Summary
Full Decision
ARBITRAL DECISION[1]
The arbitrator, Dr. Sílvia Oliveira, appointed by the Ethics Council of the Centre for Administrative Arbitration (CAAD) to form the singular Arbitral Tribunal, constituted on 17 May 2017, with respect to the above-identified case, decided as follows:
1. REPORT
1.1. A..., Lda., taxpayer no. ..., with registered office at Rua ..., no. ..., in Amadora (hereinafter referred to as the "Claimant"), submitted a request for arbitral pronouncement and constitution of a Singular Arbitral Tribunal on 9 February 2018, in accordance with the provisions of article 4 and no. 2 of article 10 of Decree-Law no. 10/2011, of 20 January [Legal Regime for Arbitration in Tax Matters (RJAT)], in which the Tax and Customs Authority (hereinafter referred to as the "Respondent") is the respondent.
1.2. In the arbitral request presented, the Claimant contends that there is no foundation for being notified of the following assessments relating to the year 2014:
1.2.1. Assessments issued regarding VAT, in the total amount of EUR 25,424.23, identified as follows:
- Assessment no. 2017..., in the amount of EUR 11,910.62;
- Assessment no. 2017..., in the amount of EUR 1,292.22;
- Assessment no. 2017..., in the amount of EUR 10,926.93;[2]
- Assessment no. 2017..., in the amount of EUR 1,294.46.
1.2.2. Assessment no. 2017..., in the amount of EUR 1,446.71, issued regarding IRC.
1.3. Additionally, in the same request, the Claimant contends that "(…) the application of a fine is noteworthy" regarding "(…) the use of shareholder loans directly without first passing through the bank account (…)".
1.4. Finally, the Claimant further requests in the arbitral request that "(…) the amounts of the guarantees delivered to the Public Treasury and the respective compensatory interest be refunded".
1.5. The request for constitution of the Arbitral Tribunal was accepted by the Honorable President of CAAD on 12 February 2018 and notified to the Respondent on the same date.
1.6. The Claimant did not proceed with the appointment of an arbitrator, wherefore, in accordance with the provisions of article 6, no. 2, subparagraph a) of RJAT, the undersigned was appointed as arbitrator by the President of the Ethics Council of CAAD on 4 April 2018, with the appointment being accepted within the legally provided timeframe and terms.
1.7. On the same date the parties were duly notified of this appointment, and did not express the intention to refuse the appointment of arbitrators, in accordance with the provisions of article 11, no. 1, subparagraphs a) and b) of RJAT, combined with the provisions of articles 6 and 7 of the Code of Ethics.
1.8. Thus, in accordance with the prescriptions in subparagraph c), of no. 1, of article 11 of RJAT, the Arbitral Tribunal was constituted on 24 April 2018, with an arbitral order being issued on the same date, directing the Respondent to "(…) within 30 days, respond, attach a copy of the administrative file and request, if desired, the production of additional evidence".
1.9. On 29 May 2018, the Respondent submitted its Response, having defended itself by exception (invoking illegal cumulation of claims) and by challenge, further requesting the dispensation of witness evidence production, having concluded that "(…) the Claimant should be notified to indicate which claim it wishes to have considered in the case" and "in any event, a decision should be issued determining the inadmissibility of the present request for arbitral pronouncement, absolving the Respondent of the claims, with all legal consequences".
1.10. On the same date, by order of this Arbitral Tribunal, the Claimant was notified to, within the period of 10 days, pronounce on the matter of exception invoked by the Respondent in the Response presented and to attach, within the same period, power of attorney.
1.11. The Claimant, on 4 June 2018, submitted a request to pronounce on the matter of exception referred to in point 1.9., above, as well as attach the missing power of attorney.
1.12. In this context, the Claimant stated that "the spirit of the (…) Decree-Law is clearly aggregate and unequivocally aims at procedural promptness and the principle of procedural economy, which are well embodied in the terms and grounds of its Art° 3° (…)" under which "(…) the cumulation of claims is permitted even if relating to different acts and joinder of plaintiffs (…) when the admissibility of the claims depends essentially on the assessment of the same factual circumstances and on the interpretation and application of the same legal principles or rules".
1.13. Thus, the Claimant contends that "(…) if we were to divide and subdivide cases we would be committing (…)" a violation of "(….) one of the basic Principles of Law which is procedural economy", wherefore it concludes that "(…) this Arbitral Tribunal has full subject matter jurisdiction to judge all the issues that are placed and invoked for its learned decision", and therefore "in this sense, and in all other respects of Law, the exception invoked by the Respondent (…) should be dismissed".
1.14. On 6 June 2018, the Respondent attached to the file the administrative case file.
1.15. On 7 June 2018, an arbitral order was issued (to whose full text reference is hereby made and shall be deemed fully reproduced), by which it was concluded that, verifying that the factual circumstances underlying the said corrections (regarding IRC and VAT) are essentially very diverse from each other, the cumulation of claims relating to the tax assessment acts that are the subject of the present request for arbitral pronouncement is inadmissible in light of the provisions of article 3, no. 1 of RJAT.
1.16. Thus, finding the exception of illegal cumulation of claims, formulated by the Respondent, to be well-founded, and for purposes of complying with the provisions of article 4, no. 3 of the Code of Administrative Court Procedure (CPTA) [by reference to the provisions of article 29, no. 1, subparagraph c) of RJAT], the Claimant was notified to, within the period of ten days, indicate which claim it wished to have considered in the case (under penalty of, failing to do so, there being dismissal of the instance as to all claims), and the Claimant was further notified to, within the same period, pronounce on whether it maintained an interest in the examination of the Expert and Witnesses presented in the arbitral request, relating to the claim it wished to have considered in this case and, if so, identify the facts to which it wished the witness evidence to relate.
1.17. The Claimant, on 18 June 2018, submitted a request to proceed with the claim regarding the assessment of the legality of the corrections verified in VAT and the subsequent assessments in this tax, maintaining an interest in the examination of the expert and witnesses presented in the request, "(…) responding to all the matter".
1.18. By arbitral order of 27 June 2018, "(…) this Tribunal decided, in accordance with the procedural principles set out in article 16 of the (…) (RJAT), of the autonomy of the arbitral tribunal in the conduct of the case and in the determination of rules to be observed [subparagraph c)] and of the free conduct of the case set out in articles 19 and 29, no. 2 of RJAT, to schedule the meeting (to which article 18 of RJAT alludes) for the (…) day 10 July 2018, at 2:30 p.m., to be held at the premises of CAAD, in Lisbon, for purposes of (a) examination of the witnesses listed by the Claimant, regarding the facts concerning the VAT assessments that are the subject of the arbitral request and (b) deciding on the possibility of dispensing with the submission of written arguments", with the said meeting being subsequently rescheduled, at the request of the parties, to 26 September 2018.
