IRS Simplified Regime for Sports Referees: Coefficient Application Annulled by STA (Case 421/2019-T)

TAX ARBITRATION JURISPRUDENCE

Case No. 421/2019-T

Decision Date: 2019-10-29

Income Tax (IRS)

Claim Amount: € 948.33

Subject Matter: IRS – Simplified regime – sports arbitrator – application of coefficients.

*Arbitral decision annulled by Supreme Administrative Court judgment of 9 December 2020, appeal no. 92/19.9BALSB, which decides in replacement.

ARBITRAL DECISION

The Arbitrator, Professor Doctor Jónatas Machado, designated by the Deontological Council of the Centre for Administrative Arbitration to constitute this Arbitral Tribunal, hereby pronounces the following decision:

1 REPORT

1. A..., taxpayer no..., and spouse B..., taxpayer no..., resident at Street..., no..., ..., ...-... Foz do Sousa, (hereinafter Claimants) having been notified of the dismissal order issued by the Head of Finance, in the voluntary complaint procedure no. ...2019..., which had as its object the demonstration of IRS liquidation no. 2018..., for the year 2017, hereby request, in accordance with the provisions of article 2, no. 1, point a), 5, no. 2, point a), 6, no. 1, 10, no. 1, point a), all of the Legal Regime of Tax Arbitration (RJAT) and article 102, no. 1, point b) of the Code of Tax Procedure and Process (CPPT), the constitution of a single arbitral tribunal with a view to declaring the illegality of that tax act.

2. The request for constitution of the arbitral tribunal was accepted by the President of CAAD on 21.06.2019.

3. In accordance with articles 5, no. 2, point a), 6, no. 1, and 11, no. 1 of RJAT, the Deontological Council of this Centre for Administrative Arbitration (CAAD) appointed Professor Doctor Jónatas Machado as sole arbitrator on 09.08.2019.

4. The parties were duly notified of this appointment, to which they raised no objection, in accordance with articles 11, no. 1, points b) and c) and 8 of RJAT and 6 and 7 of the CAAD Deontological Code.

5. By virtue of the provision in point c) of no. 1 and no. 8 of article 11 of RJAT, as communicated by the President of the Deontological Council of CAAD, the Arbitral Tribunal was constituted on 30.08.2019.

6. The Tax Authority (hereinafter Respondent), having been notified, under article 17 of RJAT, to present its response, did submit its defence on 26.09.2019, contending for the dismissal of the present request for arbitral pronouncement, the maintenance in the legal order of the impugned tax liquidation act and its absolution from the claim, with the due legal consequences.

7. As it was not requested by the parties and was deemed unnecessary, the tribunal dispensed with the meeting provided for in article 18 of RJAT, through an order issued on 15.10.2019.

8. In that same order, final submissions were also dispensed with.

1.1 Description of Facts

1. The male Claimant declared the beginning of his activity on 30.05.2016, under CAE Code 93192 – Other Sporting Activities, n.e.c., having opted for the simplified regime for the purposes of taxation under IRS of his Category B income.

2. In 2017, the Claimants submitted a joint income declaration, having filled out Schedule B of the model 3 IRS declaration relating to "Category B Income", opting for completion of the field concerning the "Simplified Taxation Regime".

3. In section 3A of said Schedule – "Identification of Taxpayer(s)", field 08 – "CAE Code (Professional, Commercial and Industrial Income)", the male Claimant inserted the code 93192 – other sporting activities.

4. The said CAE, according to the Portuguese Classification of Economic Activities (CAE Rev. 3), comprises the activities of "producers and promoters of sporting events with or without facilities; promotion of sporting events; athletes, arbitrators, timekeepers and other independent sportspeople; stables, kennels and garages, related to sporting activity; support for recreational and sporting fishing and hunting; and mountain guides. Includes the management of hunting and fishing areas". Field 07, of section A, of Schedule B of the periodic income declaration for the year 2017, concerning the "Code of the Table of activities of article 151 of CIRS", was not completed.

