Summary
Full Decision
ARBITRAL DECISION
The arbitrators José Baeta de Queiroz, Rui Ferreira Rodrigues and Rui Manuel Correia Pinto, appointed by the Deontological Council of the Administrative Arbitration Centre (CAAD) to form the Arbitral Tribunal, hereby agree as follows:
- Report
1.1 "A…, SGPS, S.A.", hereinafter referred to as the "Claimant", taxpayer no.…, with registered office at…, …, no.…, …, municipality of Amadora, requested the establishment of a collective arbitral tribunal, pursuant to the combined provisions of Article 2(1)(a) and Article 10, both of Decree-Law No. 10/2011, of 20 January (Legal Framework for Tax Arbitration, hereinafter referred to only as "LFTA") and Articles 1 and 2 of Ordinance No. 112-A/2011, of 22 March, in which the Tax and Customs Authority (TCA) is the Respondent.
1.2 The request for arbitral pronouncement, filed on 17 August 2016, has as its object the rejection decision by the Head of the Tax Management and Assistance Division (DGAT) of the Large Taxpayers Unit (UGC), by delegation, of 18 May 2016, issued in case no. …2016… concerning the official review procedure provided for in Article 78 of the General Tax Law (LGT) and the consequent annulment of the assessment of corporate income tax (IRC) no. 2012…, of 13 June 2012, for the year 2011, resulting from the self-assessment made in the form 22 declaration (declaration no.…), with the consequent restitution of the amount of €118,763.40.
1.3 The Claimant chose not to appoint an arbitrator.
1.4 The request for establishment of the arbitral tribunal was accepted by the President of the CAAD and notified to the TCA on 09 September 2016.
1.5 The undersigned were appointed by the President of the Deontological Council of the CAAD as arbitrators of the collective arbitral tribunal, pursuant to Article 6 of the LFTA, and acceptance of the appointment was communicated within the applicable timeframe.
1.6 On 25 October 2016, the Parties were notified of this appointment and did not oppose it, pursuant to the combined provisions of Article 11(1)(a) and (b) of the LFTA and Articles 6 and 7 of the CAAD Code of Ethics.
1.7 Thus, in accordance with the provision in Article 11(1)(c) of the LFTA, the collective arbitral tribunal was constituted on 10 November 2016.
1.8 The Respondent was notified, by arbitral decision of 10 November 2016, to, pursuant to Article 17(1) of the LFTA and within a period of 30 days, submit its answer and, if it wished, request the production of additional evidence.
1.9 It was also notified to, within the same timeframe, submit the administrative file (PA) referred to in Article 111 of the Code of Tax Procedure and Process (CPPT).
1.10 On 12 December 2016, the Respondent filed its Answer, defending itself by exception (absolute incompetence of the arbitral tribunal due to violation of material jurisdiction rules) and objection, arguing, respectively, for dismissal of the case, or, alternatively, for dismissal of the request for arbitral pronouncement.
1.11 On the same date, it filed the administrative file as well as four documents referenced therein.
1.12 On 04 January 2017, the Claimant responded to the exception invoked, arguing for its dismissal.
1.13 By decision of 09 January 2017, the meeting provided for in Article 18 of the LFTA was scheduled for the 18th of the same month, in which the witness called by the Claimant would be examined and oral arguments would be presented by the Parties.
1.14 In the referred meeting, the examination of B…, witness called by the Claimant, took place as well as the oral arguments of the Parties.
1.15 The date of 20 March 2017 was initially set for the pronouncement of the respective arbitral award, subsequently postponed to 5 April 2017.
- Clarification of Procedural Defects
Defending itself by exception, the Respondent argues that the request for arbitral pronouncement is directed, albeit indirectly, to the declaration of illegality of a self-assessment act of a tax, in this case, the IRC.
And that the review of this type of acts is only admissible if, at a prior moment, they have been administratively contested, pursuant to Article 131 of the CPPT, therefore it cannot be reviewed in arbitral proceedings.
That paragraph (a), Article 2(2) of Ordinance No. 112-A/2011, of 22 March, excludes from the scope of the TCA's binding to arbitral jurisdiction, "(…) claims relating to the declaration of illegality of self-assessment acts, withholding tax and advance payments that have not been preceded by recourse to the administrative route pursuant to Articles 131 to 133 of the Code of Tax Procedure and Process", and the said text does not mention the official review mechanism provided for in Article 78 of the General Tax Law.
Thus, it is noted that the legislator chose to restrict the jurisdiction in arbitral proceedings to claims relating to the declaration of illegality of self-assessment acts that have been preceded by the complaint provided for in Article 131 of the CPPT.
Therefore, if it is intended to include in the authorization granted the administrative procedure of official review, such formulation appears to be manifestly illegal.
It concludes that the Arbitral Tribunal lacks material jurisdiction to review and decide the request that is the subject matter of the dispute, pursuant to Articles 2(1)(a) and 4(1), both of the LFTA, and Articles 1 and 2(a) of Ordinance No. 112-A/2011, of 22 March, which constitutes a dilatory exception preventing knowledge of the merits of the case, pursuant to Article 576(1) and (2) of the Civil Procedure Code.
The Claimant, in its response to the exception invoked, argues that the applicable rule, both for judicial challenge and for arbitration, is aimed at subjecting to the scrutiny of the TCA all acts on which it has not yet pronounced and had no intervention, and that the TCA should therefore be given the opportunity to pronounce on them before a third entity – judicial or arbitral tribunal – does so regarding their legality.
That the case law of the Supreme Administrative Court (STA) is to the effect that the request for review of the tax act is a mechanism for opening the contentious route that is perfectly equivalent to the necessary gracious reclamation.
That to exclude arbitral jurisdiction, solely because the means used was not effectively the gracious reclamation, would violate the principle of effective judicial protection, enshrined in Article 20 of the Constitution of the Portuguese Republic (CPR).
It further states that the right to resort to judicial or arbitral means is expressly granted in the notification of rejection of the review request.
It concludes that the exception of absolute incompetence ratione materiae should be dismissed, and the Arbitral Tribunal should declare itself competent to review and decide the issue raised following the rejection of the official review request, on pain of violation of Articles 266, 267, 268(4) and 20 of the CPR.
Because the dilatory exception invoked could constitute an obstacle to knowledge of the merits of the case, giving rise to dismissal of the case, see Articles 576(2) and 278(1)(a) of the Civil Procedure Code, it should be reviewed ex officio and with priority – Articles 578 and 608(1) of the same code.
For the Respondent, the Tribunal should declare itself incompetent ratione materiae, and should be absolved of the case pursuant to Articles 2(a) of Ordinance no. 112-A/2011, of 22 March, Articles 96(a), 99(1), 278(1)(a) and 577(a) of the CPC, applicable ex vi Article 29(1)(e) of the LFTA.
