Summary
Full Decision
ARBITRAL DECISION
The arbitrators, Advisor Maria Fernanda dos Santos Maçãs (arbitrator-president), Marisa Almeida Araújo and Marcolino Pisão Pedreiro (arbitrators members), designated by the Ethics Council of the Administrative Arbitration Centre (CAAD) to form this Arbitral Tribunal, hereby decide as follows:
I – Report
1. A..., S.A., hereinafter referred to as the "Applicant", a commercial joint-stock company with registered office at Rua ..., n.º..., ..., holder of the Single Number of Legal Person and registered in the Commercial Registry Office..., requests the constitution of an arbitral tribunal on 05/11/2018, pursuant to the provisions of articles 2.º, no. 1, paragraph a), and 10.º of Decree-Law no. 10/2011, of 20 January, to assess the legality of additional Value Added Tax (VAT) assessments nos...., ...., ...., ...., ...., ...., ...., ...., ...., .... and ... all of 25 October 2017, as well as the additional VAT assessment no. ... of 27 October 2017, in the VAT assessment statements nos 2017... and 2017..., both of 25 October 2017, and 2017..., of 30 October 2017, and in the account adjustment statements nos 2017..., of 27 October, 2017..., of 31 October, and 2017..., of 2 November, requesting the annulment of the tax acts and the decision of implicit rejection of the administrative complaint, with the appropriate legal consequences.
It bases its request on the following grounds:
- The Applicant is a Portuguese joint-stock company that forms part of the B... group, and which is engaged in the operation and management of more than 20 hotels in Portugal under the brands ..., ..., ... and ..., being registered under the main Economic Activity Code (CAE) 55111 – hotels with restaurant – and under the secondary CAE 55112 – guesthouses with restaurant.
- For VAT purposes, the Applicant is subject to the normal monthly VAT regime and, with regard to the periods of the years 2013 and 2014, divergences were identified by the Tax Authority between the information contained in the SAF-T system and the information contained in the periodic declarations submitted by the Applicant, the Tax Authority ("TA" or "Respondent", hereinafter) having sent requests for clarification and requests for rectification of the periodic declarations filed in those years.
- The Applicant alleges that the divergences, according to its conclusions, stem from three distinct situations, namely: Errors in the SAF-T files of internal documents, which was being corrected; Procedure for reporting in periodic declarations of the value of VAT of credit notes in the fields of VAT charged; and Procedure for calculating VAT on the basis of the daily sales journal, and not on the basis of the date of invoice issuance.
- The TA initiated a partial internal inspection procedure and concluded that there was VAT outstanding in the following terms: € 499,388.22 in the periods of 2013 and € 343,849.61 in the periods of 2014.
- The Applicant alleges, as set out in paragraph c), that the method of calculating VAT on the basis of daily sales, duly approved by the TA in its Circular Letter no. 102697, of 4 June 1991 and which was only revoked on 05/12/2017, partially gave rise to discrepancies.
- And, on the other hand, the specifics of the activity to which it is engaged which, in addition to accommodation, provides clients with a wide range of other services, including food and beverage, and the respective IT systems it uses (and already used at that time), despite being duly certified, gave rise to "errors".
- These "errors", as regards food and beverage, the restaurant recorded the acquisition of the meal accounting-wise, which the client did not pay and which was subsequently "sent" to the "front-office" system which, by issuing an aggregated invoice, this transaction was actually invoiced and settled at the hotel reception at the moment of check-out.
- Creating the appearance, incorrectly according to the Applicant, that more VAT was charged than that which was actually charged by the hotel.
- The IT systems were corrected in 2014 and, in the year 2018, the Applicant submitted, after authorization from the TA, new SAF-T files relating to those tax periods in which the alleged divergences are corrected.
- In this way, the Applicant understands that the VAT charged, in accordance with the periodic declarations corresponding to the tax periods in question, are correct, thus disagreeing with the conclusions of the TA set out in the inspection report and, consequently, the tax acts issued.