5. In the year 2017, the male Claimant declared, in section 4A, field 404 of Schedule B – "Income from provision of services not provided for in previous fields", income in the amount of €10,802.50, deriving from his activity as an arbitrator.

6. Subsequently, the male Claimant was notified that "The income declaration for the year 2017 was selected for analysis because the following situations were detected: Need to prove the type of income declared, considering the activity codes declared or recorded in the register".

7. The Claimant submitted a response to said notification, having been informed by the Tax Authority that the income earned should be declared in field 403 of section 4A of schedule B and notified, by registered mail, dated 21.09.2018, to exercise his right of hearing within 15 days, as provided for in article 60 of the General Tax Law (LGT), which he did via the internet on 09.10.2018.

8. By order issued on 12.10.2018, the Tax Authority considered that "[t]he income from the activity of futsal arbitrator should be entered in field 403 of section 4-A of schedule B of the model 3 IRS declaration and the determination of taxable income is obtained through the application of the coefficient 0.75, provided for in point b) of no. 1 of article 31 of the IRS Code", having officially amended said declaration by framing such income therein.

9. The Tax Authority considered that the sum of €10,802.50 (ten thousand, eight hundred and two euros and fifty cents), declared by the male Claimant in field 404 of Schedule B (Income from provision of services not provided for in previous fields), should instead appear in field 403 (Income from professional activities specifically provided for in the Table of art. 151 of CIRS).

10. Following this, the Claimants were notified of the refund of the sum of €948.33 (nine hundred and forty-eight euros and thirty-three cents), as per the liquidation statement no. 2018..., attached as document no. 6.

11. Not accepting said liquidation statement, the Claimants submitted a voluntary complaint on 04.03.2019 with this act as its object, having been notified on 20.03.2019 of the decision of dismissal.

1.2 Arguments of the Parties

1. The arguments brought in the proceedings centre on the meaning and connotative and denotative scope of the concept "Sportspeople", to which corresponds the CAE 1323.

2. The Claimants contend for the illegality of the liquidation and the decision dismissing the voluntary complaint, for a defect in qualification and quantification, with arguments which are summarized below:

a) Article 31, no. 1, point b) of CIRS, in the version in force at the time, provided that "(...) the determination of taxable income is obtained through the application of the following coefficients: (...) b) 0.75 of the income from professional activities contained in the table referred to in article 151";

b) The CIRS provision, in the version given by Law no. 42/2016, of 28 December, established that "(...) the determination of taxable income is obtained through the application of the following coefficients: (...) c) 0.35 to income from provision of services not provided for in the previous points";

c) The activity of arbitrator is not contained in the table referred to in article 151 of CIRS, and there is no basis for the Tax Authority's understanding that the male Claimant's income should have been declared in field 403 and the coefficient of 0.75 applied thereto;

d) To values declared in field 404 of schedule B (Category B income not included in previous fields) the coefficient 0.35 applies, in accordance with article 31, no. 1, point c) of CIRS;

e) To the male Claimant's income, as it does not derive from activities contained in the table referred to in article 151 of CIRS, the coefficient 0.35 should have been applied, in accordance with point c) of no. 1 of article 31 of CIRS;

f) This is, moreover, the understanding conveyed by the Tax Authority itself which in Circular Notice no. 20.187, of 05-04-2016, in the instructions for completing field 403 - Income from professional activities specifically provided for in the Table of art. 151 of CIRS states that "income must be declared in this field (...) derived from provision of services of professional activities specifically provided for in the table of activities referred to in article 151 of CIRS" (cf. document 7);

g) It follows from this information, a contrario, that income not provided for in the table must not be declared in field 403;

h) The same understanding results from the Opinions of the Institute of Certified Accountants according to which "the coefficient of 0.75 applies only to provision of services specifically provided for in the Annex List referred to in article 151 of the IRS Code. A new coefficient of 0.35 has been created for the remaining services of provision of services"; (Documents 8 and 9)

