Process: 527/2014-T

Date: December 23, 2014

Tax Type: Selo

Source: Original CAAD Decision

Summary

CAAD Process 527/2014-T addresses whether construction land (terrenos para construção) is subject to Stamp Tax under Verba 28.1 of the Portuguese General Stamp Tax Table (TGIS), introduced by Law 55-A/2012. The claimant challenged Stamp Duty assessments totaling €24,769.10 on two construction land plots, arguing that Verba 28.1 should only apply to properties with actual residential use, not undeveloped land. The Tax Authority defended the assessments, contending that since the properties were classified with residential use for Municipal Property Tax valuation purposes under the MPTC (pursuant to Article 67(2) of the Stamp Duty Code), this classification extends to Stamp Tax liability. The claimant also raised constitutional concerns, alleging violation of tax equality and contributive capacity principles under Article 104(3) of the Portuguese Constitution. The case exemplifies the interpretative challenges arising from Law 55-A/2012's expansion of Stamp Tax to high-value real estate, particularly regarding the distinction between actual residential use versus legal classification for valuation purposes. The arbitral tribunal procedure under CAAD allows taxpayers to contest unlawful Stamp Tax liquidations and seek reimbursement plus compensatory interest for unduly paid amounts.

Full Decision

ARBITRAL DECISION[1]

  1. Report

A – General

1.1. A…, S.A., a company with registered office at Avenida …, in Lisbon, with sole registration number and collective person number … (hereinafter designated "Claimant"), filed on 25.07.2014 a request for constitution of an arbitral tribunal in tax matters, seeking: (i) the annulment of stamp duty assessment acts relating to the year 2013, in the total amount of € 24,769.10 (twenty-four thousand seven hundred and sixty-nine euros and ten cents), relating to two plots of land for construction which it owns, registered one in the property register of the parish of …, municipality of …, district of Porto under article … and the other in the property register of the parish of …, municipality and district of Porto under article ..., (ii) the reimbursement of all amounts of stamp duty that the Claimant has paid or may pay based on the assessments in question, and further, (iii) the condemnation of the Tax and Customs Authority to pay compensatory interest for unduly paid tax obligations.

1.2. The aforementioned assessments, copies of which were attached to the arbitral determination request, were based on article 1 of the Stamp Duty Code (hereinafter the "SDC"), on item 28.1 of the respective General Schedule (the "GSSD"), added by article 4 of Law no. 55-A/2012 of 29 October, and were duly notified to the Claimant.

1.3. In accordance with the provisions of paragraph (a) of paragraph 2 of article 6 and paragraph (b) of paragraph 1 of article 11 of Decree-Law no. 10/2011 of 20 January, as amended by article 228 of Law no. 66-B/2012 of 31 December, the Deontological Council of the Centre for Administrative Arbitration appointed Nuno Pombo as arbitrator, and the parties, after being duly notified, did not manifest any opposition to such appointment.

1.4. By order of 31.07.2014, the Tax and Customs Authority (hereinafter designated "Respondent") proceeded to appoint Dr. Fátima Soares to intervene in the present arbitral proceedings, in the name and representation of the Respondent.

1.5. In accordance with the provision of paragraph (c) of paragraph 1 of article 11 of Decree-Law no. 10/2011 of 20 January, as amended by article 228 of Law no. 66-B/2012 of 31 December, the arbitral tribunal was constituted on 26.09.2014.

1.6. On 29.09.2014, the highest-ranking official of the Respondent's service was notified to, within thirty days, attach to the case file the administrative file that may exist and, if it so wishes, submit a reply and request the production of additional evidence.

1.7. On 30.10.2014 the Respondent submitted its reply.

B – Position of the Claimant

1.8. The Claimant bases its claim on the erroneous characterization of the tax fact, arguing essentially that "land for construction cannot be subsumed under the concept of 'properties with residential use' and therefore are not included within the scope of objective application" of item 28.1 of the GSSD, since this item "should encompass only properties that are effectively devoted to residential purposes, i.e., properties that already have residential use", which is not the case with properties classified as land for construction, since these do not have an actual and real residential use.

1.9. The Claimant further considers that item 28.1 of the GSSD suffers from unconstitutionality, as it violates the principles of tax equality and contributive capacity enshrined in article 104, paragraph 3 of the Constitution of the Portuguese Republic.