- On 6 April 2018 the Applicant filed the respective administrative complaint which has not, to date, received an express decision. Having, on 5 November 2018, submitted the present request for arbitral decision.
2. The TA responded, on 19 February 2019, and attached the Administrative File (PA), concluding in favour of the dismissal of the arbitral request, arguing, in summary, that:
a) The TA established, as it alleges, that the VAT charged in the invoices communicated by the SAF-T files was higher than the tax contained in the VAT periodic declarations relating to the tax period indicated.
b) In light of the divergences noted, several automatic email messages were sent to the Applicant, successively inviting it to present substitute periodic declarations and/or to provide the necessary clarifications to justify the divergences identified.
c) The Applicant had difficulty in justifying and proving the divergences detected, upon assessment for correct application of the rules contained in the office no...., of the SIVA, and, considering the multiplicity of transactions involved, the Tax Assessment (DI) 2015... was issued, with the action closed on 19.12.2016.
d) According to the Respondent, pursuant to the DI 2015..., the divergences were identified which permitted the projection of the technical corrections contained in the administrative file and which gave rise to the additional assessments in question in the proceedings.
e) According to the Respondent, the Applicant in the context of the DI 2015... did not present sufficient evidence for the justifications offered.
f) The Applicant did not take steps, according to the Respondent's position, to justify and prove to the TA the divergences that occurred from 2013 to October 2014, thereby neglecting its duties of cooperation and only in 2017 did the Applicant contract the services of a consultant.
g) And only in 2017 did the Applicant take steps, according to the Respondent, to resolve those divergences and only in 2018 to replace those SAF-T files, the TA concluding that the Applicant neglected its duties of cooperation, and even these were only submitted after the termination of the inspection action which resulted in the disputed assessments, and the replacement of the SAF-T Files is also subsequent to the submission of the administrative complaint.
h) The Applicant, according to the Respondent, continues without justifying these divergences, which gave rise to the assessments issued, in a full and unequivocal manner, presenting, for example, elements that strictly would allow the identification and assessment of the monthly divergences identified, based on accounting elements.
i) The Respondent sustains the dismissal of the arbitral request.
3. Following the proceedings, a meeting as referred to in article 18.º of the RJAT was scheduled, which took place on 7 May 2019 at 10:00 where the witness Susana Caetano was heard, duly identified in the record of the witness examination meeting.
The Applicant waived the examination of the other witnesses listed, as did the Respondent as regards the witness indicated by it, it being ordered, in accordance with the respective order, that proceedings continue for submissions in successive periods.
The Applicant and Respondent submitted arguments maintaining, in essence, their positions already set out in their respective procedural pleadings.
4. The request for constitution of the arbitral tribunal was accepted by the President of the CAAD and notified to the Tax and Customs Authority in accordance with the applicable regulations.
In accordance with the provisions of paragraph a) of no. 2 of article 6.º and paragraph b) of no. 1 of article 11.º of the RJAT, as amended by article 228.° of Law no. 66-B/2012, of 31 December, the Ethics Council designated as arbitrators those who have signed, who communicated their acceptance of the task within the applicable period.
The parties were timely and duly notified of this designation and did not manifest a wish to reject it, in accordance with the combined provisions of article 11.º, no. 1, paragraphs a) and b), of the RJAT and articles 6.° and 7.º of the Code of Ethics.
Thus, in accordance with the provision contained in paragraph c) of no. 1 of article 11.º of the RJAT, as amended by article 228.° of Law no. 66-B/2012, of 31 December, the singular arbitral tribunal was constituted on 20 December 2018.
The arbitral tribunal was regularly constituted and is materially competent in accordance with the provision in articles 2.º, no. 1, paragraph a), and 30.º, no. 1, of Decree-Law no. 10/2011, of 20 January.
The parties have legal personality and capacity, are legitimate and are represented (articles 4.º and 10.º, no. 2, of the same statute and 1.º of Order no. 112-A/2011, of 22 March).
