Process: 561/2017-T

Date: April 13, 2018

Tax Type: IVA

Source: Original CAAD Decision

Summary

This CAAD arbitral decision (Process 561/2017-T) addresses whether generic descriptions on invoices for legal and tax consultancy services satisfy formal requirements for VAT deduction under Portuguese law. The claimant company sought to deduct €119,833.33 in VAT from invoice no. 81/2009 issued by a law firm, describing services as 'legal services and tax advisory services' covering work performed between 2008-2009. The Tax Authority denied the deduction, arguing the invoice lacked sufficient detail required by Article 36(5)(f) of the Portuguese VAT Code and Article 226(7) of the EU VAT Directive. The claimant contended that the generic description was adequate to identify the operations with sufficient precision, consistent with common commercial practice and legislative terminology. They argued the Tax Authority failed to demonstrate how the allegedly insufficient description made verification of substantive deduction requirements impossible or excessively difficult, especially since supplementary information was available and the Authority accepted related expenses for Corporate Income Tax purposes. The tribunal examined whether formal invoice requirements under Portuguese and EU law necessitate detailed itemization of individual contracts, proceedings, and consultations, or whether generic professional service descriptions suffice when the nature, taxable status, and business purpose of services can be verified through available documentation.

Full Decision

ARBITRAL DECISION

The arbitrators José Baeta de Queiroz, Hélder Faustino and Jorge Carita, designated by the Deontological Council of CAAD to form the Arbitral Tribunal, agree as follows:

REPORT

  1. A A…, S.A. (hereinafter referred to in abbreviated form as "Claimant"), legal entity no. …, with registered office at Rua…, no. …, in …, having been notified of the dismissal order of the hierarchical appeal no. …2016…, filed against the additional assessment of Value Added Tax ("VAT") no. …, in the amount of € 119,833.33, relating to 09-2013, filed on 23-10-2017, under paragraph a), section 1 of Article 2 and paragraph a), section 1 of Article 10 of Decree-Law no. 10/2011 of 20 January (Legal Framework of Tax Arbitration, hereinafter "LFTA"), a request for arbitral pronouncement with a view to annulling that act.

  2. The Respondent is the Tax and Customs Authority (AT).

  3. The claim object of the request for arbitral pronouncement consists of the annulment of the dismissal order of the hierarchical appeal and of the additional VAT assessment no. …, along with condemnation of the AT to the refund of unduly paid tax and, likewise, to the payment of compensatory interest for the unduly paid tax act.

  4. The request for constitution of the Arbitral Tribunal was accepted by the President of CAAD and automatically notified to the AT.

4.1. The Claimant did not proceed with the appointment of an arbitrator, wherefore, under the terms of paragraph a), section 2 of Article 6 and paragraph b), section 1 of Article 11 of the LFTA, the President of the Deontological Council designated the arbitrators identified above to form the collective Arbitral Tribunal, who communicated acceptance of the appointment within the applicable period.

4.2. On 15-12-2017, the parties were notified of the designation of the arbitrators, and neither raised any impediment.

4.3. In accordance with the provisions of paragraph c), section 1 of Article 11 of the LFTA, the collective Arbitral Tribunal was constituted on 08-01-2018.

  1. In support of the request for arbitral pronouncement, the Claimant alleges, in summary, the following:

The wording contained in the invoice – legal services and tax advisory services – is in itself capable of identifying, with a considerable degree of precision, the operations performed, consistent not only with the technique used by the national legislator to identify this type of operation, but also with what is current practice in legal and commercial transactions.

The services are described with a degree of precision more than adequate and sufficient if we take into account their nature and the purposes of inspection and control that justify this obligation.

The Claimant considers that requiring the individual identification of contracts, administrative or judicial proceedings, restructuring operations, acts of legal consultation, as the AT wishes to validate the deduction of tax, goes beyond what is necessary and adequate to pursue the purpose for which the obligation was created.

On the other hand, paying attention to the treatment given by the AT to the expense with legal and tax advisory services in the context of Corporate Income Tax ("CIT"), which resulted not in a general prohibition of deduction – namely, because it had no relation to the business activity and did not pass the scrutiny of Article 23 of the CIT Code – but only in the refusal of deduction in the fiscal year 2013 – and not in all other fiscal years – by virtue of the principle of specialization of fiscal years.

