Summary
Full Decision
ARBITRAL AWARD
CAAD: Tax Arbitration
Case No.: 567/2015-T
Subject Matter: CIT – Competence of the Arbitral Tribunal; adequacy of the procedural means; free movement of capital; Euro-Mediterranean agreements; deductibility; elimination of double taxation
ARBITRAL AWARD
Claimant: A…, S.A.
Respondent: Tax and Customs Authority
The arbitrators José Baeta de Queiroz (arbitrator-president), João Sérgio Ribeiro and Luísa Anacoreta, designated by the Deontological Council of the Centre for Administrative Arbitration to form the Arbitral Tribunal, agree as follows:
I – REPORT
On 1 September 2015, the taxpayer A…, S.A., with Tax Identification Number … (hereinafter "Claimant"), with registered office and … , parish …, municipality of …, submitted a request for the constitution of a Collective Arbitral Tribunal, in accordance with the combined provisions of articles 2 and 10 of Decree-Law No. 10/2011, of 20 January (Legal Regime for Arbitration in Tax Matters, hereinafter "RJAT", which currently applies with the wording introduced by article 228 of Law No. 66-B/2012, of 31 December), in which the Tax and Customs Authority is respondent (hereinafter "AT" or "Respondent").
In such request, the Claimant seeks an arbitral pronouncement on the dismissal of the hierarchical appeal No. …2012…, filed following the order dismissing the administrative complaint with the case number …2011….
The request for constitution of the arbitral tribunal was accepted by the President of CAAD and automatically notified to the AT on 18 September 2015.
In accordance with the provisions of paragraph (a) of article 6(2) and paragraph (b) of article 11(1) of the RJAT, with the wording introduced by article 228 of Law No. 66-B/2012, of 31 December, the Deontological Council designated as arbitrators of the Collective Arbitral Tribunal the undersigned signatories, who communicated acceptance of such mandate within the applicable period.
On 4 November 2015, the parties were notified of such designation and raised no objection.
The Collective Arbitral Tribunal was constituted on 17 November 2015, in accordance with the provisions of paragraph (c) of article 11(1) of Decree-Law No. 10/2011, of 20 January, with the wording introduced by article 228 of Law No. 66-B/2012, of 31 December.
The act subject to the Tribunal's pronouncement is the illegality of taxation imposed on dividends received from shareholdings held in B…, with tax residence in Tunisia, and in C…, with tax residence in Lebanon, during the fiscal year 2008.
The Tax and Customs Authority submitted a response in which it raised preliminary objections concerning the material incompetence of the Arbitral Tribunal and the impropriety of the procedural means.
On 4 February 2016, a meeting was held at which the Arbitral Tribunal was present with all arbitrators and representatives of both the Claimant and Respondent.
At the aforementioned meeting, the parties agreed on the submission of written arguments, with the Claimant pronouncing itself on the matter of preliminary objections in its arguments.
The deadline of 17 May 2016 was set for the issuance of the Arbitral Award, later extended to 15 July 2016.
The Claimant submitted written arguments on 19 February 2016.
The Respondent submitted written arguments on 4 March 2016.
The claim subject to the request for arbitral pronouncement consists, in summary, of the following:
(i) that the income included in the tax base corresponding to profits distributed by B… and C… to the Claimant be fully deducted under the same conditions as provided for profits distributed by companies resident in Portugal, on the basis of the two Euro-Mediterranean Agreements establishing, each of them, an association between the European Communities and their Member States, on the one hand, and the Republic of Tunisia and Lebanon, on the other;
(ii) subsidiarily to the request in (i), that the same income be fully deducted under the same conditions as provided for profits distributed by companies resident in Portugal, on the basis of article 63(1) TFEU, former article 56(1) of the Treaty establishing the European Community;
(iii) subsidiarily to the requests in (i) and (ii), that the same income be fully deducted under the same conditions as provided for profits distributed by companies resident in PALOP countries and Timor-Leste, on the basis of article 63(1) TFEU, former article 56(1) of the Treaty establishing the European Community;
(iv) subsidiarily to (i), (ii) and (iii), that the income included in the tax base corresponding to the aforementioned profits be partially deducted – by 50% – under the same conditions as provided for profits distributed by companies resident in Portugal, irrespective of the percentage of the shareholding held by the shareholder in the affiliate, on the basis of article 63(1) TFEU, former article 56(1) of the Treaty establishing the European Community;
(v) the payment of indemnity interest in accordance with articles 43 and 100 of the General Tax Law and article 61 of the Tax Procedure Code; and
(vi) the reimbursement of costs incurred and to be incurred by the Claimant with attorneys' fees and expenses relating to the legal framework of the matter, monitoring of the administrative procedure, preparation and monitoring of the arbitral proceedings, as well as other expenses incurred or to be incurred with the arbitration – including the arbitration fee – all in an amount to be determined later.