This understanding is based on the fact that the request for arbitral pronouncement comes formulated following the rejection of a request for official review of a self-assessment act of IRC for the year 2011, formulated pursuant to Articles 1 and 2 of Article 78 of the General Tax Law, in circumstances at a time when the gracious reclamation deadline referred to in Article 131 of the CPPT had already expired, whereby, given the provisions of Articles 2(1)(a) and 4(1), both of the LFTA, and Articles 1 and 2(a) of the aforesaid ordinance, there is material incompetence of this Arbitral Tribunal to review and decide the request.
The question of the CAAD's jurisdiction has already been extensively discussed in the Arbitral Award issued in Case no. 48/2012-T, of 6 July 2012, with which we agree, and whose sense and conclusions we shall follow.
It states therein that "the jurisdiction of the arbitral tribunals functioning in the CAAD is, in the first place, limited to the matters indicated in Article 2(1) of DL No. 10/2011, of 20 January (LFTA). In a second line, the jurisdiction of the arbitral tribunals functioning in the CAAD is also limited by the terms on which the TCA bound itself to that jurisdiction, and which are specified in Ordinance No. 112A/2011, of 22 March, since Article 4 of the LFTA establishes that 'the binding of the tax administration to the jurisdiction of the tribunals constituted pursuant to this law depends on an ordinance of the Government members responsible for the areas of finance and justice, which establishes, in particular, the type and maximum value of disputes covered'.
In view of this second limitation on the jurisdiction of the arbitral tribunals functioning in the CAAD, the resolution of the jurisdiction question depends essentially on the terms of this binding, since, even if one is faced with a situation falling within that Article 2 of the LFTA, if it is not covered by the binding provided for in the Ordinance referred to above, the possibility of this Arbitral Tribunal jurisdictionally deciding the dispute will be excluded.
In paragraph (a) of Article 2 of this Ordinance No. 112A/2011, explicitly excluded from the scope of the TCA's binding to the jurisdiction of the arbitral tribunals functioning in the CAAD are 'claims relating to the declaration of illegality of self-assessment acts, withholding tax and advance payments that have not been preceded by recourse to the administrative route pursuant to Articles 131 to 133 of the Code of Tax Procedure and Process' (emphasis ours).
The express reference to the preceding 'recourse to the administrative route pursuant to Articles 131 to 133 of the Code of Tax Procedure and Process' must be interpreted as referring to cases where such recourse is mandatory, through the gracious reclamation, which is the administrative means indicated in those Articles 131 to 133 of the CPPT, to whose terms it refers."
With regard, specifically, to self-assessment acts, pursuant to Article 131(1) of the CPPT, "In case of error in self-assessment, the challenge shall necessarily be preceded by a gracious reclamation addressed to the head of the regional peripheral body of the tax administration, within 2 years following the submission of the declaration." Article 131(3), however, adds that "Without prejudice to the provisions of the preceding numbers, when its grounds are exclusively a matter of law and the self-assessment has been made in accordance with generic guidelines issued by the tax administration, the deadline for challenge does not depend on prior reclamation, and the challenge shall be submitted within the deadline in Article 102(1)". Thus, the direct challenge of the self-assessment act can only be done without prior gracious reclamation in cases where it has been made "in accordance with generic guidelines issued by the tax administration", as results from the provision in Article 131(3) of the CPPT.
In the case at hand, we are not faced with such a situation, and no guidelines that the Tax and Customs Authority had issued with respect to how the self-assessments were made have even been alleged, whereby it must be concluded that the challenge of the self-assessment acts was dependent on prior gracious reclamation.
In fact, the ratio of Article 131(1) of the CPPT (prior necessary gracious reclamation as a condition of procedural viability of judicial challenge) is justified by the fact that the tax administration had not previously had the opportunity to take a position on the self-assessment, made by the taxpayer on its own initiative.
But, for this purpose, will the request for official review provided for in Articles 1 and 2 of Article 78 of the General Tax Law have the same efficacy as the gracious reclamation?
We believe so.
Indeed, it is clear that the request for review of the tax act is equivalent to the gracious reclamation on self-assessment acts, withholding tax and advance payments, since it serves the purpose of administrative filtering already referred to.
This interpretation has been consistently and peacefully upheld by arbitral case law, as evidenced by decisions issued, among others, in arbitral cases nos. 199/2016-T, of 09-12-2016; 843/2015-T, of 07-05-2015; 670/2015-T, of 11-07-2016; 427/2015-T, of 26-01-2016; 203/2015-T, of 17-11-2015; 249/2014-T, of 09-12-2014; 299/2013-T, of 10-10-2014; 210/2013-T, of 11-07-2016; 117/2013-T, of 17-05-2013; 73/2012-T, of 23-10-2012; 48/2012-T, of 06-07-2012.
Accordingly, the alleged exception of incompetence of the Arbitral Tribunal fails.
2.2 The Parties have legal personality and capacity, are legitimate, and are regularly represented (Articles 4 and 10(2) of the LFTA and Article 1 of Ordinance No. 112-A/2011, of 22 March).
2.3 The proceedings do not suffer from any nullities.
2.4 There are no other circumstances that prevent knowledge of the merits of the case.
- Position of the Parties
3.1 Of the Claimant
It sustains its request for arbitral pronouncement, in summary, as follows:
The Claimant incorporated, through a merger effective 1 January 2013, the company "C…, SGPS, SA", NIPC: …, an operation whereby the latter was extinguished and transferred all its rights and obligations to the Claimant, which previously operated under the name "D…, SGPS, SA".
Pursuant to Article 112 of the Commercial Companies Code, with the registration and merger in the commercial registry, the incorporated company was extinguished, transferring its rights and obligations to the incorporating company.
Thus, the Claimant (incorporating company) is legitimated to submit the request for arbitral pronouncement, insofar as it falls within the defense of the rights originated in the sphere of the incorporated company "C…, SGPS, SA".
This was the dominant company of a group of companies taxed under the Special Regime for Taxation of Groups of Companies (RETGS), provided for in Article 69 of the Corporate Income Tax Code (CIRC).
Thus, in the 2011 tax period, the perimeter of the "Group E…" was composed of the companies "F…, SA", "G…, SA", "H…, SA", "I…, SA", "J…, "K…, Ltd. and also "C…, SA", as the dominant company.
On 29 May 2012, the latter company submitted, electronically, the IRC income declaration form 22 (declaration no.…) for the 2011 fiscal year, pursuant to Article 120(6)(a) of the CIRC, relating to the taxable profit of the group determined pursuant to Article 70(1) of the same code, through the algebraic sum of the taxable profits and tax losses determined in the periodic individual declarations of each of the companies belonging to the group, having proceeded with the self-assessment in accordance with Article 89(a) and Article 90(6) of the CIRC.