i) Such opinions conclude that the activity of arbitrator, as it does not fit specifically within any of the professional activities contained in the annex list to article 151 of CIRS, shall fall within point c) of no. 1 of article 31 of CIRS and accordingly, income therefrom must be entered in field 404 of section 4A of schedule B;

j) To the interpretation of tax provisions apply, in accordance with no. 1 of article 11 of LGT, the rules and general principles of interpretation of laws, in particular article 9 of the Civil Code;

k) According to general rules of legal hermeneutics, the letter of the law is the minimum limit of the interpretive task, in the sense that it is from the legislative text that one must start to determine the meaning of the provision;

l) The letter of the law is also its maximum limit, since it is not possible to attribute to the provision a meaning that is not minimally provided for in its letter of the law;

m) As the letter of the law is the maximum limit of the interpretive task, it is not possible to conclude that income other than that specifically provided for in article 31, no. 1, point b) of CIRS should receive the same treatment, especially when the legislator itself created, in parallel to that specific category of income, a residual category contained in point c) of the same article, which includes "income from provision of services not provided for in the previous points";

n) In Tax Law the principle of specific typicality applies, which requires an exhaustive enumeration of the facts or realities that, within each generic type of the object of the normative scope of application, are indicated by law as object of application;

o) The activity of arbitrator does not have an unequivocal and clear provision in the said table, since, although related to some sporting activity, it is not a sporting activity per se, and therefore cannot be framed within the scope of application of article 31, no. 1, point b) of CIRS;

p) As the application of the coefficient 0.75 to income from the activity of arbitrator is not exhaustively provided for in article 31, no. 1, point b) of CIRS, which is an activity not provided for in the table referred to in article 151 of CIRS, the coefficient cannot be applied to income from that activity, under penalty of violating the principle of legality provided for in article 106, no. 2 of the Constitution of the Portuguese Republic (CRP);

q) The arbitral jurisprudence of CAAD in the context of Cases 372/2017-T, 251/2017-T, 141/2017-T, 107/2016-T and 196/2017-T) has pronounced itself in a sense favourable to the position of the claimants, with special emphasis on the decision in Case no. 510/2017-T concerning the activities of Personal Trainer and Arbitrator.

1. The Tax Authority begins by contending for the incompetence of the tribunal on grounds of exception without ceasing to contend for the maintenance of the impugned act on the basis of the following grounds:

a) The act which is the subject of the dispute cannot be qualified as an act of determining the taxable matter giving rise to the liquidation of a tax for the purposes of point b), of no. 1 of article 2 of RJAT;

b) What is at issue in this case is the framing of Category B income in field 403 and not in field 404, as the Claimants wish;

c) The act challenged does not form part of the potential list of acts determining taxable matter or taxable capacity in that it does not apply a set of factors, objective or subjective, which lead to the liquidation of the corresponding tax, but is located, rather, "upstream" of the determination of taxable matter;

d) The "fiscal framing" procedure, being prejudicial in relation to the "liquidation act" proper, is not, however, to be confused with the act of determining taxable matter or taxable capacity;

e) The proper means for impugning these acts, which do not involve the examination of the legality of liquidation acts and which are also not acts determining taxable matter or taxable capacity is not judicial impugation but rather special administrative action (point p), of no. 1 of article 97 of CPPT and article 37 et seq. of CPTA);

f) We are faced with an act of the tax administration that does not form part of the acts provided for in points a) and b) of no. 1 of article 2 of RJAT, whereby the Tribunal Arbitral should judge the exception invoked of absolute incompetence of the arbitral forum by reason of subject matter and, as a consequence, reject the request for arbitral pronouncement, absolving the Tax Authority from the proceedings;

g) The activity of futsal arbitrator constitutes a provision of services specifically provided for in the table of activities referred to in article 151 of CIRS, under the code "1323 – Sportspeople";