In its Response, the Tax and Customs Authority, in summary, alleged the following, after presenting preliminary objections concerning the material incompetence of the Arbitral Tribunal and the impropriety of the procedural means:
(i) The Claimant's position is unfounded.
(ii) Article 46 CIRC [Corporate Income Tax Code] establishes the right to elimination of economic double taxation only and exclusively in the situations and conditions expressly provided therein.
(iii) This is only established for dividends of domestic origin and originating from a company of a Member State of the European Union.
(iv) National legislation therefore opposes the application of the same regime when the entity distributing the profits is resident in a third state.
(v) The Euro-Mediterranean Agreements do not have the effect of extending to Tunisia or Lebanon any regime of benefit or tax advantage to investments made there, nor do they impose the extension of the regime provided for in article 46 of the Corporate Income Tax Code to profits distributed by companies residing there, being compatible with the existence of this article with International Law.
(vi) And, when (and only when) fiscal rules are at issue, Member States may distinguish between taxpayers that are not in identical situations with regard to their place of residence or the place where capital is invested.
(vii) Furthermore, the primary law of the European Union corroborates the aforementioned inapplicability of the regime for elimination of economic double taxation provided for in article 46 CIRC when profits from Third States are at issue by virtue of the safeguard clause provided for in article 57 of the EC Treaty.
(viii) And, unless there exists a violation which, according to the jurisprudence of the Court of Justice, must undoubtedly be qualified as "sufficiently established", it should not fall to the Tax Administration to disapply or refuse to apply a norm contained in the domestic legal order solely on the ground of its incompatibility with Community law.
(ix) Furthermore, the situation under consideration justifies the restriction on free movement of capital by an imperative reason of general interest relating to the effectiveness of tax controls and, inherently, to the fight against tax fraud.
(x) And, even if the application of the regulation in question had restrictive effects on the free movement of capital, those effects would be an ineluctable consequence of a possible obstacle to freedom of establishment and therefore would not justify an autonomous analysis of the legislation in question in light of article 56 of the EC Treaty.
II – PROCEDURAL REVIEW
The Arbitral Tribunal was duly constituted.
The parties have legal personality and capacity, are legitimately constituted and are legally represented in accordance with articles 4 and 10 of the RJAT and article 1 of Ordinance No. 112-A/2011, of 22 March.
The proceedings are free of defects and it is important to address the preliminary objections first.
III – THE PRELIMINARY OBJECTIONS REGARDING MATERIAL INCOMPETENCE OF THE ARBITRAL TRIBUNAL AND IMPROPRIETY OF THE PROCEDURAL MEANS USED
The AT raised two preliminary objections that are interrelated, and therefore we shall treat them jointly.
Concerning the material competence of the Arbitral Tribunal, it states that competence does not exist, given the Claimant's request and the list of matters to which it bound itself to arbitration, all in accordance with article 2(1) of the RJAT and Ordinance No. 112-A/2011, of 22 March.
This is because what the Claimant seeks is recognition of a right, namely the "right to deduct, in full or only 50%, the amount of income included in the tax base corresponding to profits distributed to it by B… and C…".
Regarding the impropriety of the means, it asserts that the proper means would be an action for recognition of a right or legally protected interest in tax matters.
However, it is not necessary to expand the AT's "binding to the arbitration protection legally fixed", as it fears, in order to assess the Claimant's claim.
In fact, the latter requested the constitution of the arbitral tribunal to challenge a self-assessed Corporate Income Tax from which it first filed an administrative complaint and then a hierarchical appeal, without success.
And the defect it imputes to such an assessment act and to the decisions issued in the administrative complaint and hierarchical appeal is a defect of violation of law, in that the income included in the tax base corresponding to profits distributed to it by B… and C… were not deducted.
Now, article 2(1)(a) of the RJAT is explicit in conferring on arbitral tribunals the competence to assess "the declaration of illegality of tax assessment acts, self-assessments, (...)". Competence that extends to acts dismissing administrative complaints and hierarchical appeals that have assessed the legality of the assessment act.
Furthermore, with regard to the binding of the Tax and Customs Authority, the restrictions contained in article 2 of Ordinance No. 112-A/2011, of 22 March, do not cover the case before us.
As for the alleged impropriety of the means chosen by the Claimant, it is based on a petitio principii, namely that its claim is the recognition of a right or legally protected interest in tax matters.