Now, from the information supplementary to the invoice provided by the law firm and attached to the previous tax proceedings, the AT could confirm that the services provided were subject to VAT, that both the service provider and its purchaser were VAT-taxable persons, and that the services were related to the (taxable) activity carried out by its purchaser.

In conclusion, it was not minimally demonstrated by the AT, as was incumbent upon it, that the alleged insufficiency of the description as regards the requirement established by paragraph f), section 5 of Article 36 of the VAT Code (Article 226, section 7 of the VAT Directive) made impossible or, at least, excessively difficult the verification of the substantive requirements for the right to deduction.

  1. The AT presented its response, alleging, in summary, the following:

Invoice no. 81/2009, with the description "provision of legal services and tax advisory services", does not comply with the formal requirements provided in paragraphs 6) and 7) of Article 226 of the VAT Directive, and in paragraphs b) and f) of section 5 of Article 36 of the VAT Code, due to insufficiency or lack of mandatory elements of the invoice content.

Indeed, the Claimant did not demonstrate, within the scope of the inspection procedure, as required under Article 74, section 1 of the General Tax Law, the verification of the necessary conditions for the exercise of its right to deduction.

  1. As no request for evidence to be produced was made, it was decided to dispense with the meeting provided for in Article 18 of the LFTA, and 23-04-2018 was designated as the deadline for the pronouncement of the arbitral decision.

  2. The parties waived the submission of arguments.

PROCEDURAL MATTERS

9.1. The Arbitral Tribunal is competent and regularly constituted.

9.2. The parties have legal personality and capacity, show themselves to be legitimate and are regularly represented (Articles 4 and section 2 of Article 10 of the LFTA and Article 1 of Ordinance no. 112-A/2011 of 22 March).

9.3. The proceedings are not affected by nullities.

9.4. There are no other circumstances that prevent the examination of the merits of the case.

MERITS

III.1. Factual Matters

  1. Proven Facts

10.1. Facts that are relevant for the assessment and decision of the raised issues are taken as established and proven as follows:

The Claimant is a company whose corporate purpose is the construction, development and operation of tourist-real estate projects and, likewise, the construction of buildings, and holds interests in other companies primarily linked to hospitality and tourism promotion activities.

For VAT purposes, the Claimant is a taxable person classified under the normal monthly tax regime.

In the course of its activity, the Claimant acquired, under a continuous arrangement, legal services and tax advisory services from B…, R.L., which included, among others, advisory services in the preparation of property purchase and sale contracts, the preparation of contracts for the purchase and sale of shareholdings, sponsorship in judicial proceedings and administrative procedures, negotiation of bank refinancing operations, monitoring of business restructuring processes and legal and tax consultation.

The aforementioned law firm issued to the Claimant invoice no. 81/2009, dated 31-12-2009, for services provided between 2008 and 2009, in the amount of € 599,166.67, plus VAT – at the normal rate then in force of 20% – in the amount of € 119,833.33, totaling € 719,000.00, tax deducted by the Claimant in the periodic statement for 09-2013.

In the context of an external inspection action of general scope promoted by the Tax Inspection Services of the Finance Authority of … under service order OI2015…, which covered the 2013 tax period, the Claimant was notified of the respective Tax Inspection Report, which contains a correction in respect of VAT for 09-2013, in the amount of € 119,833.33, which is reflected in the additional assessment no. ….

On 17-03-2016, the Claimant filed a voluntary appeal (reclamação graciosa) against the identified additional VAT assessment, which was dismissed by an order dated 23-08-2016 issued by the Head of the Administrative Justice Division of the Finance Authority of ….

On 28-09-2016, the Claimant filed a hierarchical appeal against the decision dismissing the voluntary appeal, which was dismissed by an order from the Director of VAT Services dated 19-07-2017.

During the prior hearing on the inspection report, the Claimant presented an annex to the invoice in question drafted by B… in which it states:

"The legal services and tax advisory services that were provided all have the same VAT rate and all relate to the activity of A… and its subsidiaries.