1.19. On 26 September 2018, the scheduled arbitral meeting was held at CAAD, in accordance with the provisions of article 18 of RJAT, for examination of the expert and witnesses listed by the Claimant, with audio recording of the statements given and of which the corresponding minutes were drawn up, which form an integral part of the present case.
1.20. In the context of the said meeting, given that the Parties did not waive the submission of written arguments, the Tribunal notified the Claimant and the Respondent to submit, simultaneously, written arguments within a period of 10 days.
1.21. Additionally, and in accordance with the provisions of article 21, no. 2 of RJAT, the period provided in no. 1 of that article was extended by a further period of two months, counted from the end thereof.
1.22. In these terms, in compliance with the provisions of article 18, no. 2 of RJAT, it was stated that the arbitral decision would be issued by the end of the period set in the preceding point.
1.23. Finally, the Tribunal warned the Claimant that, until the date of issuance of the arbitral decision, it should proceed with the payment of the subsequent arbitral fee, in accordance with the provisions of no. 3 of article 4 of the Regulation of Costs in Tax Arbitration Proceedings and communicate this payment to CAAD (which it did on 4 October 2018).
1.24. On 4 October 2018, the Claimant submitted its written arguments, to reiterate the arguments presented in the arbitral request, regarding the assessment of the legality of the corrections verified in VAT and the subsequent assessments in this tax, concluding in the same terms.
1.25. On 8 October 2018, the Respondent submitted its written arguments, to reiterate the arguments presented in the Response, concluding that "the exception invoked should be found well-founded and in any case the present request for arbitral pronouncement should be found inadmissible, maintaining in the legal order the tax assessment act being challenged and absolving, accordingly, the respondent entity of the claims, all with the due and legal consequences".
1.26. On 10 October 2018, the Claimant submitted a request to respond to the arguments of the Respondent, having understood that the same "clearly constitute new matters and infer (…) new facts".
1.27. On 15 October 2018, an arbitral order was issued to assess and decide what was alleged by the Claimant in the request referred to in the preceding point, to the effect that, "in accordance with the procedural principles set out in article 16 RJAT, of the autonomy of the arbitral tribunal in the conduct of the case and in the determination of rules to be observed [subparagraph c)] and of the free conduct of the case set out in articles 19 and 29, no. 2 of RJAT (…)", "(…) there is no legal justification for the need to grant the Claimant a period to submit counter-arguments, as there are no legal reasons that justify it, and it is not permissible to admit to the case the Request submitted by the Claimant on 10 October 2018".
1.28. By request dated 23 October 2013, the Respondent submitted an Order for the Appointment of Substitution of one of the Jurists.
2. CAUSE OF ACTION
2.1. The Claimant submitted a request for arbitral pronouncement on 9 February 2018, to the effect that the illegality of the tax assessment acts for IRC and VAT, and corresponding assessment of compensatory interest, relating to the financial year 2014, be declared, identified as follows:
| ASSESSMENT NO. | TAX | AMOUNT (EUR) |
|---|---|---|
| 2017 ... | VAT | 11,910.62 |
| 2017 ... | CI | 1,292.22 |
| 2017 ... | VAT | 10,926.93[3] |
| 2017 ... | CI | 1,294.46 |
| 2017 ... | IRC | 1,446.71 |
| TOTAL | | 26,870.94 |
2.2. The Claimant alleges, in summary, that it was subject to an inspection action, carried out by the Tax Inspection Services (SIT), relating to the financial year 2014, in compliance with Service Order no. OI2016..., the scope of which was initially partial, in respect of IRC, and that subsequently the scope of the action was extended to partial in respect of IRC and VAT.
2.3. In the context of the inspection procedure, the SIT collected and analyzed various elements, which allegedly made it possible to demonstrate (i) that the turnover should be supported by invoices issued higher than that recorded in the accounts and declared for tax purposes, as well as (ii) the existence of expenses that were disregarded for tax purposes, with the SIT identifying an alleged omission in the accounting of pastry and catering services, subject to IRC, in the amount of EUR 100,455.32 and an alleged accounting of expenses not accepted for tax purposes, in respect of IRC, in the amount of EUR 4,461.59, totaling corrections in respect of IRC of EUR 104,916.91.
2.4. Now, according to the SIT, the services/sales provided by the taxpayer being subject to VAT, at the reduced rate (6%) and the normal rate of 23%, in the calculation of VAT owed (as a consequence of the correction made to turnover), the corrected services/sales were considered, with the SIT proposing a correction in respect of VAT of EUR 22,836.04.
2.5. From the corrections proposed and made by the SIT resulted, for the Claimant, the acts of additional assessment in respect of IRC and VAT, identified above in points 1.2. and 2.1., acts which the Claimant wishes to have annulled in this arbitral process, taking into account that it understands "(…) that there is no foundation for the assessments issued, given that the saf-t submitted to E-invoice coincide with the saf-t delivered in the inspection act, after introducing the cancellations of the invoices already mentioned, except the NC which were not reflected in the DP´s, to the detriment of the taxpayer", in light of the arguments which are reproduced below.
Invoicing Procedures
2.6. In this matter, the Claimant begins by stating that "(…) it has as its corporate purpose the activity of pastry shops, confectionery, restaurant and snack bar, operating in the year 2014 two establishments, one located in ... and another in ... (…)", and its invoicing system "(…) is simple and is divided into two moments: the sale, with recording in POS terminals for invoicing at the establishments and administrative treatment by management".
2.7. The Claimant continues by stating that "each establishment sends daily its respective documentation (…) for treatment by management and subsequent sending to accounting (…)", acknowledging that "the computer system (…) has some blocking functions in the functionalities available to employees, although, to avoid difficulties with customers, it allows correcting some situations such as (…)" the replacement of "(…) an invoice/simplified invoice that was issued without a tax identification number for another with a tax identification number", the replacement of "(…) a simplified invoice for an invoice when the consumer requests it", as well as the "issuance of return notes of pastry and bakery products to the supplier (…)".
2.8. The Claimant reiterates that "in management procedures, direct cancellation of invoices is blocked in the invoicing system to users without administrator permissions, otherwise management would run the risk of there being invoice cancellations without any justification and in an indiscriminate manner", and therefore contends that "within the same computer system, in the office the saf-t files are not altered, but rather cancellations of incorrectly issued invoices are made, submitted by the establishments in the daily documents".
2.9. On the other hand, the Claimant asserts that "the establishments return daily to the pastry and bakery supplier, CIPP, the products that were not consumed, which, if they meet the conditions to be consumed are delivered to a non-profit association (…), which distributes them to needy people".