In fact, the right that the Claimant seeks to obtain is the right to a tax assessment free of defects...
And, for such purpose, the means it employed is the appropriate one.
The preliminary objections submitted are therefore unfounded.
IV – MERITS
IV.1 – FACTUAL MATTERS
§1. PROVEN FACTS
- For purposes of assessment and decision of the issues raised, the following facts are established and proven:
A) The Claimant submitted, on 31 May 2011, an administrative complaint regarding the self-assessed Corporate Income Tax for 2008, which was dismissed by order of 6 September 2012.
B) The Claimant submitted, on 4 October 2012, a hierarchical appeal of the dismissal decision.
C) This hierarchical appeal was dismissed, by decision notified to the Claimant on 25 May 2015.
D) Following this decision, the Claimant requested the constitution of an Arbitral Tribunal as described above.
E) A…, S.A., legal entity no. …, is a company governed by Portuguese law, with registered office in …, parish …, municipality of….
F) During the fiscal year 2008, the Claimant held a 98.72% shareholding in B…, a company with tax residence in Tunisia, a shareholding held since 2000.
G) During the same fiscal year, the Claimant held a shareholding, partly direct and partly indirect, which in total amounted to 50.67% in C…, a company with tax residence in Lebanon, a shareholding held at approximately this percentage since 2007.
H) The Claimant received during the fiscal year 2008 dividends from its subsidiaries in Tunisia and Lebanon in the amount of €2,700,817.00 and €2,031,696.23, respectively.
I) The profits distributed by its Tunisian and Lebanese subsidiaries in 2008 generated, in the sphere of the Claimant, Corporate Income Tax and municipal surcharge of €1,183,128.31 and €70,987.70, respectively, which total taxation of €1,254,116.01.
J) The dividends received by the Claimant were subject to taxation in Portugal and did not benefit from any regime for elimination of economic double taxation.
K) Thus, to the taxation that in Tunisia applied to the profits of the Tunisian company, a second taxation was added on dividends received in the sphere of the Claimant, shareholder of the Tunisian company.
L) And to the taxation that in Lebanon applied to the profits of the Lebanese company, a second taxation was added on dividends received in the sphere of the Claimant, shareholder of the Lebanese company.
M) The Euro-Mediterranean Agreement establishing an association between the European Communities and their Member States and the Republic of Tunisia has as signatory States all the Member States of the Communities, including the Portuguese Republic.
N) The Euro-Mediterranean Agreement establishing an association between the European Communities and their Member States and the Republic of Lebanon has as signatory States all the Member States of the Communities, including the Portuguese Republic.
§2. UNPROVEN FACTS
No other facts relevant to the plausible legal solutions were proven.
§3. REASONING REGARDING FACTUAL MATTERS
The established facts were based on critical analysis of the administrative proceedings and other documents attached to the file, the authenticity and veracity of which were not challenged by either party, as well as the consensual positions of the parties.
IV.2 – LEGAL MATTERS
§1. REGARDING THE REMAINING LEGAL QUESTIONS
The main claims will be assessed first, only moving on to assess the subsidiary claims if the main ones are unfounded. The subsidiary claims should therefore only be taken into consideration in the event that a prior claim is unfounded [article 554(1) of the Civil Procedure Code, applicable by virtue of article 29(1)(e) of the RJAT].
There is an arbitral decision on a matter entirely identical to the one that needs to be decided, contained in the CAAD judgment issued on 12 September 2013, within case No. 22/2013-T. Given the complete soundness of the grounds of that decision, this tribunal will fully adhere to them, transcribing them in large part with very minor alterations. The adoption of the legal grounds of judgment No. 22/2014-T will be punctuated by several references to the conclusions of 27 January 2016 of Advocate General Melchior Wathelet (hereinafter Advocate General) in Case C-446/14 Secil – Companhia Geral de Cal e Cimento, S.A. v. The Treasury, since in that case exactly the same issues are discussed that this tribunal must decide on, the only difference being the year to which the dividends in question pertain.
1. The Issue of Full Deductibility of Income Included in the Tax Base Corresponding to Profits Distributed by B… and C… to the Claimant
The main issue to be decided in the present arbitral proceedings is whether the differentiation established by national legislation between the treatment of profits when distributed by a non-resident company or by a company in Portugal or a Member State of the European Union is (in)compatible with the free movement of capital provided for in article 63 of the Treaty on the Functioning of the European Union (TFEU), as it results in a less favorable tax regime for non-residents.