C – Position of the Respondent

1.10. The Respondent, for its part, maintains the position that the identified plots of land for construction have "the legal nature of a property with residential use", consequently defending the maintenance of the assessment acts which are the subject of the arbitral determination request.

1.11. The Respondent's position results from the fact that in stamp duty there is no definition of the concepts of "urban property", "land for construction" and "residential use", which requires recourse to the Municipal Property Tax Code (the "MPTC"), in compliance with the provision of paragraph 2 of article 67 of the SDC, as amended by Law no. 55-A/2012 of 29 October, making it necessary to conclude that the notion of designation of an urban property "is found in the section relating to the valuation of properties" and if "for purposes of determining the taxable property value of land for construction it is clear that the affectation coefficient is applied in the valuation context", then "its consideration for purposes of applying item 28 of the GSSD cannot be disregarded".

D – Conclusion of Report

1.12. Given that the Respondent proposed that the meeting provided for in article 18 of the Legal Regime for Tax Arbitration (LRTA) be dispensed with, and in the absence of opposition from the Claimant, the arbitral tribunal, by order of 17.11.2014, found no procedural utility in holding said meeting, since the parties had already placed on the case file the factual elements necessary and sufficient for the issuance of the decision, which was expected to take place by 31.12.2014.

1.13. The parties have legal personality and capacity and have standing in accordance with article 4 and paragraph 2 of article 10 of the Legal Regime for Tax Arbitration (LRTA), and article 1 of Order no. 112-A/2011 of 22 March.

1.14. The cumulation of claims made in the present request for arbitral determination is justified, in deference to the principle of procedural economy, since the contested assessment acts are based on the same factual basis and call for the application of the same rules of law, and it is likewise acceptable in principle to accept the compensation claim formulated, since article 3 of the LRTA, by expressly admitting the possibility of "cumulation of claims even relating to different acts", accommodates, without hermeneutic excess, the consideration of a claim that arises, of necessity, from the judgment that the arbitral tribunal gives regarding the validity of the assessments called into question.

1.15. The proceedings do not suffer from any nullity, nor were any exceptions raised by the parties that prevent the consideration of the merits of the case, so the conditions are met for the issuance of the arbitral award.

  1. Statement of Facts

2.1. Proven Facts

2.1.1. The Claimant is the sole owner of the following two urban properties: one registered in the property register of the parish of …, municipality of …, district of Porto under article … and another registered in the property register of the parish of …, municipality and district of Porto under article … (the "Properties") (docs. nos. 7 and 8 attached with the request for arbitral determination, whose contents are hereby reproduced).

2.1.2. The Properties are described as land for construction (docs. nos. 7 and 8 attached with the request for arbitral determination).

2.1.3. The Properties were assigned the following taxable property values: € 1,362,270.00 and € 1,114,640.00 (docs. nos. 7 and 8 attached with the request for arbitral determination).

2.1.4. For purposes of determining the respective taxable property value, residential use was assigned to the Properties (docs. nos. 7 and 8 attached with the request for arbitral determination).

2.1.5. The Claimant was notified of the tax assessment acts for stamp duty no. 2014 …, no. 2014 … and no. 2014 …, in the total amount of € 13,622.70, relating to the property registered in the property register of the parish of ... under article ... (docs. nos. 1 to 3 attached with the request for arbitral determination, whose contents are hereby reproduced).

2.1.6. The Claimant was further notified of the tax assessment acts for stamp duty no. 2014 …, no. 2014 … and no. 2014 …, in the total amount of € 11,146.40, relating to the property registered in the property register of the parish of ... under article ... (docs. nos. 4 to 6 attached with the request for arbitral determination, whose contents are hereby reproduced).

2.1.7. The Claimant proceeded to make voluntary payment of the amounts relating to the first and second installments of stamp duty relating to both Properties (docs. nos. 9 and 10 attached with the request for arbitral determination and docs. attached with the Claimant's application of 08.09.2014, whose contents are hereby reproduced).

2.2. Facts Not Proven

There are no relevant facts for the consideration of the merits of the case that have been treated as not proven.

  1. Legal Issues

3.1.1. Question to be Decided

It follows from what has been stated above that the question to be decided is, fundamentally, whether the Properties, which are land for construction, are properties "with residential use" for purposes of the application of article 1 of the SDC and item 28.1 of the GSSD, added by article 4 of Law no. 55-A/2012 of 29 October.

