submitted its response, in which, in brief summary, alleged the following:

Assets designated as "land" are being depreciated, but registered with code 2470, which corresponds to Development Projects, for which a maximum annual depreciation rate of 33.33% is provided, with depreciation being recorded at a rate of 5%.

Now, real property, in the part corresponding to the value of land, is not subject to depreciation, so expenses recorded for that purpose are not tax-deductible, - pursuant to article 34(1)(b) of the CIRC.

On the other hand, also for assets registered with code 2470 – Development Projects – that is, with designations other than "land" the Inspection Services determined that depreciation charges were also applied at a rate of 5%,

That is, lower than the minimum quotas, given the maximum annual depreciation rate of 33.33% for this type of assets.

The Respondent concludes by arguing for the dismissal of the request, as unproven, and consequently for the rejection of the Claim.

E - STATEMENT OF FACTS

For the review of the issues submitted for consideration, it is necessary to first present the relevant factual matter that will allow the Tribunal to understand and render a decision, based on the facts alleged and documentary evidence produced in the case.

With respect to the factual matter considered relevant, this Tribunal accepts as established the following facts:

On 19 May 2014, A..., as the parent company, submitted the Group IRC Model Declaration 22, identified with No. ..., for the fiscal year 2013.

Pursuant to Service Order No. OI2017..., the TA initiated, on 28 April 2017, an internal inspection procedure for the period 2013 relating to the application of RETGS.

In compliance with Service Order No. OI2016..., of 9 May 2016, issued by the Finance Directorate of Bragança, an internal inspection procedure was conducted for the period 2013 of the company forming part of the Group, B..., S.A. ("B..."), from which corrections to the taxable profit of this company resulted.

Under Service Order No. OI2017..., and with direct impact on the tax to be paid by the group subject to RETGS for the period 2013, pursuant to article 115 of the IRC Code, the TA promoted various corrections, from which the following are relevant for these proceedings:

i.) correction to the taxable result of the group, in the amount of € 99,925.76, as a result of corrections made to the individual taxable profit of B... relating to the non-deductibility for tax purposes of certain depreciation and amortization expenses;

The correction to the taxable result of the group, in the amount of € 99,925.76, resulted from the following corrections of the Claimant, as per the following table:

The Claimant proceeded with depreciation of various intangible assets to which it assigned Code 2470, and with the following designations, respectively "Land", "Projects", "Grid Connection", "Coordination", "Access", "Licensing".

The Claimant petitions for the annulment of the said additional settlement act insofar as it reflects the correction to the taxable result of the group for the taxation period of 2013 in the amount of € 99,925.76.

Correction to which IRC tax was applied at the rate of 25%, State Surtax at the rate of 3% and Municipal Surtax at the rate of 1.5%, which consequently determined the tax to be paid of € 29,478.10, [(€ 99,925.76 x 25%) + (€ 99,925.76 x 3%) + (€ 99,925.76 x 1.5%)].

The Claimant was notified of the IRC settlement statement No. 2017... and corresponding account adjustment, on 2 August 2017, relating to the taxation period of 2013.

The payment due was made on 22 September 2017 by the parent company of the group.

A..., as the then Claimant, filed on 29 December 2017 a gracious complaint against said additional IRC settlement act.

On 17 April 2018, the herein Claimant was notified of the Draft Decision in which the rejection of said gracious complaint filed by A... was proposed.

A... was notified, on 23 May 2018, of the complete rejection of the request filed, although the TA had decided, in the course of that rejection, to convert the request for annulment of the correction to the amount deducted under PEC into a request for revision of the tax act for the period 2010, which has since been decided favorably for the Claimant.

On 14 May 2014, B... submitted its individual IRC Model Declaration 22, for the fiscal year 2013.

B... has been since the 2009 taxation period a subsidiary company of the B... Group, which is subject to RETGS pursuant to article 69 et seq. of the IRC Code.

B... operates two wind parks with commencement of operation dates in 2004 and 2009, respectively, and is the owner of 25 wind turbines with a total taxable patrimonial value of € 12,594,720.00.

As recorded in the urban property registers, B... holds 25 urban properties with a total patrimonial value of € 12,594,720.00 distributed among 11 items with an individual value of € 503,800.00 and 14 items with an individual value of € 503,780.00.