They relate to the monitoring of all legal and tax matters of A… between 2008 and 2009, namely, in advisory services in the preparation and negotiation of the various property purchase and sale contracts, purchase and sale of shareholdings contracts, in participation in judicial proceedings and administrative procedures, in the negotiation of bank refinancing operations and in participation in multiple meetings relating to the most diverse matters concerning A… and its subsidiaries, including attendance at several meetings abroad, namely in Spain".

i) The AT continued to understand that "in the analysis of the elements described and the note to be attached to the identified invoice, there is no temporal discrimination of when the services were provided and what type of services were actually provided, using only general concepts, contrary to paragraph f) of section 5 of Article 36 of the VAT Code" General Rule of the VAT System, concluding that "with respect to the right to deduct tax, the formal requirements of invoices must be complied with under penalty of non-acceptance".

j) In the voluntary appeal, the Claimant attached a new document issued by the law firm stating that it was "a final settlement of accounts that was that which was agreed globally with A…, as a result of an accumulated balance of accounts of fees that were pending. Both from that year and from previous years".

k) It is noted in the same document that the legal services were provided "over several years", because "several of the proceedings [approximately three dozen, between judicial and administrative proceedings] dragged on over many years and some still exist today".

l) The AT considered that "this does not mean that the requirements mentioned in paragraphs b) and f) of section 5 of Article 36 of the VAT Code are met", and that Article 29, section 19 of the VAT Code stipulates that "Taxable persons are not permitted to issue and deliver documents of a nature different from an invoice to evidence the supply of goods or provision of services to their respective customers or recipients, under penalty of application of legally prescribed penalties", concluding that "both the invoice and the addendum presented by the claimant do not comply with the said conditions provided for in Article 226 of the VAT Directive, namely the extent and nature of the services provided and the date on which the provision of services was effected".

m) In the decision on the hierarchical appeal, it is stated that "it is incontestable that invoice no. 81/2009 (…) does not comply with the formal requirements exhaustively provided for in paragraphs 6) and 7) of Article 226 of the VAT Directive, and in paragraphs b) and f) of section 5 of Article 36 of the VAT Code, due to insufficiency or lack of mandatory elements of invoice content".

It is accepted that informational annexes may supplement the description of services contained in an invoice, as provided for in Article 219 of the VAT Directive, but the declaration issued by the law firm and attached in the inspection procedure is considered to "make no reference whatsoever to the invoice in question", in addition to using "generic concepts, such as 'various property purchase and sale contracts', 'participation in judicial and administrative proceedings', 'negotiation of operations', 'participation in multiple meetings', 'diverse matters', 'several meetings abroad'".

n) In the decision on the hierarchical appeal, the AT states, regarding the declaration issued by the law firm, that "vague and generic terms continue to be used", which "does not comply with the requirement of paragraph b) of section 5 of Article 36 of the VAT Code", and that "there remains the lack of response to the question of what services were actually provided, namely: Which property purchase and sale contracts? Which judicial and administrative proceedings? Which restructurings? Which legal and tax advisory services? (a term that already appears in the invoice)", and that the information in that declaration is not sufficiently "precise regarding the nature of the operations", it being "not possible to identify the respective quantity of services provided", nor a specific date, nor the billing period, thus constituting an omission of formalities preventing the "verification of the substantive assumptions of the right to deduct tax, provided for in Articles 19 and 20 of the VAT Code (…) which is why deduction cannot be granted".

o) The additionally assessed VAT was paid by offset in the tax current account made on 10 November 2015.

10.2. Substantiation of Factual Matters

The proven facts were based on documents attached to the request for arbitral pronouncement and in the administrative proceedings, with no controversy regarding them.

10.3. There are no other facts with relevance for examination of the merits of the case that have not been proven.

III.2. Legal Matters

The Respondent prevented the exercise of the right to deduct VAT in the amount of € 119,833.33, borne by the Claimant and contained in invoice no. 81/2009 of 31/12/2009, issued by B…, in the amount of € 599,166.67 which, plus VAT, amounts to € 719,000.00.

The description on the invoice is "Provision of legal services and tax advisory services".

The Respondent considered that "The description 'Provision of legal services and tax advisory services' is a broad concept of what was invoiced to B…. Indeed, as the requirements of paragraphs b) and f) of section 5 of Article 36 of the VAT Code are not met, it is not possible to determine:

Which services were actually provided and where;

At which moments they were provided so as to consequently validate the correct VAT rate;

The quantity and unit amount;

The connection to the company's activity bearing in mind that its main activity is the development and operation of tourist-real estate projects, building construction activities and it holds a large set of interests in other companies primarily linked to hospitality and tourism promotion activities. (…) Based on the foregoing, the tax deducted in the amount of 119,833.33 € and declared in field 24 (VAT deductible on other goods and services) of the periodic statement for September 2013 cannot be accepted for tax purposes, whereby that amount will be excluded from the said field" and "the deduction of tax deducted in the amount of 119,833.33 € is not accepted".