In box 10, field 356 of the declaration, the amount of €118,763.40 was entered, relating to special advance payments, provided for in Article 106 of the CIRC, and determined pursuant to Article 106(12) of the same article, for the companies of the Group, and in field 365 of the same box the amount of €449,173.85 was entered, relating to autonomous taxation provided for in Article 88 of the same code, with the tax (IRC) calculated as recoverable in the amount of €83,967.52.
However, in view of the provisions of Article 90 of the CIRC and the tax rules governing each of the deductions provided for in Article 90(2) of the same article, the Claimant considers that the amount relating to "tax credits" arising from special advance payments made and subject to deduction in the 2011 period, in the amount of €118,763.40, should be deducted from the IRC collection formed by autonomous taxation relating to the same period.
This understanding is based on the fact that it considers that autonomous taxation is part of the concept of IRC collection, determined pursuant to Article 90, and should enjoy equal treatment, namely with respect to the deductions provided for in Article 90(2).
That Article 88(21) of the CIRC, as amended by Article 133 of Law No. 7-A/2016, of 30-03, with interpretive nature, preventing any deductions from being made to the assessment of autonomous taxation, consists of a new provision whose application shall be limited to new cases, whereby any authentic interpretation in the part relating to the non-deductibility of special advance payments in autonomous taxation violates, manifestly, the constitutional principle of non-retroactivity embodied in Article 103(3) of the CPR.
It concludes, urging acceptance of the request for arbitral pronouncement and thereby the annulment of the rejection decision of the Head of the Tax Management and Assistance Division (DGAT) of the Large Taxpayers Unit (UGC), by delegation, of 18 May 2016, issued in case no. …2016… concerning the official review procedure provided for in Article 78 of the General Tax Law (LGT) and the consequent annulment of the assessment of corporate income tax (IRC) no. 2012…, of 13 June 2012, for the year 2011, resulting from the self-assessment made in form 22 declaration (declaration no.…), with the consequent restitution of the amount of €118,763.40.
3.2 Of the Respondent
Defending itself by objection, it invokes the following arguments:
That autonomous taxation, despite being a collection in IRC, is distinguished by the fact that it does not apply to profits but to expenses incurred by the taxable person or by third parties with whom he has relations.
In view of its teleology, autonomous taxation, as an anti-abuse fiscal instrument, would be emptied of any practical fiscal content if the thesis defended by the Claimant were accepted.
That the law and its interpretation do not accord with mere appearances or value judgments constructed around the conveniences of the theses of those who defend them, without keeping in mind the hermeneutics of the teleology of the normative provision in question.
The admissibility of such an interpretation would allow an inadmissible limitation of the legislator's margin of appreciation, which in creating autonomous taxation did so with a purpose that belongs to the realm of obviousness, such as: the fight against tax evasion; the intention to tax third-party income whose income increase would be withdrawn from taxation; and the penalization, through the fiscal route, of the payment of income considered excessive in light of the economic crisis conjuncture of which traces still exist today.
Therefore, allowing interpretive rambles that would result in the admissibility of deductions of special advance payments from the collection of autonomous taxation – similar to what the law permits for IRC collection – as the Claimant claims, inexorably amputates autonomous taxation in what were the principles and purposes in which its creation by the legislator was based.
Whereby, since the tax acts challenged by the Claimant merit no censure, they should remain valid in the legal order.
- Grounds
4.1 Established Facts
With relevance to the review and decision of the substantive issue raised, the following facts are deemed established and proved:
4.1.1 The Claimant incorporated, through a merger effective 1 January 2013, the company "C…, SGPS, SA", NIPC:…, an operation whereby the latter was extinguished and transferred all its rights and obligations to the Claimant, which previously operated under the name "D…, SGPS, SA", see doc. no. 3.
4.1.2 "C…, SGPS, SA". was the dominant company of a group of companies taxed under the Special Regime for Taxation of Groups of Companies (RETGS), provided for in Article 69 of the Corporate Income Tax Code (CIRC).
4.1.3 In the 2011 tax period, the perimeter of the "Group E…" was composed of the following companies:
Dominant company:
"C…, SGPS, SA", with NIPC …
Dominated companies:
"F…, SA", with NIPC…;
"G…, SA", with NIPC…;
"H…, SA", with NIPC…;
"I…, SA", with NIPC…;
"J…, with NIPC…;
"K…, Ltd., with NIPC… .
4.1.4 On 29 May 2012, "C…, SGPS, SA", as the dominant company, submitted, electronically, the IRC income declaration form 22 (declaration no.…) for the 2011 fiscal year, pursuant to Article 120(6)(a) of the CIRC, relating to the taxable profit of the group determined pursuant to Article 70(1) of the same code, through the algebraic sum of the taxable profits and tax losses determined in the periodic individual declarations of each of the companies belonging to the group, see doc. no. 4.
4.1.5 The assessment was made by the declaring company in the said declaration (self-assessment), in accordance with Article 89(a) and Article 90(6) of the CIRC.
4.1.6 In the same declaration (Box 10, Field 356) the amount of €118,763.40 was entered, relating to special advance payments provided for in Article 106 of the CIRC, and determined pursuant to Article 106(12) of the same article, for the companies of the Group, see docs. nos. 5 and 6:
Tax Periods | Company | Special Advance Payment Paid | Last Year of Use | Document
2007 | K… | 4,841.54 | 2011 | Document 3
2008 | K… | 5,123.52 | 2012 | Document 3
2009 | K… | 8,912.54 | 2013 | Document 3
2010 | K… | 9,785.68 | 2014 | Document 3
2011 | C… | 90,100.12 | 2015 | Document 4
Total | ——————— | 118,763.40 | ——————— | ———————
4.1.7 In the same box 10, field 365, the amount of €449,173.85 was entered, relating to autonomous taxation provided for in Article 88 of the same code.
4.1.8 With tax (IRC) calculated as recoverable in the amount of €83,967.52.
4.1.9 On 24 March 2016, the Claimant requested the official review of the above tax act, pursuant to Article 54(1)(c) and Articles 78(1) and (2) of the General Tax Law (LGT) as written at the time, with the legal consequences thereof, namely the restitution of the amount of €118,763.40, see administrative file attached to the record.
4.1.10 By decision of the Head of the Tax Management and Assistance Division (DGAT) of the Large Taxpayers Unit (UGC), by delegation, of 28 April 2016, issued in case no. …2016… concerning the official review procedure provided for in Article 78 of the LGT, rejection of the official review request was proposed, as to the substantive question, and the Claimant was notified to, within a period of 15 days, if it wished, pronounce itself, pursuant to Article 60 of the LGT, see doc. no. 4 of PA.
4.1.11 The right that the Claimant chose not to exercise, whereby, by decision of 18 May 2016 of the same entity, a decision rejecting the official review request was issued.