1.1. Framework
In accordance with Portuguese legislation applicable to the assessment in question, in general, whenever a company participates in the capital of another company and, in that context, benefits from a distribution of profits by the investee company, such profits are included in its tax base. That is, they are considered as forming part of the income of the company that benefits from them. The incorporation of such profits in the taxable income of the beneficiary company generates economic double taxation, since the same profit is taxed in the sphere of two distinct legal entities. In order to remedy this double taxation and the negative effects it has on economic activity, the tax legislator created some mechanisms.
The mechanism provided for in article 46(1) CIRC, which the claimant seeks to have applied to it, eliminates economic double taxation by allowing the deduction from income included in the tax base of distributed profits, provided that several requirements are met. It requires, for this purpose, that (i) the company distributing the profits has its seat and effective management in Portugal or in a Member State of the European Union (46(5)), (ii) is subject to income tax; (iii) the beneficiary company is not covered by the transparent tax regime and (iv) holds directly a shareholding in the capital of the company distributing the profits not less than 10% or with an acquisition value not less than 20,000,000 Euros, which shareholding has been continuously owned by the beneficiary for the year preceding the date on which the profits were made available.
The mechanism described and which the claimant seeks to benefit from, as results from the letter of the law, can only be applied to companies meeting the described requirements, which at first sight could not benefit the claimant. This is because, although pursuant to the proven facts the situation sub judice fulfills most of the requirements, namely (i) that concerning the amount and duration of the shareholding held in the companies distributing the profits, (ii) that relating to the subjection to taxation of the companies: B… (hereinafter Tunisian company) and C… (hereinafter Lebanese company)] and (iii) that concerning the fact that the Claimant is not subject to transparent taxation ─ the Tunisian company and the Lebanese company do not have residence in Portugal or in a Member State.
1.2. European Union Law
Notwithstanding the limitation resulting from the letter of the law, it is possible to conceive that, through European Union Law, the scope of application of the mechanism of article 46 CIRC could be extended. For, as is well known, although only the Member States have competence in direct taxation, the Court of Justice has sustained, through its decisions, that these States must exercise such competence in conformity with European Union law[1]. Thus avoiding violations of the five fundamental economic freedoms, namely: (i) the free movement of goods (articles 28 et seq. TFEU); (ii) the free movement of workers (articles 45 et seq. TFEU); (iii) freedom of establishment (article 49 et seq. TFEU); (iv) freedom to provide services (article 56 et seq. TFEU) and (v) free movement of capital (article 63 et seq. TFEU). Now, it is precisely through the protection of each of these freedoms, directly applicable, that genuine harmonization occurs by means of jurisprudence that results in the obligation that national laws conform to each of these freedoms.
1.3. Free Movement of Capital
Based on the circumstances of the situation under analysis, in particular the scope of the mechanism for elimination of double taxation contained in article 46 CIRC, it is observed that the application of that article solely to companies with residence in the European Union or in Portugal that distribute profits represents, at first sight, a violation of the free movement of capital (article 63 TFEU). This freedom, moreover, is the only one that also applies to third states, and it is now settled that its content is exactly the same when Member States and third states are concerned. Consequently, restrictions on this freedom are prohibited regardless of whether Member States or third states are involved[2], exactly the same way, and the situations are perfectly comparable. In other words, all restrictions relating to the movement of capital and payments between the Member States and between them and third countries are prohibited[3].
The assertion that, in fact, the non-application of the regime of article 46(1) CIRC to dividends distributed by the Tunisian and Lebanese companies corresponds to an intolerable situation of discrimination against the free movement of capital (by discouraging taxpayers taxed in Portugal from investing their capital in Tunisia and Lebanon) presupposes, consequently, on the one hand that article 63 TFEU is applicable to those situations and on the other that, being this the case, and there being therefore discrimination, neither the safeguard clause applies nor is there a valid justification for such discrimination.
To answer the first question, that is, whether article 46 is or is not covered by the scope of the free movement of capital (article 63 TFEU), it is necessary to clarify from the outset whether both the acquisition of shares in a company and the payment of dividends resulting from that operation fall within or outside that freedom.
There is no definition of "movement of capital" in the Treaty. It is important to note, however, that the Court of Justice confirmed in several judgments, when making a non-exhaustive list of capital movements, that the terminology applied to these movements in Annex I of Council Directive 88/361/EEC, of 24 June 1988, for the implementation of the former article 67 EC Treaty, now repealed, still has some relevance. In this context, the Court of Justice decided that the following can be recast as capital movements within the meaning of article 63: notably, so-called "direct" investments, that is, investments in the form of participation in an enterprise through the holding of shares conferring the possibility of effectively participating in its management and control, as well as so-called "portfolio" investments, that is, investments in the form of acquisition of securities in the capital market with the sole objective of making a financial investment without intention to influence the management and control of the enterprise[4].