In accordance with article 104.º of the Code of Tax Procedure (CPPT), by reference to article 29.º, no. 1, paragraph a) of the RJAT, within the scope of arbitral proceedings, claims may be cumulated provided that there is identity of the nature of the taxes, the factual and legal grounds invoked and the tribunal competent for the decision.
In the case sub judice, the matter is related to the same tax, VAT; the Applicant invokes the same factual and legal grounds in relation to the assessments in question and the tribunal is competent since the case relates to the declaration of illegality of acts of official tax assessment, in accordance with article 2.º, no. 1, paragraph a) of the RJAT and 2.º, paragraph a) of Order no. 112-A/2011, of 22 March.
Thus, the cumulation of claims is admitted.
The proceedings do not suffer from any defects and no exceptions were invoked.
It falls to be assessed and decided.
II - Grounds
Matter of Fact
5. It falls to the tribunal to select the facts that are relevant to the decision of the case and to distinguish proven from unproven facts (in accordance with article 123.º, no. 2, of the CPPT and article 607.º, no. 3 of the Code of Civil Procedure (CPC), applicable by reference to article 29.º, no. 1, paragraphs a) and e), of the RJAT).
In this way, the facts relevant to the judgment of the case are chosen and determined in light of their legal relevance, which is established having regard to the various plausible solutions to the legal question(s) (in accordance with the former article 511.º, no. 1, of the CPC, corresponding to the current article 596.º, applicable by reference to article 29.º, no. 1, paragraph e), of the RJAT).
The following facts have been deemed proven, with relevance to the decision:
- The Applicant is a Portuguese joint-stock company that forms part of the B... group, and which is engaged in the operation and management of more than 20 hotels in Portugal under the brands..., ..., ... and ..., being registered under the main Economic Activity Code (CAE) 55111 – hotels with restaurant – and under the secondary CAE 55112 – guesthouses with restaurant.
- For VAT purposes, the Applicant is subject to the normal monthly VAT regime.
- The Applicant provides various services within the scope of its activity, in addition to accommodation service, including the sale of beverages, meals, as well as the rental of spaces and catering service, parking of motor vehicles, laundry services, subject to different VAT rates.
- During the tax period to which the facts relate, the Applicant recorded the acquisition of the meal, issued an internal document for the transfer of the service provided or of the good sold to the hotel front-office (reception) and at the moment of check-out, the accommodation services and the other services provided and goods transacted were determined/settled and, consequently, invoiced by the Applicant through its hotel front-office (reception) through an invoice, with only this one issued by the hotel reception reaching the possession of the client.
- In error, which persisted until the end of 2014, the system issued as an invoice the internal document of transfer of the service provided or of the good sold to the front-office (reception) of the hotel but, by considering as an invoice that internal document, it communicated to the TA, through the SAF-T, those services provided or goods transacted as autonomous.
- The Applicant's accounts department prepared the VAT periodic declarations based on the invoices actually issued.
- The Applicant adopted, during the period to which the facts relate, as a method of calculating VAT, the daily sales journal.
- This method was approved by the TA in its Circular Letter no. 102697, of 4 June 1991 and remained in force until 5 December 2017.
- The Applicant was informally informed by the TA that there were divergences between the data submitted through the SAF-T and the amounts recorded in the periodic declarations of the periods 2014/03T and 2014/06T but this made no mention of the value in divergence, whereby the Applicant assumed that the discrepancies were solely related to the method of calculating VAT based on the actual and daily occupancy of the hotel.
- As a result of an inspection action, the TA concluded that there was VAT outstanding in the following terms:
· EUR 499,388.22 in the periods of 2013; and
· EUR 343,849.61 in the periods of 2014.
- The VAT assessments received by the Applicant are related to the divergences that the TA identified for the periods of July and August 2014.
- The Applicant made payment and filed an administrative complaint against the tax acts.
- The Tax Inspection Services of the Respondent did not analyze the invoices, nor the accounting statements of the Applicant.
- In 2018 the Applicant submitted to the Respondent the replacement of the SAF-T files, based on the invoices actually issued, in accordance with the VAT declarations it had submitted.