3.1.2. Item 28.1 of the GSSD

Law no. 55-A/2012 of 29 October, among several amendments it made to the SDC, added, by its article 4, item 28 to the GSSD, which has the following wording:

"28 - Ownership, usufruct or surface right of urban properties whose taxable property value contained in the property register, in accordance with the Municipal Property Tax Code (MPTC), is equal to or exceeding € 1,000,000 - on the taxable property value used for purposes of municipal property tax:

28.1 - For a property with residential use - 1%;

28.2 - For a property, when taxpayers that are not natural persons are resident in a country, territory or region subject to a clearly more favorable tax regime, included in the list approved by order of the Minister of Finance - 7.5%."

As can be seen, item 28.1 refers to "properties with residential use". Now, not only does this concept not appear defined in any provision of the SDC, but nor is it used in the MPTC, the law to which paragraph 2 of article 67 of the SDC expressly refers when matters not regulated in the SDC concerning item 28 are at issue.

3.1.3. The Meaning and Scope of the Concept of "Property with Residential Use"

The meaning and scope of the concept of "property with residential use" cannot be established without bearing in mind the significance of the word "affectation" itself. And that must be found in dictionaries, drawing therein the benefit of the careful study of lexicographers. Thus, "affectation", according to the Dictionary of Contemporary Portuguese Language, of the Academy of Sciences of Lisbon, is the action of designating something for a particular use, and "to affect" is consequently a synonym for designating for a specific use or function.

a) The rules of interpretation of tax provisions

The question to be decided does not preclude, but rather implies, that the meaning and scope of the concept of "property with residential use" to which item 28.1 of the GSSD appeals be ascertained. In the absence of a legal definition, either in the SDC or in any other statute, the interpreter-applicator of this provision has the duty to invoke the rules governing the necessary hermeneutic exercise.

There is no truly special regime for the interpretation of tax rules. Paragraph 1 of article 11 of the General Tax Law requires that be observed, "in determining the meaning of tax rules and in characterizing the facts to which they apply", "the general rules and principles of interpretation and application of laws".

The general principles of interpretation and application of laws are those established in article 9 of the Civil Code:

ARTICLE 9
(Interpretation of law)

  1. Interpretation should not be limited to the letter of the law, but should reconstitute from the texts the legislative intent, taking especially into account the unity of the legal system, the circumstances in which the law was enacted and the specific conditions of the time in which it is applied.

  2. However, the interpreter cannot consider the legislative intent that does not have in the letter of the law a minimum of verbal correspondence, even if imperfectly expressed.

  3. In establishing the meaning and scope of the law, the interpreter shall presume that the legislator established the most correct solutions and knew how to express his intent in adequate terms.

Note, however, that the interpretation of rules, including tax rules, does not end in a lexical exercise. It does not involve only, and indeed not mainly, vocabulary dissection. The question is not therefore to know exactly what "property with residential use" means, but rather to ascertain the meaning and scope of this concept within the framework of item 28.1 of the GSSD. The point to emphasize is that there will be procedural utility to the hermeneutic effort, within the scope of this specific request for arbitral determination, only if it is directed at ascertaining whether the legislator, with the wording chosen for item 28.1 of the GSSD, intended to include therein urban properties qualified as land for construction.

b) "Residential use" – residential properties and properties with residential use

The Respondent asserts that the "designation of the property (aptitude or purpose) is a coefficient that contributes to the valuation of the property", which we believe is indisputable, but the question now is whether item 28 of the GSSD comprises both constructed buildings and land for construction.

Paragraph 1 of article 6 of the SDC, with taxonomic concern, distinguishes "residential properties" from "land for construction". The former shall be, in accordance with the provision in paragraph 2 of the same article, buildings or constructions licensed for that purpose, or failing such license, those whose normal destination is that purpose. Land for construction, on the other hand, as clarified in paragraph 3 of the provision to which we have been referring, are those for which a license or authorization has been granted, or prior communication admitted, or favorable prior information issued for subdivision or construction operations, and also those that have been so declared in the acquisition deed, with certain exceptions.

It is therefore clear that land for construction is not, according to this classification, a residential property. The question now is whether "property with residential use", the concept used by item 28.1 of the GSSD, corresponds, despite the literal diversity, to "residential property", the notion employed in the classification just reviewed.