According to the Court of Justice, restrictions on the capital movements mentioned encompass "not only national measures which, when applied to capital movements with destination to third countries or coming from them, restrict establishment or investments but also those which restrict the payment of dividends resulting from them"[5].
It follows, as a consequence of the foregoing, in the words of the Court of Justice itself that "a company resident in a Member State which holds a shareholding in a company resident in a third country that confers on it a certain influence in the decisions of the latter company and enables it to determine its activities may rely on article 63 TFEU to challenge the compatibility with this provision of legislation of that Member State relating to the tax treatment of dividends originating from the said third country, not exclusively applicable to situations in which the parent company exercises decisive influence in the company making the distribution of dividends"[6].
With regard to the latter part of the quoted excerpt, it should be emphasized that although historically, also due to its relationship with the Parent-Subsidiary Directive, it would be conceivable that article 46(1) CIRC had in its origin in mind situations of control or effective influence, today, however, notwithstanding that there may be such preponderance, it is clear that it does not refer exclusively to such situations. First and foremost because 10% of capital, depending on how dispersed it is, does not guarantee effective control. Furthermore, and this idea is particularly important, the 10% shareholding requirement is an alternative to the acquisition of a shareholding valued at 20,000,000 Euros, which does not have to correspond to 10% or any predefined shareholding percentage. Now, depending on the type of enterprise, 20,000,000 Euros may represent a highly variable percentage in terms of the relevance of the shareholding, and this may or may not permit effective control. One cannot therefore in any way state that article 46(1) CIRC applies exclusively to situations in which the parent company exercises decisive influence in the company making the distribution of dividends.
It is therefore clear that article 46 CIRC is clearly covered by the movement of capital, and therefore a State's refusal to grant elimination of double taxation to dividends originating from Tunisia and Lebanon, when such elimination is permitted for dividends of domestic origin, constitutes discrimination[7]. For, as is obvious, that provision limits the acquisition of shares in companies in those countries, which cannot be permitted".
It is noted in this regard by the Advocate General that "...the Portuguese legislation at issue in the main proceedings does not distinguish between dividends received by a resident company on the basis of a shareholding that confers on it a certain influence over the decisions of the company making the distribution of those dividends, and enabling it to determine its activities, and dividends received on the basis of a shareholding that does not confer such influence"[8] and that "consequently, as far as the TFEU is concerned, the present case falls within the free movement of capital"[9].
1.4. Safeguard Clause
Once the applicability of article 63 TFEU is verified, it is necessary, however, before drawing full consequences therefrom, to verify whether the safeguard clause of article 64 TFEU is susceptible to application. This article provides that, where restrictions exist on 31 December 1993 pursuant to national legislation or Union legislation in relation to certain capital movements with third countries involving, among other operations, direct investment (the situation with which we are dealing), it is possible to prevent the free movement of capital. This is because "the objective and legal context of the liberalization of capital movements are different depending on whether it concerns relations between Member States and third countries or the free movement of capital between Member States, [thus] they considered it necessary to provide safeguard clauses and exceptions that apply specifically to capital movements with destination or originating from third countries"[10]. The safeguard clause aims, ultimately, to allow some control by the States, given that the free movement of capital is normally ensured unilaterally and without reciprocity.
Regardless of whether the Portuguese rule excluding dividends distributed by companies of third states from the mechanism of economic double taxation constitutes or not a provision conforming to the requirements of article 64 TFEU, the existence and content of the Euro-Mediterranean Agreements concluded with Tunisia and Lebanon would always prevent the application of that safeguard clause to situations involving Tunisian and Lebanese companies. It is worth recalling that Portuguese law provides for a clause of full automatic reception of international conventional law, once the formalities of approval, ratification and publication are completed (article 8(2) CRP). It follows from this that treaties are immediate sources of rights and obligations for their addressees and can be invoked before courts.
Treaties are hierarchically superior to ordinary law. This superiority results not only from articles 26 and 27 of the Vienna Convention on the Law of Treaties, but also from article 8(1) and (2) of the CRP. It is thus clear that, for the convention to apply in the domestic legal order, it is necessary that subsequent ordinary law cannot revoke it. That is, international conventional law cannot be overridden by ordinary laws, appearing as superior to them. Whether such subsequent laws, which would be materially unconstitutional if they contravened it; or whether prior, which would have to be suspended if they conflict with such international conventional law, only resuming application in the event of suspension or termination of the international convention in question.