In this manner, the AT does not question the substantive prerequisites of the deduction of VAT borne by the Claimant – neither those relating to itself, as a taxable person, nor to the nature of the services acquired – but only the formal prerequisites: the description on the invoice is vague and insufficient, and does not indicate the date of provision of the invoiced services.

Let us boldly assert that the Respondent is correct regarding the non-compliance with legal requirements of the invoice that served as the basis for the deduction of tax by the Claimant and reversed by the AT.

The VAT Directive, in Article 226, requires that invoices must contain, mandatorily, among other things, "the extent and nature of the services provided", and "the date on which the service was provided or completed (…)".

Article 19, sections 2 subparagraph e) and 6 of the VAT Code limits the right to deduction to VAT mentioned in "invoices and documents issued in legal form", and, in accordance with section 5 of Article 36 of the statute, those are considered issued in legal form that contain, among other elements, "the quantity and usual name (…) of the services provided, with specification of the elements necessary for the determination of the applicable rate", as well as "the date (…) on which the services were performed".

Now, as the AT points out, the indication in the invoice that it relates to "provision of legal services and tax advisory services" is very broad, vague and insufficient to discern "Which services were actually provided and where", or "At which moments they were provided so as to consequently validate the correct VAT rate; The quantity and unit amount; The connection to the company's activity".

However, non-compliance (or deficient compliance, which, for the case, amounts to the same thing, since all invoice requirements are essential) with formal requirements relating to invoices does not have the inevitable consequence of their dismissal for purposes of the right to VAT refund.

In this regard, it is important to bear in mind that the right to deduct VAT is a cornerstone of that system, ensuring the neutrality of the tax, whereby its exercise should only be prevented for formal reasons when non-observance of the respective requirements constitutes an obstacle to AT inspection and/or collection of the tax. From another perspective, only those formal restrictions on the exercise of the right to deduction are permissible that do not render such exercise impracticable or excessively difficult.

As long as invoices or equivalent documents allow the AT to perceive the material reality that underlies them, so as to be able to exercise its inspection powers, determine the rate and proceed with collection, the right to deduct tax should not be obstructed merely because the aforementioned documents do not comply with all formal requirements. Requirements whose compliance is, moreover, beyond the control of the taxable person, since it is not the taxable person who issues the invoices or equivalent documents.

In a recent judgment (of 15/09/2016, in case no. C-516/14), delivered following a preliminary reference made in case 3/2014-T of CAAD, in which a case with marked similarity to the present was treated, and which we follow closely here, the Court of Justice concluded:

"Article 226 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that invoices containing only the mention 'legal services provided from a given date to the present', such as those in the main proceedings, do not, in principle, comply with the requirements laid down in section 6 of that article and that invoices containing only the mention 'legal services provided to the present' do not, in principle, comply with the requirements laid down in said section 6 nor the requirements laid down in section 7 of the same article, which it is, however, for the referring national court to verify.

Article 178(a) of Directive 2006/112 must be interpreted as meaning that it precludes national tax authorities from refusing the right to deduction of value added tax on the sole ground that a taxable person possesses an invoice that does not meet the requirements laid down in Article 226, sections 6 and 7 of that Directive, when those authorities have all the information necessary to verify whether the substantive requirements relating to the exercise of that right are satisfied".

That is, the CJEU, once again, ruled that, in this matter, and in accordance with Union law, substance prevails over form, which can only obstruct deduction when the formal defects of the supporting document are of such a nature as to prevent verification of the substantive requirements. Moreover, formal deficiencies in the supporting document may be remedied by other information, omitted therefrom but within the reach of the AT, which allows apprehension of the substance underlying that document.