- The TA validated the replacement of the SAF-T files.
- The new SAF-T files presented no divergences upon submission.
- The Applicant used (and uses) two IT systems, both foreign and from different suppliers.
- The identification of all files of both programs depended on the services of foreign companies to collect all the files, make the link of each document in each of the files and the link between both, in addition to the joint analysis of the information.
- Given the large number of documents the analysis was difficult and time-consuming.
- An audit was carried out and all files were analyzed (and also documents based on sampling) and it was concluded with a margin of error of 1%.
There are no facts deemed unproven with relevance to the case.
The Tribunal formed its conviction as to the proven facts based on the documents attached to the petition and on the administrative file attached by the Tax Authority with the response and the witness examined at the meeting.
As to the subject matter on which the witness was indicated, it was also relevant for forming the Tribunal's conviction, the witness listed by the Applicant, a tax consultant, who demonstrated deep knowledge of the situation sub judice.
In fact, with regard to the temporal gap to which the tax facts relate – years 2013 and 2014 – the witness has no personal or direct knowledge since she came into contact with the Applicant only after it had received the additional assessments in question in these proceedings and with the purpose of auditing the company to clarify the situation that triggered those assessments.
As to this matter and in relation to which the witness has personal and direct knowledge, which proves to be essential, the witness, as stated, presented a deep knowledge of the case – which she verified in an audit of the Applicant – which led to the additional assessments and which constitute the Applicant's justification for the discrepancies identified.
According to the witness's explanation, which the tribunal considered and valued to form its conviction, within the scope of the activity to which the Applicant is engaged – the hotel sector – there was admissibility, until 2018, to calculate and present VAT declarations in accordance with the so-called "daily sales" rather than invoices. This admissibility, which was later revoked in 2018 as the witness explained, was contained in a letter from the TA and which the sector applied, although the so-called SAF-T system was already implemented.
This situation leads to the Applicant – and other companies in the sector – calculating and declaring VAT, which they submitted in that system in accordance with a rule – which the TA itself admitted – distinct, leading to the Applicant, when notified of discrepancies, relativizing the situation believing that they were caused by this form of calculating VAT based on "daily sales", that is, they calculated VAT in accordance with daily consumption taking into account the TA's own guidance for the sector even though different from what the SAF-T system considered (VAT on invoices).
According to the witness, the temporal gap that the Applicant took to react to the notifications was due to the situation described, which had the consequence that the duties of diligence incumbent upon taxpayers in general were delayed in this specific case – although justified by a situation that the TA itself admitted as to the calculation of VAT.
Furthermore, and once the Applicant realized that the discrepancy was not (only) from this situation it then deployed the means at its disposal to identify the situation and correct it.
The cause that led to the additional assessments was related to the fact that the Applicant worked with two IT systems, one internal to the B... group and one external. Both foreign systems used by the Applicant. One of them was used for meals and the other in the so-called "front-office".
The system used for meals issued a document – which wrongly classified as "invoice" – which was communicated to the "front-office" system which aggregated the services provided to the client, including meals, and issued the invoice for the client to pay.
What happened was that when this aggregated invoice was issued the internal system had already – wrongly, since the document was not for the client, nor for the client to pay – issued an "invoice", thereby duplicating the VAT amount payable although, in fact, only the VAT from the invoice issued by the "front-office" was due.
Thereby duplicating – although wrongly and, therefore, not owed – the VAT on meals which the SAF-T system, by assuming both invoices referred to, considered.
Indeed, even after the problem was identified, hotel companies holding programs similar to the Applicant's, which had similar problems, had to make changes to adapt them and avoid the duplication described – despite being certified programs – and adapt to the Portuguese reality which rigorously implemented the SAF-T system.
In the course of the audit it conducted, the witness determined that what led to the additional assessments was exactly the situation described and that only from the end of 2014 onwards was the duplication of accounting documents – invoices – that accounted for VAT for the same service corrected. Now the meal system issues a mere internal document and there has been, since then, any other discrepancy, with the problem resolved.