h) The code "1323 – Sportspeople" is comprehensive and encompasses, in addition to athletes, all sporting agents involved in sporting activities;

i) Given that the male Claimant's income derives from an activity specifically provided for in the table of activities referred to in article 151 of CIRS, such income falls within point b) of no. 1 of article 3 of CIRS;

j) Consequently they are entered in field 443 of section 4A of the income declaration – model 3, and the determination of taxable income is obtained through the application of the coefficient 0.75, provided for in point b) of no. 1 of article 31 of CIRS";

k) In this sense, the Tax Authority pronounced itself in the Binding Opinion issued in case no. 920/2018, with concurring order of the Deputy Director General of Income Tax, of 02-05-2018, in which the matter is "Income declaration from futsal arbitrator activity";

l) The income earned by the male Claimant derives from activities referred to in article 151 of CIRS, with no doubt remaining that the same fall within point b) of no. 1 of article 3 of CIRS and, consequently, must be entered in field 403 of section 4A of schedule B of the income declaration – model 3 and the determination of taxable income is obtained through the application of the coefficient 0.75 provided for in point b) of no. 1 of article 31 of CIRS.

1.3 Case Disposition

1. The request for arbitral pronouncement is timely, in accordance with no. 1 of article 10 of RJAT.

2. The Arbitral Tribunal is regularly constituted (articles 5, no. 2, 6, no. 1, and 11 of RJAT), and is materially competent (articles 2, no. 1, point a) of RJAT), and the exception invoked by the Tax Authority should be judged as unfounded, in that what is at issue is the legality of the impugned liquidation, since the question of the qualification and fiscal framing of a given income, in the context of liquidation, concerns the correct interpretation and application of the law. In the concrete case, the application and interpretation of article 31 of CIRS by the liquidation statement no. 2018... constitutes a question of legality of liquidation.

3. The parties have personality and legal capacity and are duly represented.

4. The proceedings do not suffer from nullities and can proceed to a decision on the merits of the case.

2 GROUNDS

2.1 Facts Established as Proven

1. Based on the documents brought in the proceedings, the following facts relevant for the decision of the case sub judice are established as proven:

a) The male Claimant declared the beginning of his activity on 30-05-2016, under CAE Code 93192 – Other Sporting Activities, n.e.c., having opted for the simplified regime for the purposes of taxation under IRS of his Category B income. (cf. document no. 2.)

b) In the year 2017, the male Claimant declared, in section 4A, field 404 of Schedule B – "Income from provision of services not provided for in previous fields", income in the amount of €10,802.50. (cf. document no. 3)

c) The male Claimant was notified that "[t]he income declaration for the year 2017 was selected for analysis because the following situations were detected: Need to prove the type of income declared, considering the activity codes declared or recorded in the register". (cf. document no. 4)

d) The Tax Authority considered that the sum of €10,802.50 (ten thousand, eight hundred and two euros and fifty cents), declared by the male Claimant in field 404 of Schedule B (Income from provision of services not provided for in previous fields), should instead appear in field 403 (Income from professional activities specifically provided for in the Table of art. 151 of CIRS). (document no. 4; PA)

e) The Claimant submitted a response to said notification. (document no. 5)

f) The Claimants were notified of the refund of the sum of €948.33 (nine hundred and forty-eight euros and thirty-three cents), as per the liquidation statement no. 2018... . (document no. 6)

2.2 Facts Not Established as Proven

1. With relevance for the decision on the merits there are no facts alleged that should be considered as not proven.

2.3 Grounds

1. With regard to the facts, the Tribunal does not have to pronounce itself on everything that was alleged by the parties, it being for it to select the facts that matter for the decision and distinguish the proven facts from the unproven facts (cf. art. 123, no. 2, of CPPT and article 607, no. 3 of CPC, applicable ex vi article 29, no. 1, points a) and e), of RJAT).