Affectation, as we have learned from lexicographers, involves the destination given to a certain asset. Whereas "residential" is related to habitation, this being, in turn, and according to the same Dictionary we have been using, a place or house in which one lives or dwells. Now, residential use cannot suggest any meaning other than the action of giving a certain asset – in this case the Properties, which, we recall, are land for construction – the destination of a house or place where one dwells.

It is known that the MPTC makes use of the expression "affectation" in various provisions. It does so, for example:

· In article 3, when referring to rural properties in relation to use generating agricultural income;
· In article 9, when it imposes on taxpayers the duty to communicate to the finance services that land for construction has come to form part of the inventory of a company whose object is the construction of buildings for sale or that a property has come to form part of the inventory of a company whose object is its sale;
· In article 27, when it relates certain buildings and constructions to the generation of agricultural income.

In all the situations presented, as can be seen, affectation is not referred to in potential terms, of vocation or of expectancy. It is quite the opposite. It suggests an actual or direct destination, to use an expression to which the legislator appeals in article 27.

Nevertheless, the MPTC also makes abundant use of the expression "affectation" when it lays down the rules that must apply to the determination of the taxable property value of urban properties (articles 38 et seq. of the MPTC). It is therefore important to see whether we can extract from the rules for determining taxable property value any useful element that allows us to ascertain the meaning and scope of the concept of "property with residential use".

c) The relevance of the rules for determining taxable property value

The Respondent argues that the "notion of designation of an urban property is found in the section relating to the valuation of properties" and, furthermore, that "for purposes of determining the taxable property value of land for construction it is clear that the affectation coefficient is applied in the valuation context, so its consideration for purposes of applying item 28 of the GSSD cannot be disregarded".

It is true that in determining the taxable property value of land for construction, consideration has been given, not without aporias, to the "affectation" of what may be built thereon.

Nevertheless, as the Respondent rightly points out, "the mere constitution of a right of potential construction immediately increases the value of the property in question", depending, precisely, on what may be built thereon. Therefore, as the Respondent very well explains, article 45 of the MPTC "requires separation of the two parts of the land": on one side, we must consider "the part of the land where the building to be constructed [more accurately, where it may come to be built] will be located, and on the other the area of free land. Once the amount of the first part is determined, the value determined is reduced to a percentage between 15% and 45% (…), because the construction has not yet been effectuated". It is clear to see that the application of that percentage allows precisely to take into account the circumstance that there is not yet construction, but it does not authorize the legislator to ignore that the economic or market value of land for construction is related to its construction capacity.

To say what precedes does not mean, however, that the legislator feels the need to impose automatic and necessary taxation, under the municipal property tax regime, on all land for construction. One need only read what is provided in paragraph (d) of the aforementioned article 9 of the MPTC:

ARTICLE 9
(Commencement of taxation)

  1. Tax is due from:

(…)

d) The fourth year following, inclusive, that in which land for construction has come to form part of the inventory of a company whose object is the construction of buildings for sale;

(…)

That is to say, even though the legislator finds it reasonable, as it appears to be, to determine the taxable property value of land for construction taking into account its construction capacity and, let us concede for the sake of argument, the nature or vocation of what may be built thereon, it is nonetheless symptomatic that it has opted, at the same time, to suspend this taxation in cases where such land for construction forms part of the inventory of a company whose object is the construction of buildings for sale. In cases where, one could also say, such urban properties form part of a productive process that tends to continue and to produce, downstream, fruits which are also taxable.

If the primary meaning of "affectation", as we have stated, suggests an actual, direct destination given to a particular asset, we do not see how this understanding can be refuted by the observation that the legislator, in the context of the valuation of land for construction, authorizes (if it indeed authorizes) the use of the affectation coefficient, with a view to what may come to be built thereon. In truth, it does not seem reasonable to admit in this scenario the recourse to rules for determining taxable matter in order to broaden the scope of the rules of application.

d) Position Adopted

In light of the foregoing, we believe that it is necessary, in interpreting the provision of item 28.1 of the GSSD, to adopt the understanding that the residential use of an urban property suggests that it be given that actual destination, or that it be capable of being directly given that destination. Being as it appears to us, land for construction is not included within that item, in terms of objective scope. It therefore seems to us that land for construction, by its very nature, cannot be associated with residential use such as that suggested by item 28.1 of the GSSD.