The witness validated all the IT files – more than 800 (approximately 26 hotels are involved) – and also performed a validation, by audit sampling, of the documents (approximately 5000 for each file) concluding only with the existence of a margin of error of 1% (in favor of the TA).
In light of the witness's explanation, coherent, without reservations, with knowledge of the facts, having analyzed all the files in question and identified that the discrepancy as to VAT – and which led to the additional assessments in question – was, in addition to the accounting of VAT based on daily consumption, duplication of VAT on the same service "meals", the tribunal valued it to form its conviction as to the facts deemed proven.
Matter of Law
6. Assessment of the issues raised by the Applicant
At issue is, first and foremost, to ascertain whether, in the concrete situation, it is possible to admit that the Respondent bases the additional assessments through a method of comparison between the declaration presented by the taxpayer and the information contained in the SAF-T.
In the concrete case, the Applicant presents two distinct explanations for the divergences verified.
On the one hand, for the sector of activity of the Applicant – hotel industry – the TA, through the aforementioned letter, allowed (and the SAF-T system was already in force) that VAT declarations be presented in accordance with "daily sales" and not in accordance with invoices, which led to the fact that, monthly, the VAT declared and invoiced would be different. This situation persisted until 2018.
Although this situation does not explain all the discrepancies noted between the VAT declared and contained in the invoicing and which is considered by the SAF-T system, the truth is that, in addition to leading to discrepancies – although without this being able to lead to the conclusion that the declarations presented by the Applicant were wrong – this "parallel system", accepted by the TA itself, led to the Applicant "disregarding" for some time, possibly more than that which would be, in a context of normality, required of it, the "notices" from the TA as to the existence of "errors" in the SAF-T.
Any taxpayer, warned or notified of a discrepancy, should have immediately undertaken the performance of the duties of diligence to which it is bound in order to identify the cause of the discrepancies and correct them. But in this case, the fact that that system of calculating VAT was accepted led to the taxpayer, in casu, the Applicant, without another element that would allow concluding that the discrepancy had also another cause, to omit those duties. In these circumstances, it appears not to be reasonable to attribute to the taxpayer a judgment of relevant censure for the omission in question. In fact, as soon as it realized that the cause was also another, it immediately took steps with the suppliers of the IT systems it uses, in a chain of more than 200 hotels, to resolve the problem.
A problem which, as is concluded, arose from the simultaneous use of two IT systems, one of which, used for meals, when it issued a document – which was called an "invoice" – to be aggregated in the customer's invoice by the "front-office" system generated, in that first document, VAT which, subsequently, the other system, in the proper invoice, generated again, with only this one actually being charged to the customer, because only this one was owed.
There was, thus, a duplication of VAT with regard to beverage and meal services.
After much insistence and work – the foreign suppliers were confronted with this situation, created by the exceptional requirements of the Portuguese tax regime with the integration of SAF-T, for the first time and, requiring investment in programming, they ended up resolving it at the end of 2014.
Already in 2017, when the Applicant was notified of the additional assessments corresponding to the periods of 2013 and 2014, it had to, given the enormous volume of information, which is contained in distinct IT systems, obtain from the suppliers files with the comparison of the documents issued by each one to be able to aggregate, in a comparative manner, the information between both to make the correspondence between the documents issued by both programs. However, since the obtaining of that information was dependent on the cooperation of third parties, foreign ones, its collection was time-consuming, although without cause that can be attributed to it since the Applicant did not depend on itself to obtain the information.
In any case, the aforementioned files were obtained and, as proven, all those that gave rise to the discrepancies were verified, with a margin of error of 1%, and the supporting documents were also verified, by sampling.
Herculean work but necessary and which was, from the outset, the responsibility of the Respondent which did not do it, as it admits, having verified no file or document.
For this Tribunal the issue resides exactly at this point.