2.10. Thus, the Claimant cannot agree with the statement contained in the Report issued in the context of the inspection procedure that "the justification presented by the taxpayer for the need to alter the saf-t files extracted from the POS terminals of the commercial establishments, alleging lack of computer permissions of employees working in the pastry shops to proceed with the cancellation at the site of improperly issued invoices, requiring these cancellations to be carried out in the office by the system administrator in month-end closing operations is devoid of foundation", for it understands that it is demonstrable that, "(…) by the moment of issuance (…), we have the document issued, and the document of correction being issued (…) and then the corrected document (…)" being an "(…) automatic process (…), as long as it fits within the established procedures".
2.11. In these terms, the Claimant concludes that "there is no intention to alter the invoicing, nor is it clear how this objective would be achieved through the cancellation of invoices".
Cancellation of invoices
2.12. In this matter, the Claimant refers that "(…) improperly issued invoices can only be cancelled in the office, given that employees are not competent to carry out the cancellation procedure, and should instead attach the improperly issued documents to the daily cash logs, dated and initialed".
2.13. Thus, the Claimant clarifies that "the cancelled invoices with high values are associated with issuance errors by employees, at the time of issuance of the return guides for pastry and bakery products that remain at the end of the day and are returned to the supplier (…)", and that "in this task employees by mistake proceeded to issue an invoice, which amplifies the error (…), and it is perfectly clear that it is an issuance error, either by the moment of issuance, either by the values in question".
Credit Notes issued
2.14. In this matter, the Claimant does not agree with the position taken by the SIT, for although "it is true that the correction of the tax should only occur, in accordance with article 78°, no. 5 of CIVA, the situation in question does not have that configuration, given that these operations occurred in the act of direct sale to a final consumer, to whom the incorrect invoice that was the origin of the issuance of the Credit Note was not delivered, that is, it does not fall within the terms of article 78°, no. 4 of CIVA (…)", and that "the taxpayer was always in possession of the incorrectly issued invoice, of the respective NC for cancellation, so these were internal accounting movements and consequently it complies with all the CIVA requirements for VAT deduction".
Non-deductible expenses
2.15. In this context, the Claimant does not agree with the understanding of the SIT presented in the RIT (to the effect of disregarding expenses with tobacco, because "in accordance with what is recorded in the accounts (…), there was no sale of tobacco-derived products at the counter, there being no justification for the company to incur expenses with products it does not sell", understanding that "they are not necessary to guarantee or obtain income subject to IRC, and therefore it is not possible to consider them for tax purposes").
2.16. In fact, the Claimant argues that the legislation requires that "(…) they be related to the company's activity or the company's profit-making purpose (…)" and that although "(…) the expenses in question do not fall within any of the typical situations of article 23° A of CIRC, and it can be stated that they meet the requirements to be considered deductible from a tax perspective (…) the expenses in question cannot be considered excessive in relation to the company's needs and capacities, nor are they devoid of criteria of economic rationality", understanding that "(…) they are an expense of the company deductible from a tax perspective".
Supplies/Advances
2.17. In this matter, the Claimant does not agree with the position of the SIT presented in the RIT, to the effect that it was regularly using the procedure of making payments to employees through the supplies/advances account, with the Claimant arguing in its defense that such procedure was used in an occasional manner with the objective of "ensuring that salaries were paid (…) on the usual deadline" taking into account "(…) situations of greater liquidity difficulty of the company (…)"
SAF-T files
2.18. The Claimant does not agree with the position of the SIT assumed in the RIT regarding the fact that "two saf-t files are generated in the pastry shop of ... (…)" originating "(…) the issuance of invoices with the same number, in the same economic period, which corresponded to different services" for it considers that "the requirements established by the order (…)" applicable are being met.
2.19. In light of the foregoing in the request, the Claimant concludes that it has "implemented clear management procedures (…) that aim, in particular, to invoice and return pastry and bakery products that remain daily, with restrictions on the profile of use of employees", understanding that "(…) there is no foundation for the assessments issued for lack of VAT, in the economic year 2014 (…)".
2.20. Additionally, and in respect of IRC, the Claimant further understands that "(…) the expenses incurred with tobacco (…), are deductible (…)" there being no place for the respective assessment of tax.
2.21. Finally, the Claimant concludes that the application of a fine should be relevant regarding the use of supplies/advances to ensure the timely payment of salaries to employees.
Suspension of Assessment
2.22. The Claimant also alleges that having had knowledge "(…) of the assessments already with the execution process underway", it was "(…) forced to mobilize funds (…) to suspend the assessment processes (….)", and therefore "(…) it wishes to have the amounts of the guarantees delivered to the Public Treasury and the respective compensatory interest refunded".
2.23. The Claimant concludes the arbitral request by petitioning that the same be granted in full.
3. RESPONSE OF THE RESPONDENT
3.1. The Respondent submitted a Response on 29 May 2018, having defended itself by challenge and by exception.
By Exception: Of illegal cumulation of claims
3.2. In this context, the Respondent contends that the Claimant makes, in the request for arbitral pronouncement, an illegal cumulation of claims, by cumulating therein the requests for annulment of the IRC and VAT assessments, with the Respondent not agreeing with what the Claimant has alleged, that the admissibility of such requests depends essentially on the assessment of the same factual circumstances and of law and on the interpretation and application of the same legal norms.
3.3. In fact, the Respondent contends that "(…) the Claimant seems to make an essential error: that of considering (…) without legal foundation, that because factual circumstances have been identified in the same inspection action that support corrections in respect of VAT and in respect of IRC, this circumstance would not contain any specificity for purposes of challenging the assessments".
3.4. The Respondent reiterates that "(…) the claims formulated to the tribunal undoubtedly relate to the annulment of assessments of different taxes, founded on different causes of action", "(…) whereby the assessment of the legality of the assessments presupposes the assessment of facts with disparate relevance in each case".
3.5. And, being unquestionable, for the Respondent, "(…) that the assessment of the legality of the assessments being challenged depends on the resolution of questions of law completely diverse", the Respondent contends that "(…) the cumulation effected by the Claimant is illegal, and the same should not be admitted by the Arbitral Tribunal (…)".
By Challenge
3.6. The Respondent refers that, initially, "(…) the external inspection action (…) had a partial scope, in respect of Corporate Income Tax (IRC), and that, after detection of irregularities in respect of Value Added Tax (VAT), the scope of this action was extended to partial in respect of IRC and VAT, with notice being given to the legal representative of the taxpayer (…)", having resulted from this "(…) inspection action (…) corrections in respect of VAT and IRC (…)", which "(…) translated into corrections to the taxable matter of €22,836.04, in respect of VAT, and €104,916.91 in respect of IRC (…)".
Invoicing - Document number duplication
3.7. Now, in the context of the said inspection action, the SIT found a discrepancy in the annual value of sales/services provided in the year 2014 of EUR 170,892.92, allegedly due to sales/services represented by invoices with the same number.