Moreover, the agreements concluded with Tunisia and Lebanon, as mixed treaties, that is, treaties concluded jointly by the European Union (then European Community) and the Member States, are sources of Law by two routes, as European Union Law[11] and as International Law of automatic incorporation in our legal system.
Although these agreements essentially aim at liberalization at the level of fundamental economic freedoms and avoiding discrimination, they carry within themselves, given the breadth of these freedoms, the fiscal question due to its impact on them. The fact that the agreements with Tunisia and Lebanon incorporate clauses that specifically make reference to taxes attests to this. Examples are those that permit the parties, in particular, the right to distinguish residents and non-residents for purposes of taxation. Now, it only makes obvious sense to include clauses of this type if agreements such as those concluded with Tunisia and Lebanon have an impact on the tax legislation of the signatory States. The fact that they were signed by the various Member States, and therefore also by Portugal, assures that underlying them is an exercise of indisputable and full fiscal sovereignty, which reinforces their direct effect.
It is important to note that, prior to the signing of these agreements, the free movement of capital from Tunisia and Lebanon to Portugal and other Member States was already assured; with the possible application of the safeguard clause, it is true, but it already existed. By which we are forced to conclude that the objective of the agreements with Tunisia and Lebanon, similar to what occurred with other countries for which the same agreement model was followed, was essentially to assure the reciprocity of this freedom. Specifically, regarding direct investments originating from the European Union.
Article 34 of the agreement with Tunisia, contained in Chapter I, entitled "Current payments and movement of capital", of its respective Title IV, entitled "Payments, capital, competition and other economic provisions", provides:
"1. With regard to transactions on the capital account, [the Union] and Tunisia shall ensure, from the date of entry into force of this Agreement, the free movement of capital relating to direct investments in Tunisia, made in companies established in accordance with the legislation in force, as well as the liquidation or repatriation of such investments and any profits resulting therefrom.
- The parties shall consult each other with a view to facilitating the movement of capital between [the Union] and Tunisia and to liberalizing it fully when the necessary conditions are in place."
It should be noted that the transcribed article did not limit itself to referring to direct investments in Tunisia, ensuring with respect to them the free movement. It furthermore expressly provided that "[the Community] and Tunisia shall ensure...the liquidation or repatriation of such [direct] investments and any profits resulting therefrom".
Article 31 of the EC-Lebanon agreement, contained in Chapter I, entitled "Current payments and movement of capital", of its respective Title IV, entitled "Payments, capital, competition and other economic provisions", provides:
"Within the scope of this Agreement and subject to the provisions of articles 33 and 34, no restrictions shall be imposed on the movement of capital between [the Union], on the one hand, and Lebanon, on the other, nor shall there be any discrimination based on nationality or place of residence of the respective nationals or on the place of investment of the said capital."
Providing, in turn, article 33, contained in the same Chapter I of that agreement:
"1. Subject to other provisions of this Agreement and other international obligations of [the Union] and Lebanon, the provisions of articles 31 and 32 shall not prejudice the application of any restriction existing between the parties on the date of entry into force of this Agreement, relating to the movement of capital between them involving direct investment, including in real estate, establishment, provision of financial services or admission of securities to capital markets.
- However, the transfer abroad of investments made in Lebanon by residents [of the Union] or in [the Union] by Lebanese residents or of profits resulting therefrom shall not be affected."
Notwithstanding there being differences in the wording of the provisions regulating direct investments and repatriation of profits resulting therefrom, the solution they propose is the same. This is because, although article 31 of the EC-Lebanon Agreement ensures the free movement of capital "subject to [article] 33 [...], which provides, in its paragraph 1, that:
"[article] 31 [...] shall not prejudice the application of any restriction existing between the parties on the date of entry into force of this Agreement, relating to the movement of capital between them involving direct investment, including in real estate, establishment, provision of financial services or admission of securities to capital markets".
Paragraph 2 of said article adds that:
"[h]owever, the transfer abroad of investments made in Lebanon by residents [of the Union] or in [the Union] by Lebanese residents or of profits resulting therefrom shall not be affected"[12].
Now, taking into account that the solution resulting from the transcribed provisions already resulted, in the abstract, from the free movement of capital ensured to third states (without prejudice to the application of legislation falling within the safeguard clause or other accepted restrictions), it must result from this reference, proceeding from the assumption that agreements as a rule are not redundant, the following conclusion. At least as far as the movement of capital relating to direct investments involving Tunisia and Lebanon is concerned, the provisions susceptible of being validated by the safeguard clause, that is, those that were in force on 31 December 1993, cease to be applied. It is clear that one of the implications that results both from article 34(1) of the agreement with Tunisia, which entered into force on 1 March 1998, and from article 31 of the agreement with Lebanon, which entered into force on 1 April 2006, must be this, with these articles representing suggestive clarifications in this regard. As norms subsequent to the norms in force in 1993, which are of a superior nature and which furthermore assume a special nature, they necessarily override them, and therefore exclude a possible safeguard clause that might prevent the full application of the free movement of capital relating to direct investments in Tunisia and Lebanon.