As results from the Property Registers, Company B... is not the owner of urban or rural land.

F - UNPROVEN FACTS

Of the facts with significance for the resolution of the case, subject to concrete analysis, those not included in the factual statement above were not proven.

G - ISSUES TO BE DECIDED

Given the positions of the parties, adopted in the arguments presented by each, it falls to the Tribunal to review and decide on:

The declaration of illegality of the tax act imposing Corporate Income Tax (IRC) No. 2017..., corresponding to the fiscal year 2013, in the amount of € 29,478.10 (twenty-nine thousand four hundred and seventy-eight euros and ten cents).

The payment of indemnity interest;

H - MATTERS OF LAW

As previously stated, the central issue to be resolved by this Arbitral Tribunal concerns the review of the legality of the act imposing Corporate Income Tax (IRC) No. 2017..., corresponding to the fiscal year 2013, in the amount of € 29,478.10 (twenty-nine thousand four hundred and seventy-eight euros and ten cents).

Accordingly, the issue to be decided concerns the review of the tax-legal regime for depreciation of assets registered with code 2470 relating to Table I of Regulatory Decree No. 25/2009 of 14 September.

We will thus analyze the corrections to the taxable result of the group, in the amount of €99,925.76, specifically those resulting from corrections made to the individual taxable profit of B... relating to the non-deductibility for tax purposes of certain depreciation and amortization expenses.

First, we will examine the correction made to the asset registered with the designation "Land", with code 2470, relating to the year 2009, with a gross value of 1,758,466.17€, from which a correction of 87,923.31€ resulted.

Second, we will examine the remaining corrections made to assets registered with code 2470 whose year of beginning of use is 2004, from which a correction of 12,002.45€ resulted.

Let us now analyze each of said disputed points.

I - The correction made to the asset registered with the designation "Land":

Regarding the asset registered with the designation of land, the Claimant defends against the above-mentioned correction, alleging that it is permitted to depreciate assets registered with Code 2470, because despite the "land" designation it is not a matter of acquisition of any land, but rather refers to rights of use and costs related to obtaining the spaces necessary for the construction of the wind park, in reality it refers to a Development Project.

Contrary to the Claimant, the Respondent supports its position, arguing that real property, in the part corresponding to the value of land, is not subject to depreciation, so expenses recorded for that purpose are not tax-deductible, - pursuant to article 34(1)(b) of the CIRC.

Let us examine, for this purpose, the provisions on depreciation and amortization provided for in articles 29 et seq. of the CIRC, and the provisions established by Regulatory Decree No. 25/2009, of 14 September, which establishes the regime of depreciation and amortization for purposes of tax on income of corporate entities.

The tax-legal regime for depreciation and amortization is provided for in articles 29 et seq. of the IRC Code, which defines the essential elements of the depreciation and amortization regime, namely the depreciable and amortizable elements, the respective calculation basis and the methods accepted for tax purposes, thus allowing flexibility for economic agents, and it refers when necessary to Regulatory Decree No. 25/2009, of 14 September.

In this way, from the analysis of the tax-legal regime, article 29(1)(a) establishes that "Depreciation and amortization of elements of assets subject to depreciation are accepted as expenses, such being considered: a) Tangible fixed assets and intangible assets;"

Article 34 of the CIRC lists depreciation and amortization that is not deductible for tax purposes. From this legal provision results from its paragraph 1 that the following are not accepted as expenses:

"a) Depreciation and amortization of elements of assets not subject to depreciation;

b) Depreciation of real property in the part corresponding to the value of land or not subject to depreciation;

c) Depreciation and amortization that exceed the limits established in the preceding articles;

d) Depreciation and amortization practised beyond the maximum period of useful life, except in special cases duly justified and accepted by the Tax and Customs Authority;

e) Depreciation of light passenger vehicles or mixed vehicles, including electric vehicles, in the part corresponding to the acquisition cost or revalued value exceeding the amount to be defined by ordinance of the government member responsible for the area of finance, as well as pleasure boats and tourism aircraft, provided that such assets are not allocated to public transport service or are not intended to be leased in the normal exercise of the activity of the taxpayer."