The inquisitorial principle enshrined in article 58.º of the General Tax Law (LGT) establishes that the TA should undertake such steps as it considers convenient for the discovery of the material truth. As extracted from judgment 06418/13 of 07/05/2013 of the Central Administrative Court South "the inquisitorial principle is justified by the obligation to pursue the public interest imposed on the activity of the Tax Authority (art. 266, no. 1 of the Constitution and art. 55.º of the LGT) and is the corollary of the duty of impartiality that should guide its activity (art. 266.º, no. 2 of the Constitution and art. 55.º of the LGT).
This duty, continuing in the wake of that decision, requires that the TA seek to bring to the proceedings all evidence relating to the situation on which it will base its decision, imposing upon it the obligation to undertake all necessary steps to discover the material truth, even if not required, and that "(...) within the scope of the inspection procedure, seek to collect the evidentiary elements that will enable it later to substantiate the tax act that may be practiced. This is about investigating and determining the correct performance of tax obligations by taxpayers and, based on that investigation, collecting elements that make it possible to determine the possible existence of irregularities".
It is not overlooked that, in accordance with paragraph g) of no. 1 of article 29.º, in conjunction with article 44.º, both of the VAT Code (CIVA), the burden rests on taxpayers to have accounting appropriate to the determination and inspection of the tax, which should be organized in a way that enables clear and unequivocal knowledge of the elements necessary for the calculation of the tax, as well as to permit its control, containing all the data necessary for the completion of the periodic declaration.
However, one cannot impose on the taxpayer, in casu, the performance of that burden without taking care to know the concrete specifics that involved the sector of activity of the Applicant. As was proven, the method of calculating VAT of the daily sales journal was not only admitted but approved by the TA, in its Circular Letter no. 102697, of 4 June 1991, and remained in force until 5 December 2017.
Thus, and in accordance with the TA's own acquiescence, VAT was accounted for in a manner different from that legally provided.
It is this specific context, which cannot fail to be taken into account in the weighing between the performance of that burden incumbent on the Applicant, on the one hand, and the requirements of the inquisitorial principle, which rested on the Respondent, on the other.
In this way, and as the judgment concludes, the principle of discovery of the material truth establishes what should be the objective that should guide the inspection procedure.
In this case, the Respondent, in fact, did not give any effect to this principle, corollary of the inquisitorial principle, having not analyzed any documentary element or undertaken any investigative steps. The work was difficult and time-consuming, we have no doubt, but, unlike the Respondent's stance, the Applicant undertook it and from the elements collected and which the tribunal deemed proven, the position it upholds is the one that corresponds to reality.
The fact that invoices were issued – as they were in fact – does not mean that the corresponding transactions were carried out, as the Applicant ultimately demonstrated.
It can still be questioned whether it would not be reasonable to consider the existence of the aforementioned discrepancy sufficient. In fact, the SAF-T system is an essential tool in tax inspection, but the verification of divergences does not constitute grounds for a tax assessment, nor does it relieve the TA of the burden of proving the assumptions of tax incidence.
The fact that the divergence may be relevant for triggering the inspection does not imply that it can be considered entirely sufficient to remove the burden of proof incumbent on the Respondent, which had the duty to collect elements that the operations contained in the Applicant's accounts and reported in its VAT declarations did not correspond to reality.
It was upon the TA that the burden of proof lay as to the actual existence of operations on which undeclared VAT was incurred by the Applicant. However, the Respondent neither proved nor undertook any evidentiary steps in that direction, including external inspection action (external), prior to the issuance of the assessment acts, to analyze the elements thereof. No divergences were identified other than those resulting from the submission by the Applicant itself of the SAF-T files.
The argument, as mentioned, that the Applicant did not comply with the burden of having organized accounting does not hold. In fact, the Applicant had its accounting organized in accordance with the TA's own guidelines, which cannot now, with the same, impose added duties of conduct on the Applicant, in particular to exempt itself from compliance with the inquisitorial principle, in accordance with the matter touched upon above.