3.8. According to the Respondent, due to the fact that "(…) A... has two commercial establishments and one of them has two POS terminals, the pastry shop of ..., they may not generate a single SAF-T file if the invoicing system is not centralized", wherefore "(…) the existence of two POS terminals in the pastry shop of ... which result in the export of two SAF-T files, constitutes an infraction (…)".
Divergences between e-Invoice, SAF-T and VAT periodic declarations
3.9. Additionally, "(…) differences have been identified between the values declared in the tax base of the SAF-T files of the invoicing with what was communicated in the e-invoice and in the periodic declarations (PD) of VAT, referring to the economic period of 2014 (…)", with the SIT concluding that "the VAT assessed declared by the company in the corresponding periodic VAT declarations with quarterly frequency resulting from the active operations it carried out, is higher than the VAT assessed communicated through the e-invoice (….)".
3.10. In these terms, "in the calculation of the VAT owed, as a consequence of the correction made to turnover, the services/sales assessed (…) are considered and its correction was proposed in the amount of €22,836.04".
Non-deductible expenses (IRC)
3.11. On the other hand, also in the context of the inspection, the SIT understood that expenses associated with the acquisition of tobacco-derived products, from the company B..., S.A., for not complying in full with the requirements listed in article 23°-A of the IRC Code, should not be considered as necessary to guarantee or obtain income subject to IRC, it not being possible, according to what the Respondent contends, to consider them for tax purposes, making it necessary "(…) to eliminate this expense in the amount of €4,461.59 (…)".
Supplies/Advances
3.12. In this matter, in accordance with the work carried out by the SIT, they found that allegedly there were irregularities in the supplies/advances account, having concluded that there would have been "(…) a conversion of hypothetical credits of the shareholders over the A... related to the processing of salaries (…) into supplies/advances (…)", with payments being made to employees in exchange for supplies/advances and the accounting entry being made in which supplies/advances are constituted in exchange for liens on employees, these procedures assuming, according to the SIT, a regular nature, reflecting a habitual practice.
3.13. In this context, the SIT concluded that there would be "(…) a violation of no. 1 and no. 2, of article 63°-C of the LGT, which states that all movements relating to supplies/advances must be made through bank accounts exclusively assigned to the company".
3.14. Proceeding, the Respondent concludes its Response to the effect that "(…) the arguments invoked by the Claimant in the request for arbitral pronouncement must fail (…), as well as the documents attached, for not corresponding to the truth or their not being able to extract the legal effects desired by the Claimant", concluding that "(…) the reasons and arguments presented by the Claimant in favor of the (…) desired annulment of the tax assessment acts must entirely fail".
Of dispensation of witness evidence
3.15. Finally, the Respondent, by understanding that "the issues to be resolved are essentially matters of law, and there is no apparent necessity for the production of witness evidence (…)" submitted a request for dispensation thereof.
4. PRELIMINARY MATTER
4.1. The request for arbitral pronouncement is timely.
4.2. The parties have legal personality and capacity to be parties, are legitimate as to the request for arbitral pronouncement and are duly represented, in accordance with the provisions of articles 4 and 10 of RJAT and article 1 of Order no. 112-A/2011, of 22 March.
4.3. The Respondent raised, in the Response presented on 29 May 2018, the illegality of the cumulation of claims made by the Claimant, by understanding that the existence of the same factual circumstances is not verified, for "(…) the claims formulated to the tribunal (…) relate to the annulment of assessments of different taxes, founded on different causes of action".
4.4. On the same date, by order of this Arbitral Tribunal, the Claimant was notified to, within the period of 10 days, pronounce on the matter of exception invoked by the Respondent, having submitted, on 4 June 2018, a request to the effect that it is permitted "(…) the cumulation of claims even if relating to different acts (…) when the admissibility of the claims depends essentially on the assessment of the same factual circumstances and on the interpretation and application of the same legal principles or rules", and therefore "(…) if we were to divide and subdivide cases we would be committing (…)" a violation of one "(….) of the basic Principles of Law which is procedural economy", concluding that "(…) this Arbitral Tribunal has full subject matter jurisdiction to judge all the issues that are placed and invoked for its learned decision", and therefore "the exception invoked by the Respondent (…) should be dismissed".
4.5. By arbitral order of 7 June 2018 it was concluded that the matters that are the basis of the said corrections (in respect of IRC and VAT) are essentially very diverse from each other, wherefore the cumulation of claims relating to the tax assessment acts of IRC and VAT, which are the subject of the present request for arbitral pronouncement, is inadmissible in light of the provisions of article 3, no. 1 of RJAT.
4.6. Thus, for purposes of complying with the provisions of article 4, no. 3 of CPTA [by reference to the provisions of article 29, no. 1, subparagraph c) of RJAT], the Claimant was notified to, within the period of ten days, indicate which claim it wished to have considered in the case (under penalty of, failing to do so, there being dismissal of the instance as to all arbitral claims formulated, with the Claimant, on 18 June 2018, having submitted a request to the effect that it wished the arbitral claim to proceed regarding the assessment of the legality of the corrections verified in respect of VAT and the subsequent assessments in respect of this same tax.
4.7. In this context, it is necessary first to analyze the possible merit of the exception invoked by the Respondent.
4.8. In accordance with the provisions of article 3, no. 1 of RJAT, "the cumulation of claims even if relating to different acts (…) are admissible when the admissibility of the claims depends essentially on the assessment of the same factual circumstances and on the interpretation and application of the same legal principles or rules".
4.9. It should be recalled that the existence of this special rule for Arbitral Tribunals excludes the applicability of the rules of the Code of Tax Procedure and Process (CPPT) and of CPTA, which are only applicable subsidiarily, in accordance with the provisions of article 29, no. 1, subparagraph c), of RJAT.
4.10. According to the transcribed rule, the cumulation of claims requires that two cumulative requirements be met - that the admissibility of the claims depends essentially on the assessment of the same factual circumstances and on the interpretation and application of the same legal principles or rules.
4.11. In case law and doctrine it has been a settled understanding that the viability of the cumulation of claims does not require an absolute identity of factual situations, it being sufficient that these situations be similar in the relevant aspects for the decision, as can be derived from the term "essentially" used in that rule.
4.12. However, the use of the adverb "essentially" must not fail to mean that a total coincidence of the factual circumstances and of the applicable rules is not required.