4.1.12 Which was notified to the Claimant through letter no.…, of the 19th of the same month of May and registered on the same day (registration no. RM …PT), whereby, pursuant to Article 39(1) of the CPPT and Article 279(e) of the Civil Code, it is presumed to have been made on 23 May 2016, see doc. no. 2 of the p.i. and no. 4 of PA.
4.2 Unproven Facts
There are no facts relevant to the decision of the case that should be considered unproven.
4.3 Reasoning
With regard to factual matters, the Tribunal has no duty to rule on all the matters alleged, but rather has the duty to select what is relevant to the decision, taking into account the cause (or causes) of action that supports the claim filed by the claimant [see Articles 596(1) and 607(2) to (4) of the CPC, applicable ex vi Article 29(1)(a) and (e) of the LFTA] and state whether it considers it proven or unproven (see Article 123(2) of the CPPT).
According to the principle of free assessment of evidence, the Tribunal bases its decision, with respect to the evidence produced, on its intimate conviction, formed from the examination and evaluation it makes of the means of evidence brought to the proceedings and in accordance with its life experience (see Article 607(5) of the CPC). Only when the probative force of certain means is pre-established in law (e.g. full probative force of authentic documents, see Article 371 of the Civil Code) does the principle of free assessment not govern the assessment of evidence produced.
Thus, the Tribunal's conviction was based on the documentary evidence joined to the record and on the positions taken by the Parties.
The witness called by the Claimant – Dr. B… – demonstrated knowledge regarding the matter in discussion in the present proceedings, namely as to the data contained in the form 22 income declaration relating to the 2011 fiscal year, revealing his testimony to be informed, assertive, consistent and spontaneous, resulting from fluid discourse and without difficulty in recalling, expressing and contextualizing the facts stated. However, the testimony brought no circumstance to the record to be valued in the instruction of the same since the matter in controversy is essentially one of law.
- Law (Grounds)
The disputed question, which constitutes the thema decidendum, is whether the amount paid as special advance payment can be deducted from the collection produced by autonomous taxation.
The following questions are to be reviewed:
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The (il)legality of the assessment challenged;
-
The addition of paragraph 21 to Article 88 of the CIRC, made by Law No. 7-A/2016, of 30 March; and
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The request for payment of indemnity interest.
5.1 The (il)legality of the assessment challenged –
Because the question to be decided is in all respects identical to the one that was the subject of the learned arbitral award issued in Case no. 122/2016-T, of 04-11-2016, in which excerpts from arbitral decisions on the matter are transcribed (Cases nos. 781/2015-T, of 04-05-2016 and 113/2015-T, of 30-12-2015) and referred to case law of the constitutional, administrative and arbitral court as well as some doctrine on the same subject matter, which we subscribe to in its entirety, we proceed to the partial transcription of the referred award:
"Autonomous taxation as it derives from its very designation consists of a form of taxation which, although provided for in income tax codes, namely in IRC, is materially distinct from them. Firstly, it has a different tax event, since it does not, strictly speaking, or at least at first glance, refer to the receipt of income, but to certain expenses. This understanding is confirmed by the case law of the constitutional court, administrative court and arbitral court, as well as by doctrine. Moreover, contrary to IRC in its general regime, autonomous taxation does not have a periodic nature and is not of successive formation, but is more similar to single-payment taxes, given the circumstance that its tax event, that is, the expenses on which it applies, arise in isolation in time.
It is, however, found that, as it derives from the arbitral decision of 4/5/2016, issued in the CAAD case no. 781/2015-T, 'It is now well established, following numerous arbitral case law decisions and positions taken by the Tax and Customs Authority, that the tax collected on the basis of autonomous taxation provided for in the CIRC has the nature of IRC'.
Even in a context in which the question of whether autonomous taxation applies to income or not is surpassed, and accepting that there would be a logical nexus between the receipt thereof and the occurrence of certain expenses (on which autonomous taxation would apply), even so, it would be admissible, it is recognized, that the regime of autonomous taxation would be distinct from the general regime applicable within IRC. That is, that the formal inclusion of autonomous taxation within IRC would not imply that this form of taxation would be subject to the general regime for taxation of income obtained over the fiscal year.
Especially in a context in which the system is characterized, precisely, by a certain dualism.
As it derives from the very epithet autonomous attached to the word taxation, the rules underlying the taxation of those revenues are distinct, which is why the taxation is autonomous. It follows from the rules applicable to autonomous taxation that the expenses on which it applies not only are not reflected in taxable profit, insofar as they are excluded from it, thus having no reflection in the IRC collection under the general taxation regime for profit, but also, furthermore, are subject to a different rate. It is, therefore, legitimate that its specificities be taken into account.
We consider the following statements, contained in the decision of the CAAD issued in the aforementioned case no. 781/2015-T, to be correct, in all respects identical to what is now decided:
'However, the circumstance that a self-assessment of IRC, made pursuant to Article 90(1), may contain several partial calculations based on various rates applicable to certain taxable matters does not imply that there is more than one assessment, as results from the very terms of that norm by making reference to 'assessment', in the singular, in all cases in which it is 'made by the taxable person in the declarations referred to in Articles 120 and 122', having 'as its basis the taxable matter contained therein' (whether determined on the basis of the rules of Articles 17 et seq., or determined on the basis of the various situations provided for in Article 88)';
'The amount determined in the declaration referred to in Article 120 includes the sums relating to autonomous taxation, with no other specific declaration for this purpose, neither before nor after Law No. 7-A/2016';
'In truth, the declarations provided for in Article 120 of the CIRC are drawn up in a single official form approved by dispatch of the Minister of Finance, pursuant to Articles 117(1)(b) and (2) of the CIRC'.
However, the fact that autonomous taxation is assessed at the same time as the assessment is made under the general regime and that, ultimately, upon determining the amount of tax to be paid under IRC, the assessment relating to autonomous taxation and that relating to the general regime of IRC converge, may be understood as a mere technical expression and of convenience. Not thus undermining the existence of two distinct moments of assessment. Moreover, assessment, as a procedure, involves more than determining the amount of tax to be paid, comprising an entire succession of acts which, in the case of autonomous taxation, is totally distinct from that which occurs under the general rules. In that measure, the strictly literal argument that Article 90 of the CIRC makes a generic reference to assessment and that, for that reason, a deduction of expenses is imposed, pursuant to Article 90(2) of the CIRC, may leave room for the specificities of autonomous taxation and especially the dynamics and systematics of the various provisions of the CIRC to be considered.
In the case of PEC deduction, as is claimed in the specific case, a truly inconvenient situation would arise which would translate into the fact that there would be two anti-abuse norms that would annul each other mutually.
As is known, the PEC was introduced into the legal order to provide the Tax Administration with an additional mechanism to combat tax evasion. It is not, therefore, a normal advance payment, given that it is calculated on the basis of business volume, and can even be due in the absence of profits, which evidences its anti-abuse character.