In this way, it results from article 34(1)(b) of the CIRC that depreciation of real property in the part corresponding to the value of land, or not subject to depreciation, is not accepted as an expense.

Let us return now to the case at hand, namely to the proven facts, we find that the Claimant recorded various items with Code 2470, assigning different designations to each of the items. It assigned to the item here under analysis, Code 2470 with the designation "Land".

However, from the analysis of the evidence, it results that the Claimant is not the owner of land, but rather holds rights of exploitation of the respective land on which it develops projects and where it implemented 25 wind turbines, of which it is the owner.

Consequently, we tend to conclude that the designation "Land" is a designation attributed by the Claimant to that item, however that designation does not reflect the material reality of the item, however what is relevant for tax purposes is not the designation attributed, but rather the material truth.

In this way, and in accordance with what has been previously stated, the asset designated by the Claimant as land with the item with Code 2470 is not its property, should not have been designated as land, as results from the evidence presented by the Claimant, reason for which we are not dealing with the value of land, and as such article 34(1)(b) of the CIRC is not applicable to it.

It falls next to analyze whether the said item 2470 falls within the scope of development projects, and whether it is subject to depreciation.

For that purpose, let us examine the provisions of Regulatory Decree No. 25/2009 of 14 September, on the regime of depreciation and amortization for purposes of tax on income of corporate entities, which repealed Regulatory Decree No. 2/90, of 12 January, in order to adopt international accounting standards and the new Accounting Standardization System.

From the provisions of article 1 of said Regulatory Decree, it results that: 1 - Elements of assets subject to depreciation may be subject to depreciation or amortization, such being considered tangible fixed assets, intangible assets and investment properties recorded at historical cost which, on a systematic basis, suffer losses of value resulting from their use or the passage of time.

And articles 16 and 17 establish what development projects are concerned, the admissibility for depreciation and amortization.

Article 16(1) and (2)(a) states: 1 - Intangible assets are amortizable when subject to depreciation, in particular by having limited temporal validity. 2 - The following intangible assets are amortizable: a) Expenses with development projects;

As results from what was previously stated, development projects are amortizable. And article 17(2) establishes the concept of development project expenses, as follows: 2 – For purposes of the provisions of this regulatory decree, expenses with development projects are considered those incurred through the exploitation of results of research work or other scientific or technical knowledge, with a view to the discovery or substantial improvement of raw materials, products, services or production processes.

Therefore, in light of the documentary evidence presented by the Claimant and the legal provisions listed, we find that the asset in question constitutes a Development Project, falling within the concept of development project expenses as provided in article 17(2) of the Regulatory Decree.

Given the legal regime outlined, Development Projects are subject to depreciation under article 29(1)(a) of the CIRC and articles 1, 16 and 17 of the Depreciation and Amortization regime provided in Regulatory Decree No. 25/2009, of 14 September 2009.

Therefore, the correction made to the asset designated as "Land" has been demonstrated that although the Claimant designated it as land, it recorded it with Code 2470 relating to Development Projects, and demonstrated that it was a Development Project, and as such the respective depreciation and amortization is accepted as an expense.

In these terms the said correction in the amount of 87,923.31€ is illegal.

II – Corrections made to assets registered with code 2470 whose year of beginning of use is 2004

The Claimant argues that with respect to the alleged non-deductibility for tax purposes of depreciation beyond the useful life of the assets in the amount of € 12,002.45, this correction is already being added in B...'s Model Declaration 22 for the fiscal year 2013, in field 775.

The Respondent argues that the rates applied by the Claimant to the remaining assets registered with Code 2470 from the year 2004 are lower than the minimum quotas, given the maximum annual depreciation rate of 33.33% for this type of assets, arguing that under article 34(1)(d) of the CIRC, depreciation charges practised beyond the maximum useful life period of assets are not accepted as expenses.

Having reached this point, we will analyze the second part of the disputed issue, that is, to determine whether the Claimant had already considered this depreciation as "Reintegration and amortization not accepted", and consequently whether it is already recorded in field 775, if so then it will result in duplication of the correction made by the Respondent in the amount of € 12,002.45.