4.13. Indeed, as referred to in Arbitral Decision no. 225/2014-T, of 9 October 2014, which is here adopted in this matter, "(…) to assess the identity of the relevant facts it will be necessary to consider the factuality from which, in the taxpayer's view, the illegality of the acts that are the subject of the case results. In this context, it will be necessary to consider the material elements of the facts underlying the controversial tax acts or the action of the Tax Administration in the tax procedure underlying the issuance of these acts. To the extent that, to assess the legality of both tax acts it is necessary to consider a single transversal material reality to the various tax facts in question, or a single procedural action of the Tax Administration from which the various tax acts in dispute result, the factual matter to be assessed to determine the illegality of these acts may be essentially the same. Thus, the evidentiary proceedings necessary to assess the legality of one of the acts may be used to assess the legality of another act that is the subject of the case, thus enhancing the uniformity of decisions regarding the same factual issue to the benefit of the legal certainty that should guide the resolution of disputes in the context of the tax arbitration process".
4.14. But then, what should not be understood by "same factual circumstances"?
4.15. By "same factual circumstances" should not, unless better informed, be understood restrictively and exactly as "the same facts", for, according to this restrictive interpretation, cumulation of claims could only exist when the same fact was in question in relation to various tax assessments relating to various years.
4.16. This Arbitral Tribunal understands, like other arbitral case law on the matter, that the rule in question should not be interpreted in this restrictive manner, since the expression "factual circumstances" is not equivalent to "facts".
4.17. To find the precise scope of the rule it will be useful to take into account the interpretation that doctrine has made of the provision relating to the cumulation of claims in the tax process.
4.18. Article 104 of CPPT provides on this matter, according to which, "in judicial challenge, claims may be cumulated (…) in the case of identity of the nature of the taxes, the grounds of fact and law invoked and the competent court".
4.19. As to the "identity of grounds of fact", Counselor Jorge Lopes de Sousa argues (in "Code of Tax Procedure and Process", Annotated and Commented, 6th ed., Vol. II, Áreas, Lisbon, 2011, p. 183) that "for cumulation and joinder to be viable, it is not necessary that there be an absolute identity of factual situations, it being sufficient that the legal-fiscal question to be assessed be identical".
4.20. On the same issue, in commentary to article 71 of CPPT (cumulation of claims in gracious reclamation), the same Author reaffirms that "cumulation of claims does not require an absolute identity of factual situations, it being sufficient that the legal-fiscal question to be assessed be identical", adding that "for that identity, what will be necessary is that the legal issue to be assessed be fundamentally the same and that the factual situation be similar in the points that are relevant for the decision (…)" (emphasis ours).
4.21. But can this interpretation be applied to the provisions of article 3, no. 1 of RJAT, given that in this provision one speaks of "same factual circumstances", while in the provision of CPPT one refers to "grounds of fact"?
4.22. In this respect, one cannot fail to consider that the "factual circumstances" to which article 3, no. 1 of RJAT refers are the factual circumstances that are relevant to the cause of action, and only those, and to that extent, given that the factual circumstances that are relevant to the cause of action are those on which the factual basis rests, the expressions are equivalent.
4.23. Therefore, what should be relevant for the question of the admissibility of the cumulation of claims within the scope of RJAT are not any characteristics of the facts alleged in the request, but only the characteristics that have a connection with the cause of action.
4.24. There will be, thus, identity of factual circumstances when the factual circumstances are so similar that the factual basis is identical for all the claims, such that the assessment that the judge must make on the factual matter is identical in all of them.
4.25. In this context, the cited Counselor goes even further, asserting that it is necessary that, by proving the facts that serve as the basis for one of the claims, the "total or partial factual support necessary for the admissibility of all of them" be proved, with this interpretation being justified by the ratio of the rule itself, which lies in the economy of means and uniformity of decisions (see Decision of STA of 16-11-2011, proc. no. 0608/11).
4.26. Now, such economy of means and uniformity of decisions will only be realized when the judge is faced with different claims for which the same judgments apply both on the factual matter and on the matter of law, that is, put in other words, "although faced with a multiplicity of facts, the judge must make the same judgments for all the facts" (emphasis ours).
4.27. Thus, when more than one assessment act is being challenged, only in the cases indicated in article 3, no. 1, of RJAT will there be a possibility of cumulating claims, that is, "the cumulation of claims even if relating to different acts (…)" is only admissible "(…) when the admissibility of the claims depends essentially on the assessment of the same factual circumstances and on the interpretation and application of the same legal principles or rules".
4.28. In the case at hand, different assessment acts are being challenged, of IRC and VAT, relating to distinct situations from each other, for although they result from the same inspection procedure, carried out by the SIT:
4.28.1. In the case of VAT, the tax assessments in the total amount of EUR 22,836.04 relate to the differences in VAT calculated by the SIT between the amounts of VAT assessed per quarter, registered in the SAF-T files of the invoicing and the VAT assessed declared in the respective periodic declarations;
4.28.2. In the case of IRC, the assessment which is mentioned in the request (no. 2017..., in the amount of EUR 1,446.71), should relate to the non-consideration of expenses, in the amount of EUR 4,461.59, which the SIT understood as not indispensable to the maintenance of the source of income and, therefore, understood to eliminate this amount for tax purposes.[4]
4.29. Thus, illegalities are invoked with regard to the said IRC and VAT assessment acts which are in no way related.
4.30. In these terms, it is verified, in the case, that the factual circumstances that underlie the said corrections are essentially very diverse from each other, wherefore the cumulation of claims relating to the tax assessment acts that are the subject of the present request for arbitral pronouncement is inadmissible in light of the provisions of article 3, no. 1 of RJAT.
4.31. In conclusion, finding the exception of illegal cumulation of claims to be well-founded, the tenor of the arbitral order dated 7 June 2018 is confirmed, with the arbitral claim proceeding regarding the assessment of the legality of the corrections verified in respect of VAT and the subsequent assessments in respect of this tax, in accordance with the expressed will of the Claimant, manifested in its request dated 18 June 2018.[5]
4.32. No nullities are verified, so it is now necessary to rule on the merits of the request.
5. FACTUAL MATTER
Having regard to the fact that the Tribunal does not have to pronounce on everything that was alleged by the parties, it being its duty to select the facts that matter for the decision and to distinguish between proven and non-proven matter [cf. article 123, no. 2, of CPPT and article 607, nos. 3 and 4, of CPC, applicable ex vi article 29, no. 1, subparagraphs a) and e), of RJAT], taking into account the positions assumed by the parties, the documentary evidence attached to the file and the witness evidence produced, the following facts are considered proven:[6]
Of the facts proven
5.2. The Claimant has as its corporate purpose the "activity of pastry shops, confectionery, café, restaurant and snack bar", being registered, for the exercise of economic activity, since 02/01/2008, with "Main CAE 56303 Pastry shops and tea houses".
5.3. For VAT purposes, the Claimant is, since the date of commencement of activity, a taxpayer that is classified under the normal regime with quarterly frequency.
5.4. For IRC purposes, the Claimant is classified under the general regime by exercising, as its main activity, a commercial nature activity.