In practice, it would be permitted to deduct from one payment that is aimed at preventing abuse another that would pursue exactly the same purpose. The paradox that would already result from the realization of the deductions contained in Article 90(2) of the CIRC would be maximized in this situation.
We subscribe in its entirety, regarding what we have just ventured, the excerpt from the decision of the CAAD issued in case no. 781/2015-T, which we proceed to transcribe.
'But it is also true that, in view of the previous regime of reimbursement of special advance payments, which revealed that special advance payment had inherent therein a presumption of undeclared income, one could venture a restrictive interpretation, regarding special advance payment, in the sense that it is not deductible from the collection of autonomous taxation, as was understood in the arbitral decision of 30-12-2015, issued in the CAAD case no. 113/2015-T, which invokes reasonable grounds, derived from the purposes that it was intended legislatively to achieve with the creation of special advance payment, that could justify a restriction of the reference made in Article 93(1) of the CIRC to the 'amount determined in the declaration referred to in Article 120'.
As was seen, PEC became part of the IRC system whose assessment enshrined in Article 83 was designed to determine the tax directly applying to declared income. When there is a tax loss, the taxable person nonetheless has to bear the PEC; that was in fact the reason for its introduction. If a given company systematically has tax losses, it will systematically bear tax, as the system doubts its capacity to function in a permanently deficit situation, requiring it to satisfy provisionally (on account) a determined value. It may be reimbursed if it proves that this situation is common in its sector of activity or if the TCA verifies the regularity of its declarations. This was the balance that the CIRC required to maintain a system based on declarations made by taxpayers.
The tax resulting from autonomous taxation, on the other hand, is based solely on the pursuit of tax evasion by income transfer and has a dissuasive and compensatory effect.
If the deduction of PEC from the collection resulting from autonomous taxation is permitted, the purposes of the system in which Article 83(2-e) of the CIRC operates will be frustrated, since the product of special advance payment that should remain 'stationary' in the ownership of the Public Treasury will be affected by the extinction of the debt of the taxable person resulting from autonomous taxation, thus alleviating the intended pressure to prevent 'declarative' tax evasion. There is indeed an irreconcilable conflict between the ratio of PEC – the combat against evasion or the pressure for correction of declarations – and the allocation of its credits to the satisfaction of other obligations other than those resulting from the determination of IRC calculated on the basis of taxable profit.
In the same sense, that is, for the non-deductibility of the amount paid as special advance payment from the collection produced by autonomous taxation, can also be seen the arbitral decisions of the CAAD issued in the following cases: 34/2016-T, of 26-09-2016; 19/2016-T, of 25-10-2016; 784-T/2015, of 13-05-2016; 783-T/2015, of 01-07-2016; 780-T/2015, of 20-06-2016; 670/2015-T, of 11-07-2016; 535/2015-T, of 27-04-2016; 736/2015-T, of 14-06-2016; 750/2015-T, of 20-07-2016; and 785/2015-T, of 09-08-2016.
5.2 The addition of paragraph 21 to Article 88 of the CIRC, made by Law No. 7-A/2016, of 30 March
Article 133 of Law No. 7-A/2016, of 30 March, amended Article 88 of the CIRC, relating to autonomous taxation rates, by adding to it paragraph 21 with the following wording: "21 — The assessment of autonomous taxation in IRC is made pursuant to the terms provided for in Article 89 and is based on the values and rates that result from the provisions of the preceding paragraphs, with no deductions being made to the total amount determined".
On the other hand, Article 135 of the same law attributes this provision interpretive nature.
The question that arises is whether the said provision is innovative or interpretive, as that article states.
If in the affirmative, it would be applicable only to facts occurring from the date of entry into force, that is, 01 April 2016, by force of the provisions of Article 218 of the said law, combined with Article 12(1) of the General Tax Law 'tax norms apply to facts subsequent to their entry into force (tempus regit actus), and no retroactive taxes can be created'.
And it is certain that, if applied to prior facts, the said provision would be unconstitutional since authentic or proper retroactivity (and not improper, inauthentic or retrospectivity) is prohibited by force of Article 103(3) of the Constitution of the Portuguese Republic.
But having interpretive nature, it is integrated into the law interpreted, see Article 13(1) of the Civil Code, and the effects already produced by the performance of the obligation, by a judgment that has become final, by a transaction, even if not approved, or by acts of analogous nature, are saved.
However, as João Baptista Machado refers, "for a new law to be truly interpretive two requirements are therefore necessary: that the solution of the prior law be controversial or at least uncertain; and that the solution defined by the new law be within the framework of the controversy and be such that the judge or interpreter could reach it without exceeding the limits normally imposed on interpretation and application of the law. If the judge or interpreter, in the face of old texts, could not feel authorized to adopt the solution that the new law comes to consecrate, then this is decidedly innovative".
Therefore, for the Arbitral Tribunal, the said paragraph 21 of Article 88 of the CIRC does not constitute an innovative provision, whereby it may be applied to prior situations without there being true retroactivity, because the application of the original provision, or rather, its non-existence, in this case, made in light of the legal framework in force would lead to the same solution as that consecrated by the legislator of the later provision.
Again invoking the arbitral award of 04 November 2016, issued in Case no. 122/2016-T, because we subscribe in its entirety what was decided therein on the application of paragraph 21 of Article 88 of the CIRC as well as its interpretive nature, we proceed to transcribe the following excerpt:
"(…) Article 135 of Law No. 7-A/2016, of 30 March, by attributing 'interpretive' nature to that new paragraph 21 of Article 88, combined with Article 13 of the Civil Code (which is the only norm that defines the concept of interpretive law), has embedded therein a legislative intention to apply the new regime to prior situations in which there have been no 'effects already produced by the performance of the obligation, by a judgment that has become final, by transaction, even if not approved, or by acts of analogous nature'.
BAPTISTA MACHADO teaches on interpretive laws:
Now the reason why interpretive law applies to prior facts and situations lies fundamentally in that it, by coming to consecrate and fix one of the possible interpretations of the old law with which interested parties could and should reckon, is not susceptible to violating safe and legitimately founded expectations. We can consequently say that those laws are of interpretive nature which, on points or questions where the applicable legal rules are uncertain or their sense controversial, come to consecrate a solution that the courts could have adopted. It is not necessary that the law come to consecrate one of the prior jurisprudential currents or a strong prior jurisprudential current. Especially since interpretive law often arises before such jurisprudential currents have even formed. But, if this is the case, and if in the meantime a uniform jurisprudential current has formed that made practically certain the meaning of the old norm, then the new law that comes to consecrate a different interpretation of the same norm can no longer be considered truly interpretive (although it may be interpretive perhaps by determination of the legislator), but innovative.