The Advocate General stated in this regard that "[i]n fact, article 64 TFEU permits, but does not require, the application between Member States and third countries of restrictions on capital movements in force on 31 December 1993. Consequently, nothing prevents Member States from renouncing such restrictions unilaterally or ... within the framework of an international agreement, in full (as in the EC-Tunisia Agreement) or partially (as in the EC-Lebanon agreement)"[13].
Moreover, no other consequence was possible, on penalty of the agreements with Tunisia and Lebanon seeing the objectives they clearly seek to achieve regarding the free movement of capital when direct investments are concerned entirely frustrated. It should not be forgotten that one of the reasons for the establishment of the safeguard clause contained in article 64 TFEU was certainly the lack of reciprocity on the part of third states as regards the free movement of capital. Now, with this ensured with respect to Tunisia and Lebanon, it no longer makes sense to apply the safeguard clause in relations with these countries. This interpretation is, moreover, the only one consistent with observance of the principle of good faith[14], unavoidable in the interpretation of treaties, and which certainly prevents one of the parties to the agreement from putting it in question by maintaining a provision incompatible with it.
The solution conveyed presupposes, however, that article 34(1) of the agreement with Tunisia, and article 31 of the agreement with Lebanon, after taking into account their nature, context, clarity and precision of the wording of each can be applied directly without need for adoption of any subsequent measure[15]. Considering all these requirements, with emphasis on the objectives and context in which the agreements were concluded, we are led to conclude that the articles in question can be applied directly. In line, moreover, with the Advocate General who expressly stated: "I consider that articles 34 of the EC-Tunisia Agreement and 31 of the EC-Lebanon Agreement have a direct effect that can be invoked by A..."[16].
Regarding the question of whether the creation of a regime of specific tax benefits for dividends from Portuguese-speaking African countries and Timor-Leste, under article 42 EBF, would imply the impossibility of invoking the safeguard clause contained in article 64 TFEU, we consider that it does not. Creating an exception to the rule, within a specific framework such as relations between Portugal and those countries, certainly does not imply an alteration of the rule which remains the same as contained in article 46 of the CIRC. Only if this article were to assume a different logic, instituting new procedures, breaking with prior law, would it be conceivable that invoking the safeguard clause becomes impossible[17], which manifestly does not appear to be the case. In line, moreover, with the Advocate General who states that "[o]ne cannot conclude that, by adopting these specific regimes, the Portuguese Republic decided to abandon the possibility of invoking the safeguard clause provided for in article 64 TFEU, whose scope may be limited"[18].
1.5. Implications of Article 89 of the Agreement Concluded with Tunisia and Article 85 of the Agreement Concluded with Lebanon (Carve-out Clauses)
It is now important to determine whether article 89 of the agreement with Tunisia and article 85 of the agreement with Lebanon puts in question the removal of the discriminatory regime of article 46 CIRC, possibly preventing article 34(1) of the agreement with Tunisia and article 31 of the agreement with Lebanon from being interpreted in the sense we have just given them.
Article 89 of the agreement with Tunisia, contained in Chapter I of its Title VIII, entitled "Institutional, general and final provisions", provides:
"No provision of this Agreement may have the effect of:
– increasing the advantages granted by one party in the fiscal field in any international agreement or convention binding that same party,
– preventing the adoption or application by one party of any measure intended to prevent tax fraud or evasion,
– preventing the right of one party to apply the relevant provisions of its tax legislation to taxpayers that are not in identical situations with regard to their place of residence."
Article 85 of the aforementioned agreement with Lebanon, contained in Title VIII, entitled "Institutional, general and final provisions", provides:
"With regard to direct taxation, nothing in this Agreement may have the effect of:
a) Increasing the tax advantages granted by one of the parties in any international agreement or convention binding it;
b) Preventing the adoption or application by one party of any measure intended to prevent tax fraud or evasion;
c) Preventing either party from applying the relevant provisions of its tax legislation to taxpayers that are not in identical situations, in particular with regard to their place of residence."
Given the identity of the two provisions, we shall analyze their effects jointly.