5.5. The Claimant's activity is carried out in two commercial establishments, the Pastry shop of ... (located at ..., no. ... –..., in Amadora), and the Pastry shop of ... (located at ..., Rua ..., in ...), both operating in rented premises, with the shop of ... being rented by the managing partner of the Claimant, Mr. C... and the shop of ..., being rented by the company D..., Lda.
5.6. The pastry shop of ... has one POS terminal and the pastry shop of ... has two POS terminals.
5.7. The issuance of invoices by the Claimant is not centralized, with a monthly SAF-T file being generated, autonomously, by each of the POS terminals.
5.8. The Claimant carries out a month-end closing procedure in the office, which consists of cash reconciliation, cancellation of invoices incorrectly issued by employees of the pastry shops.
5.9. In compliance with Service Order no. OI2016..., of 22/08/2016, an external inspection action was carried out on the Claimant, for the year 2014, initially with a partial scope (IRC).
5.10. This external inspection action was carried out within the scope of the "restoration project .../...", directed at taxpayers in this area who have declared successive losses for 3 financial years.
5.11. In the context of the said Order, the Claimant was notified of Office no. ..., of 26/08/2016 to, on the date of commencement of the inspection action, make available to the inspection services of the Tax Directorate of Lisbon, the following elements relating to the financial year 2014:
• Analytical trial balances as of 31/12/2014;
• Tax file of the financial year 2014 (for consultation);
• SAF-T of the accounts of the financial year 2014;
• SAF-T of annual invoicing, with description of products sold, for the financial year 2014.
• Inventory of inventories for the financial year 2014;
• Bank statements attesting the accounting balances as of 31/12/2014.
5.12. The external inspection procedure began on 24/11/2016 and, on this date, the Claimant was notified (in the person of one of its managing partners) to justify, within 10 days, the reason(s) why the company presented, in the financial year 2014, tax losses in the amount of EUR 84,753.66, and was further informed that failure to provide justification would constitute grounds for the determination of the taxable matter and presumed VAT by resorting to indirect methods.
5.13. The Claimant sent, on 05/12/2016, to the SIT, a statement justifying the losses.
5.14. The scope of the external inspection action was extended, on 22/03/2017, to IRC and VAT, for the year 2014, in consideration of the irregularities detected by the SIT in respect of VAT.
5.15. The external inspection acts were concluded on 12/04/2017.
5.16. The Claimant was notified, through Office no. ... of 04/05/2017, of the draft conclusions of the Inspection Report, according to which, in respect of VAT, the SIT identified and concluded the following:
5.16.1. "The VAT assessed declared by the company in the corresponding periodic declarations with quarterly frequency resulting from the active operations it carried out, is higher than the VAT assessed communicated through the e-invoice";
5.16.2. "Considering (i) the duplication of invoice numbers (…) evidenced (…), (ii) the invoices issued (without the effect of credit notes), (iii) the non-consideration of VAT declared in the periodic declarations referring to the self-invoicing issued by B..., S.A., given that this amount does not appear in the SAF-T files generated based on the invoicing issued by the company's POS terminals, we have that EUR 100,220.91 (tax base) and EUR 22,836.04 (VAT assessed), calculated by the difference between the amounts of VAT assessed per quarter registered in the SAF-T files of the invoicing and the VAT assessed declared in the respective periodic declarations (…), were not declared in the referred periodic VAT declarations, which constitute omissions to income subject to (…) VAT (…)".
5.17. Additionally, the Claimant was notified to exercise its right to prior hearing on the content of the draft conclusions of the RIT referred to above.
5.18. The Claimant exercised, on 23/06/2017, its respective right to hearing, to the effect that:
"The company's invoicing system is composed of three POS terminals;
The issuance of invoices is not centralized, with a saf-t file being generated autonomously by each POS;
Month-end closing procedures are carried out in the office, which consist of cash reconciliation, cancellation of invoices that have been incorrectly issued by employees at the pastry shops and generation of a finalized monthly file […] Saf-t, in which the documents for cancellation of invoices, duly justified and carried out in the application, are reflected;
Employees at the pastry shops do not have permission to carry out invoice cancellations, but may issue credit notes;
Only in the office, the system administrator, has the profile to cancel invoices[…];
The divergence between the amounts communicated to the AT through the e-invoice application and those contained in the saf-T files are actual and result from the fact that they were sent within the scope of the inspection procedure by the IT service provider of the company, the saf-t files extracted from each of the equipment installed in the stores and not the saf-t file resulting from the month-end closing operations carried out in the office".
5.19. The SIT, after analysis of the explanations given by the Claimant in the said right to hearing, decided to maintain the grounds and the amounts of the corrections, in respect of VAT, proposed in that draft report, as they understood that:
"The justification presented by the taxpayer for the need to alter the saf-t files extracted from the POS terminals of the commercial establishments, alleging lack of computer permissions of employees at the pastry shops to proceed with the cancellation at the site of improperly issued invoices, requiring these cancellations to be carried out in the office by the system administrator in month-end closing operations is devoid of foundation" for "(…) there are records of invoices cancelled in the pastry shops in all POS terminals (…), thus demonstrating that invoice cancellation in the office could also be done by employees in the pastry shops. Thus it remains unjustified what the purpose of the invoice cancellations in the office was, the consequence of which was the significant alteration of the invoicing amounts communicated to the AT".
"This evidence is further reinforced by the fact that, due to the obligation to transmit to the AT by the 25th of the following month through the e-invoice application, the amounts invoiced in the previous month (…)" whereby "(…) the month-end closing operations which the taxpayer mentions would necessarily have to be carried out between the closing of the month which the taxpayer mentions, would necessarily have to be carried out between the first and twenty-fifth day of the month following the issuance of the invoices and consequently the date of the cancellations carried out in the office would have to be within that time interval". However, "(…) these invoices were cancelled in the time interval between the 26th to 31st, that is, before the month ended (so the backup of the saf-t file of that month had not yet been sent to the office for the month-end closing operations".
Additionally, "further analyzing the delivery reports that prove the submission of saf-t files generated in the POS terminals of the pastry shop of ... through the e-invoice application for the month of May 2014 (…), we verify that both were submitted on 19/06/2014, which proves that the cancellation of the invoice (…) carried out on 30/05/2014 (thus before the sending of the backup of the saf-t file of May 2014 to the office for the month-end closing operation), could never have been done in the office but rather in the shop", having the SIT identified other situations similar to this, wherefore in this context they concluded that "(…) the invoice cancellations evidenced in table 23, were made in the commercial establishments. Therefore, the alterations subsequently produced in the office to the saf-t files generated by the POS terminals installed in the two pastry shops, by not being carried out by employees in the pastry shops, as was demonstrated they could have been done, had as purpose other objectives which the taxpayer could not justify".