Now, from the analysis of the position assumed by the parties, it results that the Claimant used for assets with code 2470 a depreciation rate of 5%, however as the Claimant argues the respective expense was already added in field 775 of the tax return, that is, already accounted for by the Claimant for tax purposes, as a "Reintegration and amortization not accepted".

Consequently, both the Claimant and the Respondent accept that the amount in question is not a tax-accepted expense. Thus there remains only to decide whether it was already added in field 775 of its tax return.

From the analysis of the evidence, it results that the Claimant recorded in field 775 the amount of € 196,363.88, as follows: to the total sum of reintegrations and amortizations in the amount of € 208,366.37, it deducted the amount of € 12,002.45 relating to reintegrations and amortizations not accepted (amount on the items here in question), totaling € 196,363.88.

It is evident that the Claimant in its declaration had not considered the respective depreciation of € 12,002.45€ as a tax-accepted/deductible expense, and the TA in the correction here in question duplicated it.

In consequence, this Tribunal grants the Claimant's request, deciding on the illegality of the tax act imposing Corporate Income Tax (IRC) No. 2017..., corresponding to the fiscal year 2013, in the amount of € 29,478.10 (twenty-nine thousand four hundred and seventy-eight euros and ten cents).

With regard to the other arguments raised by the parties, the Arbitral Tribunal, pursuant to articles 608(2), 663(2) and 679 of the Code of Civil Procedure, as applied by article 29 of the LRAT, is not obliged to review all arguments alleged by the Claimant or the Respondent, when the decision is made upon by the solution already rendered, as is the case in these proceedings, reason for which the remaining issues submitted for decision are prejudiced from consideration.

J - ON INDEMNITY INTEREST

The Claimant also petitions for the payment of indemnity interest.

In light of the foregoing, the settlement in the part encompassed by the annulment results from error of fact and law attributable exclusively to the tax administration, insofar as the Claimant fulfilled its obligation to file a declaration.

Indeed, it has been demonstrated that the Claimant paid the contested tax in an amount higher than what is due. In this manner and by force of the provisions of articles 61 of the CPTRIB and 43 of the LGT, the Claimant has the right to indemnity interest owed, interest which should be calculated from the date of payment of the undue tax (annulled) until the date of issuance of the respective credit note, the payment period for which is counted from the date of the beginning of the period for voluntary execution of this decision (article 61(2) to (5) of the CPTRIB), all at the rate determined in accordance with the provisions of article 43(4) of the LGT.

In light of all of the foregoing and the invoked legal norms, it is decided in favor of granting the Claimant's request.

I - DECISION

Therefore, given all of the foregoing, this Arbitral Tribunal decides:

To find the request for declaration of illegality of the tax act imposing Corporate Income Tax (IRC) No. 2017..., corresponding to the fiscal year 2013, in the amount of € 29,478.10 (twenty-nine thousand four hundred and seventy-eight euros and ten cents) to be well-founded.

To condemn the Respondent to refund to the Claimant said amount unduly assessed and paid, increased by the payment of indemnity interest already accrued relating to the period between the date of payment of the tax and its return, as well as in the payment of accruing indemnity interest from the date of notification of this decision until actual and full payment, all pursuant to articles 61(2) to (5) of the CPTRIB, at the legal rate determined in accordance with the provisions of article 43(4) of the LGT until full reimbursement.

The value of the case is set at € 29,478.10 (twenty-nine thousand four hundred and seventy-eight euros and ten cents), corresponding to the value of the settlement, given the economic value of the case, measured by the value of the contested tax settlement, and in accordance therewith, the costs are set at € 1,530.00 (one thousand five hundred and thirty euros), to be borne by the Respondent, in accordance with article 12(2) of the Tax Arbitration Regime, article 4 of the RCPAT and Table I attached thereto. – article 35(10), and articles 43(1), (4) and (5) of the LGT, articles 5(1)(a) of the RCPT, 97-A(1)(a) of the CPTRIB and 559 of the CPC).

Notify.

Lisbon, 10 January 2019

The Arbitrator

Rita Guerra Alves

Text prepared by computer, pursuant to article 138(5) of the Code of Civil Procedure (CPC), applicable by reference to article 29(1)(e) of the Tax Arbitration Regime.