2. The relevant facts for the trial of the case are chosen and defined according to their legal relevance, which is established with regard to the various plausible solutions of the questions at issue in the dispute (v. 596, no. 1, of CPC, ex vi article 29, no. 1, point e), of RJAT).

3. Thus, the facts listed above were considered proven, with relevance for the decision.

2.4 Question for Decision

1. Having judged the exception invoked by the Tax Authority as unfounded (v. supra § 24), the question for decision concerns whether the concept "Sportspeople", with the CAE 1323 of ANNEX I of CIRS, Table of activities of article 151, should be interpreted and applied so as to encompass the activity of futsal arbitrator.

2. At the time of the facts in question, article 31 of CIRS, with the heading "Simplified regime", in the version given by Law no. 83-C/2013, of 31 December - State Budget Law for 2014, began to provide for new coefficients for obtaining taxable income when the determination of business and professional income, of Category B, is made on the basis of the application of the rules arising from the simplified regime. It provided there:

"1 - Within the simplified regime, the determination of taxable income is obtained through the application of the following coefficients:

...

b) 0.75 to income from professional activities specifically provided for in the table referred to in article 151;

c) 0.35 to income from provision of services not provided for in the previous points;"

1. Article 151 of CIRS provides that "The activities carried out by IRS taxpayers are classified, for the purposes of this tax, in accordance with the Classification of Portuguese Economic Activities by Branch of Activity (CAE), of the National Institute of Statistics, or in accordance with the codes mentioned in a table of activities approved by order of the Minister of Finance".

2. The Classification of Economic Activities of the National Institute of Statistics, in its section R, concerning artistic activities, entertainment and recreational activities, includes CAE 93192, corresponding to "Other Sporting Activities, n.e.c.". It expressly states there that the same "[c]omprises the activities of: producers and promoters of sporting events with or without facilities; promotion of sporting events; athletes, arbitrators, timekeepers and other independent sportspeople; stables, kennels and garages, related to sporting activity; support for recreational and sporting fishing and hunting; and mountain guides. Includes the management of hunting and fishing areas."

3. The male Claimant carries out the activity of futsal arbitrator. As referred to above, in the description of facts, when he completed his income declaration for the year 2017, he inserted the code 93192, "other sporting activities", in section 3A of said Schedule – "Identification of Taxpayer(s)", field 08 – "CAE Code (Professional, Commercial and Industrial Income)". However, Annex I of CIRS contains the Table of activities of article 151, where the concept of "Sportspeople" with CAE 1323 is found. In accordance with article 31, no. 1, points b) and c), to professional activities specifically provided for in the table of activities of article 151 of CIRS, the coefficient 0.75 applies, whereas to those not specifically provided for, the coefficient 0.35 applies. It should be noted that the wording of the article requires not a mere generic provision, but a specific provision. The question is whether the professional activity of arbitrator can be considered specifically provided for in the table of activities where the concept of "Sportspeople" is used.

4. The Tax Authority pronounced itself to the effect that the code "1323 – Sportspeople" is comprehensive and encompasses, in addition to athletes, all sporting agents involved in sporting activities, whereby the male Claimant's income from an activity specifically provided for in the table of activities referred to in article 151 of CIRS must be entered in field 443 of section 4A of the income declaration – model 3 and framed within point b) of no. 1 of article 3 of CIRS, the corresponding coefficient of 0.75 being applicable thereto.

5. Regarding the application of the table of article 151 of CIRS, the arbitral jurisprudence of CAAD has already pronounced itself several times, although not necessarily on a question identical to that in the present proceedings. In Case no. 196/2017-T, the principle of specific typicality, inherent in the principle of tax legality, which prevails in tax law, was invoked. In Cases no. 07/2016-T and no. 251/2017-T, the relevance of the literal element as the maximum limit of the interpretive task was underlined. In Case no. 372/2017-T, emphasis was placed on the fact that article 31 of CIRC requires a specific provision in the table of activities of article 151 of CIRS. These are elements of undeniable hermeneutical and methodological relevance that cannot fail to be considered in the decision of the concrete case.