On the other hand, "analyzing in detail the invoicing that occurred in those months which according to the taxpayer is due to something abnormal, more specifically to the invoices incorrectly issued and which were later cancelled in the office, contrary to what was evidenced in table 2 sent by the taxpayer, there are invoices cancelled in the office and expressed in table 24, in which the customer is clearly identified, not appearing only as a final consumer". In fact, "(…), the invoices with identified consumer that were materially relevant and cancelled in the office in month-end closing procedure, had as customer the company CIPP (…)", with the underlying operations not being "(…) sales operations/services that are usually practiced at the counter of the pastry shops (…)". They are rather commercial transactions between two clearly identified companies, operating in the same line of business, which have business relationships with each other and whose management bodies include common elements".
On the other hand, and regarding the Gross Margin of Sales (MBVII) "(…) associated with the Claimant's CAE is lower than the average gross margin of sales of the sector in the Lisbon district (…)" whereby "(…) we can infer that the context of normality in relation to the invoicing that the taxpayer tried to demonstrate in the (…) right to hearing, despite having presented successive tax losses since 2011, does not adhere to reality".
Finally, and regarding the credit notes "(…) referred to in the (…) right to hearing (…) the same were not accounted for as the taxpayer stated, despite being considered (…) in the saf-t of invoicing for March (…). On this matter, it is important to note that the credit notes do not comply with the requirements typified in article 78, no. 5 of CIVA (…) whereby the amounts considered by the AT in the draft report are maintained (…)".
"Also in relation to the amount of VAT included in the credit notes (…), the same, by not being accounted for and not complying with the said requirements, would never allow the corresponding regularization in favor of the company in the periodic declarations of VAT, whereby the amount of VAT owed calculated by the AT (…) is maintained".
5.20. The Claimant was notified of the respective Final Report, through Office dated 08/08/2017, according to which the Claimant was notified of the decision of 6 September 2017, of the Head of Division of the SIT, of the Tax Directorate of Lisbon, "by subdelegation of DFA", which confirmed the maintenance of all the corrections proposed.
5.21. Two Notices of Violation (cases no. ...2017... and no. ...2017..., relating to OI 2016...), were filed, on 17 August 2017, by the Tax Service ... 3, relating to the administrative violation processes concerning the infractions identified within the scope of the inspection procedure.
5.22. No other facts capable of affecting the decision on the merits of the request have been proven.
Motivation regarding factual matter
5.23. With regard to the matter of facts proven, the conviction of the Arbitral Tribunal was based, in addition to the free assessment of the positions assumed by the Parties (on matters of fact), on the content of the documents attached to the file, not contested by the Parties, on the analysis of the administrative file attached by the Respondent, as well as on the evidence produced in the examination of expert and witnesses presented by the Claimant.
Of the facts not proven
5.24. It has not been proven for what reason the invoice cancellations, carried out in the office of the Claimant, by the system administrator, in month-end closing operations, were not timely considered for purposes of preparing the monthly SAF-T files.
5.25. No facts have been found as unproven with relevance for the arbitral decision.
6. GROUNDS OF LAW
6.1. The tax arbitration process, as an alternative means to the judicial challenge process (no. 2 of article 124 of Law no. 3-B/2010, of 28 April) is, like the latter, a procedural means of mere legality, in which the aim is to eliminate the effects produced by illegal acts, annulling them or declaring their nullity or non-existence [articles 2 of RJAT and 99 and 124 of CPPT, applicable by virtue of the provisions of article 29, no. 1, subparagraph a) of RJAT].
6.2. Therefore, the acts being challenged must be assessed as they were carried out, and the Tribunal cannot, upon finding that an illegal ground has been invoked as support for the administrative decision, assess whether its action could have been based on other grounds (irrelevance of post-hoc reasoning).[7]
6.3. Thus, it is in light of the reasoning contained in the Tax Inspection Report that the legality of the assessments being challenged must be assessed.
6.4. Having made the preliminary reservation, so that there is no doubt, proceeding with the request regarding the assessment of the legality of the VAT assessments identified in the file, relating to the year 2014, the fundamental question to be decided is whether they suffer from the illegality that is attributed to them by the Claimant.
6.5. In fact, within the scope of an inspection procedure, which began on 24/11/2016, relating to the year 2014, the following situations were identified, in respect of VAT:
6.5.1. Document number duplication – in this context, they verified that there were a discrepancy, in all months of the year 2014, between the amounts in the SAF-T submitted by the Claimant and the monthly amounts communicated by it through the e-Invoice;
6.5.2. e-Invoice versus SAF-T – in this context, the SIT verified that the amounts of the VAT tax bases declared in the corresponding quarterly periodic declarations did not correspond to the amounts extracted, either from the e-Invoice application, or to the amounts recorded in the invoicing SAF-T files.
Also regarding the turnover declared in the IES/DA, in the model 22 declaration and in the analytical trial balance of 2014, although these had the same value, they did not have the same correspondence with the amounts extracted, either from the e-Invoice, or from the SAF-T.
6.6. Thus, the SIT concluded that EUR 100,220.91, as a tax base, and EUR 22,836.04, as assessed VAT (amounts calculated by the difference between the amounts of VAT assessed, per quarter, recorded in the invoicing SAF-T files and the VAT assessed quarterly declared in the respective periodic declarations of the year 2014), were not declared in the referred periodic VAT declarations, and constitute omissions to income subject to VAT.
6.7. The Claimant, both in respect of prior hearing, and in respect of the arbitral request, came to defend that it has "implemented clear management procedures (…) which aim, in particular, to invoice and return pastry and bakery products that remain daily, with restrictions on the profile of use of employees", understanding that "(…) there is no foundation for the assessments issued for lack of VAT, in the financial year 2014 (…)".
6.8. Notwithstanding the fact that it is crucial to analyze the position sustained by each of the Parties and determine which one is right, it is necessary to analyze, first, the legal framework associated with the tax obligations at issue in the context of the RIT and which gave rise to the VAT assessments.
Legal framework SAF-T file (PT)
6.9. Order no. 321-A/2007, of 26 March (in the version in force at the date of the facts underlying the arbitral request), created the obligation for accounting and invoicing systems to be equipped with mechanisms that would enable the creation of a standardized file containing a predefined set of data, in a readable and common format, independent of the source of the system that produced it, designated as SAF-T (PT) (Standard Audit File for Tax Purposes).
6.10. Within that Order it is stated that (i) given that "companies increasingly use electronic data processing systems to record patrimonial facts, in particular for invoicing" and (ii) given that "these records are subject to verification by inspection services within their competence to control the tax situation of taxpayers", and also "with a view to facilitating such task (…), the creation of a standardized file has been advocated (…) with the objective of enabling an easy export, at any time, of a predefined set of accounting records, in a readable and common format, independent of the program used, without affecting the internal structure of the program database or its functionality" (emphasis ours).