Now, in the present case, and as was established in the factual section, the issuer of the invoice clarified that "The legal services and tax advisory services that were provided all have the same VAT rate and all relate to the activity of A… and its subsidiaries. They relate to the monitoring of all legal and tax matters of A… between 2008 and 2009, namely, in advisory services in the preparation and negotiation of the various property purchase and sale contracts, purchase and sale of shareholdings contracts, in participation in judicial and administrative proceedings, in the negotiation of bank refinancing operations and in participation in multiple meetings relating to the most diverse matters concerning A… and its subsidiaries, including attendance at several meetings abroad, namely in Spain".

Later, already within the scope of the voluntary appeal, a document was attached in which the law firm states that the invoice in question corresponds to "a final settlement of accounts that was that which was agreed globally with A…, as a result of an accumulated balance of accounts of fees that were pending. Both from that year and from previous years", clarifying that the services invoiced were provided "over several years", because "several of the proceedings [approximately three dozen, between judicial and administrative proceedings] dragged on over many years and some still exist today".

Thus, and in accordance with the interpretation that the CJEU makes of Article 178, subparagraph (e) of Council Directive 2006/112/EC, the Respondent cannot be followed when it judges that the requirements of paragraphs b) and f) of section 5 of Article 36 of the VAT Code remain unfulfilled and asserts that Article 29, section 19 of the VAT Code does not permit "(…) taxable persons to issue and deliver documents of a nature different from an invoice to evidence the supply of goods or provision of services to their respective customers or recipients, under penalty of application of legally prescribed penalties", concluding that "both the invoice and the addendum presented by the claimant do not comply with the said conditions provided for in Article 226 of the VAT Directive, namely the extent and nature of the services provided and the date on which the provision of services was effected".

What was at issue was not the evidencing of the provision of services by means of a mere declaration of its provider, in substitution for an invoice, but the admission that the provider clarified, supplementing it, the substantive content of the issued invoice.

On the other hand, it is not reasonable for the AT to invoke that the declaration made by the law firm "makes no reference whatsoever to the invoice in question", inasmuch as no other invoice was at issue in the inspection procedure, nor in the voluntary appeal or in the hierarchical appeal.

It should also be noted that the concepts of "various property purchase and sale contracts", "participation in judicial and administrative proceedings", "negotiation of operations", "participation in multiple meetings", "diverse matters", "several meetings abroad" should not be considered generic in the circumstances of the case file, since what was at issue were not invoices relating to purchases and sales, nor judicial proceedings and administrative procedures, nor negotiations, nor meetings, but legal services and advisory services provided by a law firm to which the Claimant resorted when it needed support in the various facets of its activity.

In truth, it does not appear to us to be required that a law firm make explicit, when invoicing its services, each and every contract in which it had a hand, the judicial proceedings it sponsored, the consultations it provided, to what effect, and when, and the time spent on each intervention.

Such a degree of requirement would be equivalent to interposing an obstacle that is hardly surmountable and substantially unjustified to the exercise of the right to deduct VAT – all the more so that, as noted above, the persons of the taxable person and the invoice issuer do not coincide.

It is admitted that the clarifications provided by the law firm and transmitted by the Claimant to the AT could have been more precise. But, it is recalled, formal requirements have the clear objective of permitting the AT to inspect the tax. As long as such inspection is assured, requiring more would be to sacrifice substance in favor of form, unjustifiably preventing the exercise of the right to deduct tax and impairing its neutrality. And, in the case, the complementary clarifications provided to the AT were sufficient for verification of the prerequisites of the right to deduct tax.

It should finally be said that in the case of VAT deduction, the possibility raised by the AT that the invoiced services were provided not only to the Claimant but also to its subsidiaries is irrelevant: the Claimant is the taxable person to whom the provision of services was invoiced with VAT, it was the one who deducted the VAT borne, and it is that deduction that was put in question, on the ground of lack of formal requirements of the invoice.

It is thus understood that, in the case, the Claimant has satisfied the burden of proof incumbent upon it, in accordance with Article 74, section 1 of the General Tax Law.

DECISION

In these terms, the present Arbitral Tribunal agrees to uphold the claim, annulling the additional VAT assessment act no. …, in the amount of € 119,833.33, and, consequently, the acts of dismissal of the voluntary appeal and the hierarchical appeal filed by the Claimant against it, and condemning the Respondent to the payment of compensatory interest calculated on that sum, from the payment until the refund.