In order for a new law to be truly interpretive, two requirements are therefore necessary: that the solution of the prior law be controversial or at least uncertain; and that the solution defined by the new law be within the framework of the controversy and be such that the judge or interpreter could reach it without exceeding the limits normally imposed on interpretation and application of the law. If the judge or interpreter, in the face of old texts, could not feel authorized to adopt the solution that the new law comes to consecrate, then this is decidedly innovative.
In view of this position, whose grounding is weighty, in face of the legislation in force in 2012 and 2013, the assignment of interpretive nature to paragraph 21 of Article 88 of the CIRC made in Article 135 of Law No. 7-A/2016, of 30 March, can be accepted, in light of the teachings of BAPTISTA MACHADO, for the solution foreseen therein of the impossibility of deducting special advance payment from the total amount of autonomous taxation passes the test enunciated by this Author:
– the solution resulting from the literal tenor of Article 93(1) of the CIRC was controversial, as evidenced by that arbitral decision and the solution defined by the new law situates itself within the framework of the controversy;
– the judge or interpreter could reach that solution without exceeding the limits normally imposed on interpretation and application of the law, since restrictive interpretation is admissible when there are grounds to conclude that the scope of the legal text betrays the legislative intent or it is necessary to optimize the harmonization of conflicting interests that two norms aim to protect.
Unlike what occurs with tax benefits that depend on the realization of investments, there is, regarding the deductibility of special advance payments, no concern for protection of reliance, since special advance payments are connected with business volume, not depending on any specific behavior that the taxable person would be led to adopt by being created the expectation of obtaining a tax advantage as a counterpart.
Moreover, it is not apparent that the regime resulting from Article 88(21) of the CIRC contains any contradiction: according to this new norm, the norms of the CIRC relating to the form of assessment of autonomous taxation should be interpreted as provided therein and with respect to that part of the IRC assessment no deductions are made.
Indeed, it was precisely with this meaning that the form 22 model for IRC declaration was drawn up and it was by applying the now explicit regime in paragraph 21 of Article 88 that the Claimant filled in the declarations referred to in the record, without any perceivable contradiction.
But, being so, as the Claimant argues, the obstacle to the application of the regime resulting from this paragraph 21 of Article 88 will be only its eventual unconstitutionality, namely in light of the rule prohibiting retroactive taxes contained in Article 103(3) of the CPR, which establishes that 'no one can be required to pay taxes that have not been created in accordance with the Constitution, that have retroactive nature or whose assessment and collection is not done in accordance with the law'.
The Constitutional Court has adopted a restrictive interpretation of the scope of this prohibition on retroactive tax legislation, understanding that 'the legislator of the 1997 constitutional revision, which introduced the current wording of Article 103(3), only intended to consecrate the prohibition of authentic retroactivity, or proper retroactivity, of fiscal law, covering only cases in which the tax event that the new law intends to regulate has already produced all its effects under the old law, excluding from its scope of application situations of retrospectivity or improper, or inauthentic, retroactivity, that is, those situations in which the law is applied to past facts but whose effects still endure in the present' (awards nos. 18/2011, of 12012011, following case law adopted in award no. 399/2010).
The norms providing for special advance payments were, in principle, not norms on the incidence of IRC, but rather on its assessment and payment, whereby, in that measure, they will not be covered by the constitutional prohibition on retroactivity. But, prior to the wording given by Law No. 2/2014, of 16 January, to Article 93(3), on the impossibility of deduction of special advance payments in the period to which they relate and in subsequent periods, those norms could end up creating a situation of IRC incidence, autonomous in relation to any other tax event, if reimbursement were not to be permitted in accordance with Article 93(3) of the CIRC, which depended on the fulfillment of conditions.
However, with the wording given to the referred Article 93(3) by Law No. 2/2014, those conditions for reimbursement are no longer required, whereby special advance payments only imply, by themselves, the payment of definitive tax when the taxable person does not make efforts to obtain reimbursement within the prescribed period.
And, even in this hypothesis, one would be faced with a complex tax event of successive formation, which is constituted by the business volume in the year to which the special advance payments relate combined with the impossibility of deduction in the periods provided for in law and the non-reimbursement pursuant to Article 93(3) of the CIRC".
'Thus, it must be concluded that the authentic interpretation made in Article 88(21) of the CIRC, in the part relating to the non-deductibility of special advance payments in autonomous taxation, does not violate the principle of non-retroactivity in the creation of taxes, understood as referring only to authentic retroactivity, relating to tax events that have been completed and produced all their effects in the past.
However, that rule of non-retroactivity of norms creating taxes does not exhaust constitutional concerns for legal certainty, imposed by the principle of the democratic rule of law, as CASALTA NABAIS teaches:
'The principle of legal certainty, inherent in the idea of the democratic rule of law, is far, however, from being totally absorbed by this new constitutional provision. It is true that it ceased to serve as a balance in the weighing of legal interests in the presence when we are faced with a tax affected by true or proper retroactivity. When this happens, the solution is now dictated, to all intents and purposes, in the Constitution, and its applying bodies cannot, without violating it, proceed to a case-by-case weighing.
But the principle in question undoubtedly has a much broader basis. It is that it also serves as a criterion for weighing in situations of improper, inauthentic or false retroactivity, as well as in situations in which, there being no retroactivity, proper or improper, there is a need to protect the confidence of taxpayers placed in the actions of the organs of the State'.
However, in the specific case of special advance payments, it cannot be concluded that one is not faced with a truly interpretive law, for there was no consolidated case law to the effect that their deductibility from the collection resulting from autonomous taxation and, on the contrary, the solution adopted in paragraph 21 of Article 88 could previously be adopted by the courts, as it was by the Arbitral Tribunal that issued the decision in CAAD case no. 113/2015-T.
Thus, it cannot be concluded that the authentic interpretation made in that Article 88(21), by force of Article 135 of Law No. 7-A/2016, of 30 March, is violative of the constitutional principle of legal certainty, as concerns the part of that norm that relates to the non-deductibility of special advance payments from the collection of autonomous taxation".
Regarding the matter of interpretive law and in order to reinforce the position subscribed through the adherence to the excerpt of the award that we have just transcribed, we also welcome what was written in the arbitral decision of 30/06/2016, issued in CAAD case no. 769/2015-T in this same respect:
"By Law No. 7-A/2016, of 30 March, the legislator introduced paragraph 21 to Article 88 of the CIRC, with the following wording:
'The assessment of autonomous taxation in IRC is made pursuant to the terms provided for in Article 89 and is based on the values and rates that result from the provisions of the preceding paragraphs, with no deductions being made to the total amount determined'.
In Article 135 of the said Law No. 7-A/2016, of 30 March, the legislator determined that the norm in question will have an interpretive character.