6. However, they do not impose that the orientation followed by the learned decision in Case no. 510/2017-T, concerning the activities of Personal Trainer and Arbitrator, be followed. In the view of this tribunal, the activity of sports arbitrator, as it easily falls within the concept of sporting activity, contained in the Classification of Economic Activities of the National Institute of Statistics, also naturally, immediately and logically transparently subsumes itself to the concept of Sportspeople, of the Table of activities of article 151 of CIRS, Annex I. A Sportsperson is one who engages in a sporting activity. If sports arbitration can be considered a sporting activity, then those who carry it out can, understandably, be designated as Sportspeople, without any intellectual strain. The concept "Sportspeople" – of the Table of activities of article 151 of CIRS - does not have to encompass only the actual sporting practitioners themselves, whether professional or non-professional, but can designate other sporting agents intimately connected to the competitive practice of a given sport. This is similar to what occurs with the concept of "sporting activity".

7. In fact, sports arbitration assumes decisive importance in the realization of official sporting competitions, being a sine qua non condition of the same. Furthermore, the futsal arbitrator actively participates in the realization of the sporting competition, being present in the playing area and actively interacting with the athletes in competition. It falls to him the important task of carefully following all concrete incidents of the competition and ensuring the interpretation and application of sporting rules, in terms that satisfy the high requirements of rigour and uniformity imposed by sporting federations, not only at national level but also at regional and world level.

8. To this effect, the discipline of access and exercise of the activity of sports arbitrator, including its respective classification, is defined and structured by sporting federations, being an integral part of the respective activity, as will be seen below. Arbitrators are required to have full and updated knowledge of the rules of the sport whose competition they are called upon to arbitrate, participation in initial and continuous training courses being required and the fulfilment of the requirements of physical and psychological fitness necessary for the exercise of the activity. In the specific case of futsal, the activity of arbitrator is framed within the Portuguese Football Federation, UEFA and FIFA.

9. It should be noted that the Basic Law of the Sporting System, in article 2 of Decree-Law no. 146/93, of 26 April, subjects arbitrators to compulsory sports insurance. The same is said of the Basic Law of Physical Activity and Sport, Law no. 5/2007, of 16 January, where among other things it is provided in article 14 that sporting federations encompass, among others, arbitrators, who are inseparable from the development of the respective sporting discipline. Article 40, nos. 1 and 4, of this statute, inserted in section III concerning the protection of sporting agents, applies to arbitrators, with the necessary adaptations, the regime of access to sports medicine. In section IV, concerning support measures for high performance sport, aimed at the pursuit of excellence results in accordance with international standards, it is established the possibility that the same be granted not only to the sporting practitioner but also to technicians and arbitrators.

10. Article 2 of Decree-Law no. 248-B/2008, which established the Legal Regime of Sporting Federations and the Conditions for Granting the Status of Public Utility in Sport, frames the activity of arbitrator within the concept of sporting federation. The same is true of article 2 of Decree-Law no. 93/2014, of 23 June, which amended and republished it. As referred to in article 45 of this statute, arbitrators are subject to a regime of training, coordination and classification within sporting federations.

11. In light of the considerations adduced, the reconduction of the activity of arbitrator to the concept "Sportspeople", with CAE 1323, of the Table of activities of Article 151 of CIRS, does not represent any violation of the specific typicality inherent in the principles of tax legality and legal certainty and protection of citizens' confidence, which embody the constitutionally structural principle of the Rule of Law. It is a conceptual, hermeneutical and methodological operation whose raison d'être appears entirely reasonable and intelligible, in the light of the legal regime of sporting activity and sporting federations.