Let it not be said that this judgment conflicts with the possibility of seeing an affectation coefficient applied to land for construction to which reference is made in Section II of Chapter VI of the SDC. In truth, one thing is the rules that the legislator imposes to determine the taxable property value of land for construction, and it is not strange that its construction capacity and the nature and vocation of what may be built thereon be taken into account, and another, quite different, is to expect that these rules be invoked to delineate the scope of the predictive field of the rules of application.

Moreover, the interpretation adopted here is in harmony with what appears to have been the intention of the Government, the author of the proposal that resulted in this rather imprecise legislative intervention.

When presenting and discussing, in Parliament, bill no. 96/XII (2nd edition), the Secretary of State for Tax Affairs expressly stated[2]:

"The Government proposes the creation of a special tax on high-value urban residential properties. This is the first time in Portugal that a special taxation is created on high-value properties intended for habitation. This tax shall be 0.5% to 0.8% in 2012 and 1% in 2013, and shall apply to houses valued at or above 1 million euros."

Now, the Secretary of State for Tax Affairs presents this bill referring to the expressions "urban residential properties", which are those contained in paragraph (a) of paragraph 1 of article 6 of the SDC, and "houses", being manifest that in one case and the other, these concepts do not include land for construction, referred to as they are in paragraph (c) of the cited provision.

Thus, despite the infelicity of the legislative technique, it follows with crystalline clarity that item 28.1 of the GSSD cannot be interpreted as including land for construction therein, for the reasons set forth above. Rather, it appears that the meaning and scope of the concept of "properties with residential use" is equivalent to that of "residential properties" mentioned in paragraph (a) of paragraph 1 of article 6 of the SDC.

3.1.4. On Compensatory Interest

Paragraph (b) of paragraph 1 of article 24 of the LRTA provides that "the arbitral award on the merits of the claim from which no appeal or challenge shall lie binds the tax authority from the expiration of the period provided for appeal or challenge, and the tax authority must, in the exact terms of the substantiation of the arbitral award in favor of the taxpayer and until the expiration of the period provided for the voluntary execution of judgments of the tax courts, restore the situation that would have existed if the tax act that was the subject of the arbitral award had not been performed, adopting the acts and operations necessary for that purpose".

It is not ignored that the legislative authorization granted to the Government by article 124 of Law no. 3-B/2010 of 28 April, on the basis of which the LRTA was approved, determines that the tax arbitration process constitutes an alternative procedural means to the judicial challenge process and to the action for the recognition of a right or legitimate interest in tax matters. Although paragraphs (a) and (b) of paragraph 1 of article 2 of the LRTA base the competence of arbitral tribunals on "declarations of illegality", it seems reasonable to understand that their competences include the powers that in judicial challenge proceedings are attributed to the tax courts, and it is certain that in judicial challenge proceedings, in addition to the annulment of tax acts, compensation claims may be heard, including in particular compensatory interest claims.

Indeed, the principle of cognoscibility of compensation claims, in administrative protest or in judicial proceedings, is justified whenever the damage that one seeks to have redressed results from fact attributable to the Tax and Customs Authority. Manifestations of this principle are found in paragraph 1 of article 43 of the General Tax Law and in article 61 of the Code of Tax Procedure and Process.

Thus, having the Claimant paid the tax that was required of it by the assessments complained of, it has the right to compensatory interest calculated from the date of the payment(s) until its complete reimbursement.

3.1.5. On Unconstitutionality

The Claimant raised the question of the unconstitutionality of item 28.1 of the GSSD, for violation of the principles of tax equality and contributive capacity.

Since the arbitral tribunal does not consider that item to be applicable in the case at hand, the consideration of that question becomes moot and procedurally useless.

  1. Award

In the terms and with the grounds set forth above, the arbitral tribunal awards:

a) The claim for arbitral determination is well-founded with the consequent annulment of the assessments complained of, with all legal consequences;

b) The claim for condemnation of the Respondent to pay compensatory interest at the legal rate, such interest being calculated from the date of the payment(s) of the taxes now declared unduly paid until its complete reimbursement.

  1. Value of Case

In accordance with the provision of paragraph 2 of article 315 of the Code of Civil Procedure, paragraph (a) of paragraph 1 of article 97-A of the Code of Tax Procedure and Process, and also paragraph 2 of article 3 of the Regulation of Costs in Tax Arbitration Proceedings, the value of the case is fixed at € 24,769.10.