VALUE OF THE CASE

In accordance with the provisions of section 2 of Article 306 and section 2 of Article 297, both of the Code of Civil Procedure, paragraph a) of section 1 of Article 97-A of the Code of Tax Procedure and Process and section 2 of Article 3 of the Regulation of Costs in Tax Arbitration Proceedings, the value of the case is fixed at € 119,833.35.

COSTS

In accordance with the provisions of section 4 of Article 22 and section 2 of Article 12, both of the LFTA, in Article 2, section 1 of Article 3 and sections 1 to 4 of Article 4 of the Regulation of Costs in Tax Arbitration Proceedings, as well as in Table I attached to this statute, the total value of costs is fixed at € 3,060.00, at the charge of the AT.

Let it be notified.

Lisbon, 13 April 2018.

The arbitrators,

(José Baeta de Queiroz)

(Hélder Faustino)

(Jorge Carita)

Text prepared by computer, in accordance with the provisions of section 5 of Article 131 of the Code of Civil Procedure, applicable by reference of subparagraph e) of section 1 of Article 29 of the LFTA.

The wording of this decision is governed by the spelling prior to the Spelling Agreement of 1990.

Frequently Asked Questions

Automatically Created

Can VAT be deducted on invoices for legal and tax consultancy services described generically?
Under Portuguese tax law and the CAAD tribunal's analysis, VAT deduction on invoices for legal and tax consultancy services with generic descriptions depends on whether the description allows tax authorities to verify substantive deduction requirements. While Article 36(5)(f) of the VAT Code requires invoices to contain elements enabling identification of goods or services, the tribunal considers whether generic terms like 'legal services and tax advisory services' provide sufficient precision given the nature of professional services and whether supplementary documentation can remedy any descriptive limitations.
What are the formal invoice requirements for VAT deduction under Portuguese tax law?
Portuguese VAT law requires invoices to comply with Article 36(5) of the VAT Code and Article 226 of the EU VAT Directive. Key formal requirements include: supplier and customer identification and tax numbers (Article 36(5)(a-b)), invoice date and number (c-d), quantity and description of goods/services enabling their identification (f), unit price and taxable amount (g-h), applicable tax rate and amount (i-j), and date of goods delivery or service completion (e). The critical issue is whether the description in paragraph (f) must itemize each specific service or whether generic professional service categories suffice when substantive deduction conditions are verifiable.
Does the description 'legal services and tax consultancy' on an invoice meet VAT deduction requirements?
The description 'legal services and tax consultancy' on an invoice presents a contentious issue under Portuguese VAT law. The Tax Authority's position is that such generic wording fails Article 36(5)(f) requirements because it doesn't individually identify contracts, proceedings, restructuring operations, or specific consultations. However, the claimant argues this description uses terminology consistent with legislative practice and commercial custom, provides adequate precision given the nature of ongoing professional relationships, and allows verification of deduction requirements when considered alongside available supplementary documentation. The outcome depends on whether formal compliance is assessed strictly based on invoice content alone or holistically considering all available evidence.
Can the Portuguese Tax Authority deny VAT deduction based solely on insufficient invoice description?
The Portuguese Tax Authority can deny VAT deduction based on insufficient invoice description, but the legal framework requires demonstrating that descriptive deficiencies make verification of substantive deduction requirements impossible or excessively difficult. The Authority must prove, not merely assert, that the invoice description prevents confirming: (1) services were subject to VAT, (2) both parties were taxable persons, (3) services related to the purchaser's taxable activity, and (4) other substantive conditions under Article 19-20 of the VAT Code are met. When supplementary documentation exists that could remedy descriptive limitations, the Authority's burden includes showing it actually attempted verification and was prevented by inadequate information.
What is the CAAD arbitral tribunal's position on the level of detail required in invoices for professional services VAT deduction?
The CAAD arbitral tribunal's position examines whether requiring detailed itemization of individual legal matters, proceedings, and consultations exceeds what is necessary and proportionate to achieve VAT control purposes. The tribunal considers that for professional services provided under continuing relationships, generic category descriptions may satisfy formal requirements if: (1) they use terminology consistent with legislative and commercial practice, (2) the service nature provides inherent precision limits, (3) substantive deduction conditions remain verifiable through available documentation, and (4) requiring excessive detail would impose disproportionate administrative burdens. The tribunal emphasizes that formal requirements serve verification purposes and must be interpreted accordingly, not as ends in themselves divorced from their control function.