It would, moreover, be contrary to the requirements inherent to the principles of good faith and protection of legitimate expectations to admit that the Respondent could shield itself with the argument that the taxpayer must have correct accounting records when, in the concrete case, the Applicant acted in accordance with the practice established by the TA itself. A practice which was not only known to the TA but was guided by it and which was only altered in 2017.
In this way, in light of the Respondent's omission, the presumption is not excluded that the Applicant's VAT declarations benefit from such presumption, the determination of VAT charged cannot be replaced by the SAF-T file, due to lack of legal support.
Moreover, and to the contrary, from the steps undertaken by the Applicant it is demonstrated exactly the veracity of the VAT declarations in the manner referred to.
In this way, it is concluded that the additional VAT assessment acts in question in these proceedings are illegal and should, consequently, be annulled.
Given the merits decision, the examination of the other issues raised is prejudiced, as being superfluous [art. 130º of the Code of Civil Procedure (CPC)].
Finally, the Applicant requests the refund of the overpaid tax and respective indemnity interest.
As extracted from decision no. 280/2018-T (at www.caad.org.pt), and in accordance with the position followed, it was "(…) demonstrated that the tax acts suffer from errors of fact and law that are attributable to the TA which could not have proceeded to the assessment of VAT based on mere comparison of the SAF-T files with the VAT periodic declarations". In this way, and as stated, it is clear from the proceedings that the illegality of the impugned tax assessment acts is directly attributable to the Respondent.
Given this, the substantive regime of the right to indemnity interest is regulated by article 43.º of the LGT, which establishes, in what is relevant here:
Article 43.º
Overpayment of Tax Obligation
1 – Indemnity interest is owed when it is determined, in administrative complaint or judicial impugnation, that there was error attributable to the services which resulted in payment of the tax debt in an amount higher than that legally owed.
2 – It is also considered that there is error attributable to the services in cases where, although the assessment is made on the basis of the taxpayer's declaration, the latter followed, in its completion, the generic guidelines of the tax authority, duly published. (underlined).
The error in the assessments is, thus, attributable to the TA, in accordance with the terms provided in no. 2 of this article, as the administrative guidelines issued by the Respondent were followed by the Applicant, contained in its Circular Letter no. 102697, of 4 June 1991.
The Respondent did not demonstrate the incidence of the tax nor did it make the assessments on the basis of the taxpayer's declaration, in accordance with articles 29.º, no. 1, paragraph c) and 41.º of the CIVA. The TA made use of a tool (SAF-T) which is an auxiliary means of inspection but which does not reverse any burden on the TA, particularly those arising from the inquisitorial principle in accordance with the above-mentioned terms.
Consequently, the Applicant is entitled to receive indemnity interest, in accordance with the terms provided in articles 43.º, no. 1, of the LGT and 61.º of the CPPT.
The indemnity interest should be paid to the Applicant from the date on which it made the respective payment of the tax in question in these proceedings until the full reimbursement of the amount paid, at the legal rate.
III – Decision
1. Accordingly, the arbitral request is adjudged entirely well-founded and, consequently, the annulment is determined of the additional VAT assessments and of the decision of rejection of the administrative complaint, with the legal consequences;
2. The Respondent is condemned to payment of indemnity interest calculated on the amount of tax overpaid until the respective reimbursement;
3. The Respondent is condemned to payment of costs.
IV - Value of the Claim
The Applicant indicated as the value of the claim the amount of € 843,237.83, which was not contested by the Respondent and corresponds to the value of the assessments, whereby the value of the claim is fixed at that amount.
V - Costs
In accordance with articles 12.º, no. 2, and 24.º, no. 4, of the RJAT, and 3.º, no. 2, of the Regulation of Costs in Tax Arbitration Proceedings and Table I annexed to that Regulation, the amount of costs is fixed at €11,934.00 to be borne by the Respondent.
Notify.
Lisbon, 16 July 2019
The arbitrator-President
(Maria Fernanda dos Santos Maçãs)
The arbitrator member
(Marisa Almeida Araújo)
The arbitrator member
(Marcolino Pisão Pedreiro)
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