6.11. Thus, "the adoption of this model provides companies with a tool that allows them to meet the requirements for obtaining information from inspection services and facilitates its treatment (…), simplifying procedures and promoting the use of new technologies", and so "in a phased manner and starting with invoicing and accounting applications, the adoption of this standardized model of data export becomes mandatory" (emphasis ours).
6.12. In accordance with the provisions of article 1 of the said Order, "those subject to IRC who exercise, as their main activity, a commercial, industrial or agricultural activity and who organize their accounts using computer means are obliged to produce a file (…), whenever requested by inspection services (…)", with, in accordance with article 2, "the file must cover the information contained in the invoicing and accounting systems" (emphasis ours).
6.13. With regard to its temporal application, the foregoing "applies, with respect to invoicing systems, to operations carried out from 1 January 2008 onwards and, with respect to accounting systems, to records corresponding to financial years 2008 and following".
6.14. However, "the growing use of electronic data processing systems, in particular for invoicing of transmission of goods or provision of services (…)" although bringing "(…) undeniable advantages in terms of speed of information processing" also introduces "(…) new risks in terms of tax control, due to the possibility of subsequent alteration of the data recorded, fostering situations of tax evasion" (emphasis ours).
6.15. And thus, in this perspective, the legislator sought to "define rules for invoicing programs to observe requirements that guarantee the inviolability of the information initially recorded, thus allowing that only programs that comply with such requirements can be used, after certification (…)" by the AT.
6.16. In these terms, "with Order no. 363/2010, of 23 June, the rules that invoicing programs must observe in order to guarantee the inviolability of information were defined, defining, consequently, that only programs that respect the requirements stated therein can be used, after certification by the AT" (emphasis ours).[8]
6.17. With regard to the requirements for certification of invoicing programs, it was referred to in the identified Order that such certification depended on the cumulative verification of the following requirements:
"a) Have the possibility to export the file referred to in Order no. 321-A/2007, of 26 March [SAF-T file];
b) Possess a system that allows identifying the recording of the invoice register or equivalent documents and sales receipts, through an asymmetric encryption algorithm and a private key of exclusive knowledge of the program producer.
c) Possess a control of access to the computer system, requiring authentication of each user;
d) Not have any function that, locally or remotely, allows altering, directly or indirectly, the information of a tax nature, without generating evidence aggregated to the original information" (emphasis).
6.18. The use of certified programs, in accordance with the provisions of the said order, is mandatory, from 1 January 2011, for taxpayers that, in the previous year, had a turnover exceeding EUR 250,000 and, from 1 January 2012, for taxpayers that, in the previous year, had a turnover exceeding EUR 150,000.
6.19. The guarantee of the quality of the SAF-T (PT) files produced by computer invoicing programs (provided by the certification of invoicing software), made it possible to develop a set of other realities, in particular, the communication of invoice elements and transport documents to the e-invoice system.
Tax obligations regarding VAT
6.20. In this context, article 2, no. 1, subparagraph a) of the VAT Code refers that those subject to the tax are, among others listed therein, "persons (…) who, in an independent manner and with the character of habituality, exercise activities of production, commerce or provision of services (…)".
6.21. In accordance with the provisions of article 29, no. 1 of the VAT Code, "in addition to the obligation to pay the tax, taxpayers (…) must (…)" among other obligations and without prejudice to what is provided for in special provisions:
"(…)
b) Mandatorily issue an invoice for each transmission of goods or provision of services (…), as well as for payments made to them before the date of transmission of goods or provision of services";
c) Submit a monthly statement relating to operations carried out in the exercise of their activity during the second preceding month, with the indication of the tax owed or the existing credit and the elements that served as the basis for its calculation;
d) Deliver a declaration of accounting and fiscal information and attachments (…) relating to operations carried out in the previous year, which form an integral part of the annual declaration (…);
(…)
g) Maintain accounts adequate to the calculation and inspection of the tax;
(…)" (emphasis ours).
6.22. Thus, and with regard to invoice issuance, article 36, no. 1, subparagraph c) of the VAT Code provides, to the extent relevant to the case, that they must be issued on the date of receipt, in the case where payment coincides with the moment at which the tax is owed in accordance with article 7, no. 1 of the VAT Code, that is, at the moment when goods are placed at the disposal of the purchaser, in the case of transmissions of goods, and at the moment of their realization, in the case of provision of services [subparagraphs a) and b)].
6.23. In accordance with the provisions of article 36, nos. 4 and 5 of the VAT Code, invoices must be dated, numbered sequentially, issued in duplicate and contain, in particular, the identification of the supplier of goods or provider of services and the recipient or purchaser, the quantity and usual denomination of the goods transmitted or services rendered, the price, net of tax, and the other elements included in the taxable value, the applicable rates and the amount of tax owed, the date on which goods were placed at the disposal of the purchaser, on which services were carried out or on which payments prior to the realization of the operations were made (if that date does not coincide with that of invoice issuance).[9]
6.24. In the case where the operation(s) to which the invoice relates comprise goods or services subject to different tax rates, certain items must be indicated separately, according to the applicable rate.
6.25. In invoices processed through computer systems, all mandatory mentions must be inserted by the respective computer program or invoicing equipment, except when the purchaser or recipient was not a taxpayer, regarding invoices of value less than EUR 1,000, unless the purchaser or recipient requests that the invoice contain these elements, in which case this indication will always be mandatory.
6.26. In accordance with the provisions of no. 7 of the referred article 29 of the VAT Code, "when the taxable value of an operation or the corresponding tax is altered for any reason, including inaccuracy, a corrective invoice document must be issued" (emphasis ours).
6.27. In these terms, invoices are replaced by return guides or credit notes or other documents (also issued in duplicate), when it is a matter of returns of merchandise (or cancellation of services) previously transacted/rendered between the same persons.
6.28. Return guides or credit notes and other invoice correction documents must contain, in addition to the date and sequential numbering, the identification of the supplier of goods or provider of services and the recipient or purchaser, as well as the reference to the invoice to which they relate and the mentions thereof that are subject to alteration.
6.29. On the other hand, in accordance with the provisions of article 44 of the VAT Code, "the accounts must be organized in such a way as to enable clear and unequivocal knowledge of the elements necessary to calculate the tax, as well as to enable its control, comprising all the data necessary to complete the periodic tax declaration" (emphasis ours).
6.30. For this purpose, "(…) must be subject to registration, in particular, the transmissions of goods and provision of services carried out by the taxpayer (…)" and "(…) the transmissions of goods and provision of services carried out to the taxpayer within the scope of its business activity" (emphasis ours).
6.31. Now, in accordance with the provisions of no. 3
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