Should it be verified that, in fact, the new paragraph 21 of Article 88 of the CIRC has an interpretive character, the provisions contained therein will be integrated into the interpreted norm from the beginning of its validity, whereby this tribunal will have to conclude for the non-deduction of PEC from the amounts due as autonomous taxation, dismissing the Claimant's claim. This would likewise result from the application to the specific case of Article 13 of the Civil Code which 'Interpretive law is integrated into the law interpreted, provided, however, that the effects already produced by the performance of the obligation, by a judgment that has become final, by transaction, even if not approved, or by acts of an analogous nature, are saved'.
First and foremost, it must be stated that, although in fiscal matters the constitutional principles of legality and prohibition of retroactivity of law, provided for in Article 103 of the CPR, impose some restrictions on the legislator, this tribunal understands that there is no generic constitutional prohibition of interpretive fiscal laws.
The constitutional admissibility of interpretive laws in fiscal matters, as with any fiscal norms, should be gauged in accordance with the matters on which they are concerned and their respective normative content, since the constitutional prohibition of retroactivity of fiscal law is limited to matters of incidence (objective, subjective, temporal and territorial) of the tax.
As defended by Diogo Leite de Campos, Benjamim Silva Rodrigues and Jorge Lopes de Sousa, 'The constitutionality of retroactive tax norms has to be gauged differently depending on whether they concern the material elements that contribute to the definition of the tax norm type (incidence, exemptions and rate) or to other matters (guarantee of taxpayers, procedure for assessment and collection). The prohibition contained in Article 103(3) of the CPR concerns only the former. The conformity of the latter with the Constitution has to be considered in light of the principles of legal certainty and protection of reliance that inform the rule of law (Article 2 of the CPR)'.
Starting from the theoretical admissibility of interpretive laws in fiscal matters, it must be analyzed whether, in the case at hand, notwithstanding the express declaration of the legislator, we are effectively faced with an interpretive law.
Baptista Machado concludes that 'the reason why interpretive law applies to prior facts and situations lies fundamentally in that it, by coming to consecrate one of the possible interpretations of the old law with which interested parties could and should reckon, is not susceptible to violating safe and legitimately founded expectations'. In these cases, there is no true retroactivity in the application of interpretive law because the interpretation of the original norm made in light of the legal framework in force would lead to the same solution as that consecrated by the legislator in subsequent norm.
It is thus considered that, to qualify a law as interpretive, the following requirements should be verified:
(i) there being a controversial or uncertain question in the law in force; and
(ii) the legislator consecrating an interpretive solution that resolves the uncertainty that the interpreter or judge would reach on the basis of the normative prior to the legislative amendment.
Applying these criteria to the situation at hand, we are led to conclude that we are, really, faced with an interpretive law. In truth, the matter regulated by the new paragraph 21 of Article 88 of the CIRC was controversial and uncertain (having given rise to the arbitral cases listed by the Claimant itself), with the solution consecrated corresponding to one of the plausible interpretations that the judge would reach, as indeed he did, for example, in the arbitral decision issued in case 113/2015-T, of 30-12-2015. The solution ceases to be a plausible and grounded solution that found prior jurisprudential adherence.
Against this understanding will not proceed the Claimant's allegation that, to be faced with an effective interpretive law, a jurisprudential current would need to be necessary that imposed a given solution to the legislator. And this allegation does not proceed because, as Baptista Machado refers '(…) It is not necessary that the law come to consecrate one of the prior jurisprudential currents or a strong prior jurisprudential current. Especially since interpretive law often arises before such jurisprudential currents have even formed. (…) In order for a new law to be truly interpretive, two requirements are therefore necessary: that the solution of the prior law be controversial or at least uncertain; and that the solution defined by the new law be within the framework of the controversy and be such that the judge or interpreter could reach it without exceeding the limits normally imposed on interpretation and application of the law. If the judge or interpreter, in the face of old texts, could not feel authorized to adopt the solution that the new law comes to consecrate, then this is decidedly innovative.'
In view of all that is set forth above, it remains to conclude for the interpretive character of paragraph 21 of Article 88 of the CIRC, introduced by Law No. 7-A/2016, of 30 March, which, being directly applicable to the situation at hand, in accordance with Article 13 of the Civil Code, will imply dismissal of the Claimant's claim by determining expressly the said norm that to the amount of autonomous taxation no deductions will be made'.
We conclude, therefore, that the legislator in including paragraph 21 in Article 88 of the CIRC, limited itself to embracing and reinforcing the interpretive sense that already resulted from the norms in force.
In that measure, the retroactive application of the said provision (paragraph 21 of Article 88 of the CIRC) is dispensed with.
5.3 The request for indemnity interest -
Being this request dependent on the acceptance of the prior request, with that one failing, this one also fails, with no condemnation of the TCA in the payment of indemnity interest.
- Decision
In view of the foregoing, it is decided:
a) To dismiss the dilatory exception of material incompetence of the Arbitral Tribunal arising from the circumstance that the request for arbitral pronouncement was formulated following the rejection of a request for official review;
b) To dismiss the request for revocation of the decision of the Head of the Tax Management and Assistance Division (DGAT) of the Large Taxpayers Unit (UGC), by delegation, of 18 May 2016, issued in case no. …2016… concerning the official review procedure provided for in Article 78 of the General Tax Law, maintaining it in the legal order;
c) To dismiss the request for annulment of the assessment of IRC no. 2012…, of 13 June 2012, for the year 2011, resulting from the self-assessment made in form 22 declaration (declaration no.…);
d) To dismiss the request for recognition of the Claimant's right to reimbursement of the amount of €118,763.40 and, consequently, prejudice the right to indemnity interest; and
e) To condemn the Claimant to pay the costs of the arbitral proceedings, in the amount of €3,060.00, see Article 527(1) of the Civil Procedure Code and Article 4 of the Regulation of Costs in Tax Arbitration Proceedings (RCPAT).
- Case Value
In accordance with the provisions of Articles 306(2) of the CPC, 97-A(1)(a) of the CPPT and 3(2) of the RCPAT, the case value is set at €118,763.40.
- Costs
Pursuant to Article 22(4) of the LFTA, the amount of costs is set at €3,060.00, pursuant to Table I, annexed to the RCPAT.
Notify.
Lisbon, 03 April 2017.
The President Arbitrator,
(José Baeta de Queiroz – dissenting, as per the dissenting opinion that follows)
The Adjunct Arbitrator,
(Rui Ferreira Rodrigues)
The Adjunct Arbitrator,
(Rui Manuel Correia Pinto)
Dissenting Opinion
The case law produced by the arbitral tribunals functioning within the CAAD has understood, almost unanimously, that autonomous taxation is part of IRC, based on argumentation from which the present award does not depart.
And, if it were not as has been decided, there would be no legal norm supporting its assessment, and autonomous taxation would have to be considered unconstitutional, by violation of Article 103(3) of the Constitution.
On the other hand, what primarily interests the courts is how the legislator configured matters, and not doctrinal concepts, which it does not always take into account. And the legislator, in this case, by including autonomous taxation in Article 90 of the CIRC, undoubtedly chose to consider it IRC.