  1. Costs

For the purposes of the provision of paragraph 2 of article 12 and paragraph 4 of article 22 of the LRTA and paragraph 4 of article 4 of the Regulation of Costs in Tax Arbitration Proceedings, the amount of costs is fixed at € 1,530.00, in accordance with Schedule I attached to said Regulation, to be borne entirely by the Respondent.

Lisbon, 23 December 2014

The Arbitrator

(Nuno Pombo)

[1] The wording of this arbitral decision does not conform to the new Orthographic Agreement

[2] See DAR Series I no. 9/XII -2, of 11 October, p. 32.

Frequently Asked Questions

Automatically Created

Are construction land plots (terrenos para construção) subject to Stamp Tax under Verba 28.1 of the Portuguese General Stamp Tax Table (TGIS)?
The central legal dispute in Process 527/2014-T concerns whether construction land plots (terrenos para construção) fall within the scope of Verba 28.1 of the TGIS. The claimant argued that this provision should only encompass properties effectively devoted to residential purposes with actual residential use, not undeveloped construction land. The Tax Authority countered that Article 67(2) of the Stamp Duty Code requires recourse to the Municipal Property Tax Code (MPTC) for undefined concepts, and since the properties were assigned residential use for valuation purposes with application of an affectation coefficient, this designation determines their tax treatment under Verba 28.1.
What was the legal basis for the Stamp Tax assessments challenged in CAAD Process 527/2014-T?
The legal basis for the contested Stamp Tax assessments was Article 1 of the Stamp Duty Code (Código do Imposto do Selo) and Verba 28.1 of the General Schedule of Stamp Duty (TGIS), which was added by Article 4 of Law 55-A/2012 of 29 October. The assessments totaled €24,769.10 for 2013, relating to two construction land plots with taxable property values of €1,362,270.00 and €1,114,640.00. Article 67(2) of the SDC, as amended by Law 55-A/2012, provided the interpretative framework requiring reference to the Municipal Property Tax Code for valuation and classification purposes.
Can taxpayers claim reimbursement and compensatory interest after annulment of unlawful Stamp Tax assessments on construction land?
Yes, under the arbitral request formulated in Process 527/2014-T pursuant to the Legal Regime for Tax Arbitration (RJAT), taxpayers can seek: (i) annulment of unlawful Stamp Tax assessment acts; (ii) reimbursement of all amounts paid or to be paid based on contested assessments; and (iii) condemnation of the Tax and Customs Authority to pay compensatory interest (juros indemnizatórios) for unduly paid tax obligations. Article 3 of the RJAT expressly admits cumulation of claims, including compensation claims arising from judgments on the validity of challenged assessments. The CAAD procedure involves filing an arbitration request, appointment of an arbitrator by the Deontological Council, constitution of the arbitral tribunal, submission of the Tax Authority's reply with the administrative file within 30 days, and issuance of an arbitral decision.
How did Law 55-A/2012 amend the Stamp Tax Code to include high-value real estate under Verba 28.1 of the TGIS?
Law 55-A/2012 of 29 October introduced Verba 28.1 to the General Schedule of Stamp Duty (TGIS) through its Article 4, creating a new annual Stamp Tax on high-value real estate classified as properties with residential use. The law also amended Article 67(2) of the Stamp Duty Code to establish that undefined concepts in stamp duty legislation should be interpreted according to the Municipal Property Tax Code (MPTC). This created the interpretative controversy in Process 527/2014-T: whether construction land classified with residential use for MPTC valuation purposes (with application of affectation coefficients) automatically qualifies as 'properties with residential use' subject to Verba 28.1, even without actual residential occupation.
What is the CAAD arbitral tribunal procedure for contesting Imposto do Selo liquidations on terrenos para construção?
The CAAD arbitral tribunal procedure for contesting Stamp Tax (Imposto do Selo) liquidations on construction land follows the Legal Regime for Tax Arbitration (Decree-Law 10/2011 as amended): (1) taxpayer files arbitration request within the legal deadline; (2) Deontological Council appoints an arbitrator, subject to party objection; (3) Tax Authority appoints legal representative and is notified to submit administrative file and reply within 30 days; (4) arbitral tribunal is formally constituted; (5) parties may request additional evidence; (6) the tribunal may dispense with the oral hearing under Article 18 RJAT if parties agree and sufficient written evidence exists; (7) tribunal issues arbitral decision within statutory timeframe. Process 527/2014-T demonstrates this procedure, with tribunal constitution on 26.09.2014 and expected decision by 31.12.2014.