12. Thus, the orientation followed in the Binding Opinion issued in Case no. 920/2018, with concurring order of the Deputy Director General of Income Tax, of 02.05.2018, concerning the subject of "Income declaration from futsal arbitrator activity" appears correct to the eyes of this tribunal. There it was contended that the CAE Code 1323 – "Sportspeople" is comprehensive, encompassing, "in addition to athletes, all sporting agents participating in sporting activities". That orientation is compatible with the principle of precision, clarity and determinability of laws, in that it confers on the concept "Sportspeople" an intension and an extension entirely endowed with plausibility and reasonableness, which have nothing arbitrary, surprising, unexpected or unforeseeable about them.

13. In accordance with article 11, no. 1, of LGT, "[t]he determination of the meaning of tax provisions and in the qualification of the facts to which they apply shall observe the rules and general principles of interpretation and application of laws." For its part, article 9, no. 1, of the Civil Code provides that "[i]nterpretation must not be confined to the letter of the law, but must reconstruct from the texts the legislative thinking, taking especially into account the unity of the legal system, the circumstances in which the law was drawn up and the specific conditions of the time in which it is applied."

14. The understanding advocated by the Tax Authority aligns itself as the most consistent with a unitary vision of the legal system, as a system of values, principles and rules. Indeed, it is entirely suited to the material meaning derived from important principles of the tax system. This is notably true as regards the principles of tax justice, tax equality – horizontal and vertical – and the consideration of subjective capacity to pay, which have their ultimate foundation in the constitutional order (v.g. articles 1, 2, 13, 103 and 104, of CRP). The principle of taxation according to capacity to pay (Besteuerung nach der Leistungsfähigkeit) has long been recognized as a structural principle of tax law, deduced from the principles of tax justice and equality, in particular equality before public burdens. Taxation according to capacity to pay is of particular importance in income tax. The CIRS must be interpreted and applied, by the Tax Authority and by the courts in accordance with these constitutional principles, also taking into account the purposes and objectives of taxation (articles 5 and 7 of LGT).

15. In this context, the application of the coefficient 0.75 to athletes and arbitrators means that they are recognized as having an automatic deduction of 25%. This appears entirely reasonable, in that both can normally be expected to bear some expenses in order to be able to carry out their activity and obtain the corresponding income. If the coefficient 0.35 were applicable to arbitrators – differently from what occurs with actual sporting practitioners – this would mean, in practice, recognition of an automatic right to deduct expenses in the amount of 65% of the income earned, which appears manifestly unequal, disproportionate and devoid of sufficient rational and material foundation. Such a differentiation of treatment, applying to sporting practitioners a coefficient of 0.75 and to arbitrators one of 0.35, would represent a differentiation hardly compatible with the fairness of the tax system, because violative of the principles of capacity to pay and prohibition of arbitrariness, which are sub-principles of the principle of tax equality. In light of the foregoing, the CAE 1323 "Sportspeople" – of the Table of activities of article 151 of CIRS should be applied in the concrete case, with the coefficient 0.75 provided for in article 31, no. 1, point b) of CIRS being applicable to the activity of futsal arbitrator, in the version in force at the time of the facts.

3 DECISION

Wherefore this Arbitral Tribunal decides:

a) To judge the exception invoked by the Respondent as unfounded;

b) To judge the present request for arbitral pronouncement as unfounded, for lack of proof, with the tax liquidation act challenged remaining in the legal order, thus absolving, accordingly, the Respondent entity from the claim.

4 VALUE OF THE CASE

The value of the case is fixed at € 948.33, in accordance with article 306, no. 1 of CPC and article 97-A, no. 1, a), of the Code of Tax Procedure and Process, applicable by virtue of points a) and b) of no. 1 of article 29 of RJAT and no. 2 of article 3 of the Regulation of Costs in Tax Arbitration Proceedings.

5 COSTS

The arbitration fee is fixed at €306.00, at the expense of the Claimants, in accordance with articles 12, no. 2, and 22, no. 4, both of RJAT, and article 4, no. 4, of the Regulation of Costs in Tax Arbitration Proceedings and Table I attached thereto.

Let notice be given.

Lisbon, 29 October 2019

The Arbitrator

Jónatas E. M. Machado