Moreover, special advance payments, for not being special, do not cease to be advance payments. That is, advances of the tax that is finally assessed, to which the payments already made, credits resulting from a loan that the taxpayer was forced to make to the State – whether they are special or not – should be deducted.
It is true that these special advance payments aim to tax companies that systematically present tax losses, and not those that evidence positive fiscal results. But such is no obstacle to what we have been asserting.
Thus, in our understanding, the collection found by means of the assessment made pursuant to Article 90(1) includes autonomous taxation, and Article 90(2), in its paragraph (c), orders deduction from the determined amount, which is only one, of the "special advance payment referred to in Article 106".
We do not see how this norm can legitimately be interpreted other than literally. All the elements attended to for the interpretation of laws, namely the intent of the legislator, or the unity of the system, count for nothing if the result reached has no sufficient expression in the letter of the law. And that letter, in this case, is clear and admits, in our view, only one meaning.
It is true that numerous case law from arbitral tribunals made of the norm a restrictive interpretation, considering special advance payments non-deductible. Such case law rests, in short, on the consideration that, given that special advance payments were introduced to tax companies that systematically present tax losses; and given that autonomous taxation assumes a dissuasive and compensatory effect, pursuing tax evasion by income transfer – the system would be defrauded if the use of special advance payments to extinguish the debt resulting from autonomous taxation were permitted.
Hence such interpreters felt authorized to make a restrictive interpretation – the legislator said more than it wanted in admitting the deduction from the collection resulting from autonomous taxation of special advance payments.
However, with all respect for the members of the tribunals that so understood, as well as for the learned argumentation they expounded, we do not follow what was thus decided, for the reasons already synthetically exposed. In our view, such interpretation attends more to the systematic element and to the intent attributed to the legislator than to the letter of the law, nothing making us believe that the legislator expressed himself incorrectly, and nothing recommending, consequently, restrictive interpretation.
It must, however, be noted that Article 133 of law no. 7-A/2016, of 30 March, introduced into Article 88 of the CIRC a new paragraph 21, of this tenor:
"The assessment of autonomous taxation in IRC is made pursuant to the terms provided for in Article 89 and is based on the values and rates that result from the provisions of the preceding paragraphs, with no deductions being made to the total amount determined".
And Article 135 of the said law affirmed the interpretive nature of the transcribed paragraph 21 of Article 88.
It happens that our doctrine and case law have long maintained that it is not enough for a norm, in order to be interpretive, the assertion of the legislator to that effect.
It is true that, in this case, there is a jurisprudential controversy that, in principle, would justify an interpretive intervention by the legislator. It is also true that the new norm, asserted as interpretive, goes in the direction of one of the pre-existing jurisprudential currents, that is, even before some judges had reached the interpretation now made by the legislator.
But see what in 1997 Professor Oliveira Ascensão wrote: "it is not enough that with respect to a doubtful point there arises a later law that consecrates one of the possible interpretations for the law to be interpretive" (apud Saldanha Sanches, "Interpretive Law and Retroactivity in Fiscal Matters", in TAXATION, no. 1, p. 87). To which the Professor Saldanha Sanches adds: "It is necessary that there be an effective controversy, known by the addressees of the norm, regarding the uncertainty of the interpretation".
This point seems relevant to us. It is that the addressees of the norm are not, prima facie, jurists, judges, but citizens in general, all obligated to pay taxes and all bound by the law, whose ignorance they cannot invoke.
Now, the interpretation reached by those arbitral tribunals is not within the reach of any citizen, not even of any jurist, but only of a highly specialized tax lawyer, capable of combining various elements, whether historical, systematic and other, interpretive ones, reasonably ignored by most people, addressees of the law, and not even attainable by the most diligent in understanding it.
That is: the ordinary citizen, the bonus pater familias, even if a businessman, investor or manager, not knowing, nor having to know, the case law of the arbitral tribunals, relied, before the so-called interpretive law, on the possibility of deduction from the collection, therein included autonomous taxation, of special advance payments. This was what he read in the law then in existence.
Which is equivalent to saying that the interpretive norm "(…) because it does not correspond to anything with which the taxpayer should or could reckon, comes to constitute by its imprevisible character a conduct injurious to legal certainty" (Saldanha Sanches, work and location cited, p. 86).
Moreover: for the Author whose teaching we have been following, "(…) it does not seem to us that interpretive law can take place in fiscal matters (…) the [IV] constitutional revision came to prevent the retroactive effects of any norm in fiscal matters. Including those provoked by interpretive law" (work and location cited, p. 88).
And, for those who think that this position may have been merely circumstantial, relating to the year 2000, when the article we have been referring to was written, it is to see the MANUAL OF FISCAL LAW of the same professor, in whose 2007 edition is read, at pp. 195, that "(…) even when we are faced with a truly interpretive law, and not one of those that the legislator designates as interpretive 'to make the retroactivity of the law less perceptible', (…) we are, in all these situations, faced with cases covered by the constitutional prohibition of retroactivity".
More is it so for those who, like us, understand that the letter of the law prior to the 2016 budget law did not admit the interpretation later adopted by the legislator, for the sense that derived from that letter was univocal: special advance payments were deductible from the collection determined pursuant to Article 90(1), include this, or not, autonomous taxation. That is, that paragraph 21 of Article 88 of the CIRC is not a true interpretive norm. As, indeed, the manner in which the legislator proceeded soon evidences: instead of giving to the supposedly ambiguous norm a new wording, now unequivocal, it created another norm, new – paragraph 21 of Article 88 of the CIRC – in collision with Article 90, which cannot but be the "norm interpreted". And, if the aforesaid paragraph 21 of Article 88 of the CIRC were a true interpretive norm, it would be contrary to Article 103(3) of the Constitution.
Add further that it does not seem rigorous to us the assertion, commonly made, according to which interpretive laws are not innovative, because they limit themselves to consecrating one of the possible meanings of the interpreted law.
In truth, in order for a law to be said interpretive it is indispensable the pre-existence of an interpreted law with various meanings – so to speak, two norms of divergent sense in one norm.
Now, being so, the interpretive law, by opting for one of the admissible meanings of the interpreted, excluding the other, somehow revokes it.
Saying it another way: there were two passages in the norm, one of them is eliminated from the legal order, surviving the other.
Therefore we say that interpretive laws do not cease to be innovative and, consequently, liable to betray the legitimate reliance of those who counted on the interpretation of the law interpreted repudiated by the interpretive.
Moreover, it is of the nature of interpretive laws to have retroactive application, for they do not limit themselves to excluding one of the interpretations of the interpreted law ex nunc, they do so ex tunc.
Here, in brief summary, are the reasons why we do not follow what was decided and why, consequently, we would judge the request to be well-founded.
(José Baeta de Queiroz)
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