The first effect that the transcribed articles seek to prevent is solely that through the agreement the tax advantages granted by any of the parties (European Union, Member States, Tunisia and Lebanon) within any agreement or convention they have concluded are increased. That is, the aim is to confine the tax advantages resulting from the agreements with Tunisia and Lebanon to relations between the parties and not to extend it to other States with which they have concluded an agreement or convention. The aim is, therefore, to prevent that in the fiscal realm and as a result of a treaty the application of the most-favored-nation principle be admitted[19]. This effect does not therefore have in view the conventions binding the contracting parties among themselves, but conventions with third states, and therefore no impediment to the non-application of any possible safeguard clause to situations of direct investment in Tunisia and Lebanon can be inferred therefrom.
The Advocate General spoke in this sense when saying "regarding article 89, first dash, of the EC-Tunisia Agreement...I consider, as does the Commission, that the object of that provision is to prevent that a norm provided for in a double-taxation-preventing convention concluded by the Portuguese Republic with another State that is not the Republic of Tunisia be extensible to a resident Tunisian whose State of residence is not party to that convention. Now, A... does not aim to obtain an advantage granted by a double-taxation convention that the Portuguese Republic has concluded with another State that is not the Republic of Tunisia. The same applies to article 85, paragraph (a), of the EC-Lebanon Agreement"[20].
The second effect that it seeks to prevent the agreements with Tunisia and with Lebanon from putting in question the application of measures that oppose tax fraud or evasion is not susceptible to fitting the situation with which we deal, and the issue has not even been raised or evidence of any situation of evasion or fraud verified.
Even if such a situation were to occur, the articles under analysis would never have the effect of preventing reactive measures, transcending the ultimate sense and framework of each of them any understanding with such content. Also the Advocate General confirmed this understanding when saying that: "Articles 89, second dash, of the EC-Tunisia Agreement and 85, paragraph (b), of the EC-Lebanon Agreement permit the parties to those agreements to adopt or apply any measure intended to prevent tax fraud or evasion. However, as there is no allegation of fraud or evasion in the present proceedings, the said provisions do not apply"[21].
The third effect, finally, also raises no obstacle to the interpretation advocated regarding the effects of article 34(1) of the agreement with Tunisia and article 31 of the agreement with Lebanon. For, although it is permitted that the parties may distinguish taxpayers based on the condition of resident, that distinction can never be arbitrary or result in discriminatory treatment of objectively comparable situations, on penalty of, contrary to the spirit of the agreements themselves, rendering the aforementioned articles 34(1) and 31 dead letter. Not to mention the flagrant violation of European Union law itself which prohibits both direct and indirect discrimination. The first is made based on nationality and the second normally rests on a criterion leading to the same result. Curiously, the Court of Justice sustained in this regard that when distinctions based on residence deprive non-residents of certain benefits that are guaranteed to residents, they may constitute indirect discrimination based on nationality[22], which is especially relevant for the case being judged, to the extent that different treatment of the Tunisian companies would precisely have those effects.
The same type of argumentation can be applied regarding A..., as the Advocate General did.
"[A...] is a company resident in Portugal and the provisions in question do not permit that, in that capacity, it be a victim of discrimination based on the place of residence of its affiliates. In this regard, I recall the settled case-law of the Court of Justice according to which 'the situation of a shareholder company that receives dividends of foreign origin is comparable to that of a shareholder company that receives dividends of domestic origin, in so far as, in both cases, the profits made can, in principle, be subject to successive taxation'[23] (44). Furthermore, there is no doubt that A... is in a situation objectively comparable to that of a Portuguese taxpayer receiving dividends of Portuguese origin or from a Member State of the Union or the EEA. Consequently, a difference in treatment such as that resulting from the Portuguese legislation in question in the main proceedings constitutes a restriction prohibited by articles 34 of the EC-Tunisia Agreement and 31 of the EC-Lebanon Agreement"[24].
Article 89 of the agreement with Tunisia and article 85 of the agreement with Lebanon do not therefore put in question the freedom of movement of capital when direct investments are at issue, rather ensuring reciprocity in the protection of this freedom, in accordance with the spirit of the agreements themselves.
In accordance with this understanding, the Advocate General expressed the following opinion: "Consequently, I propose that the Court of Justice reply... that national legislation such as that in question in the main proceedings, which does not permit full or partial deduction, as the case may be, of dividends received from companies whose seat or place of effective management is outside the Union or the EEA, cannot be based on either article 89 of the EC-Tunisia Agreement or article 85 of the EC-Lebanon Agreement"[25].
1.6. Other Justifications
Having established that neither the safeguard clause contained in article 64 TFEU nor articles 89 of the agreement with Tunisia and 85 of the agreement with Lebanon have the effect of putting in question the free movement of capital relating to direct investments made in Tunisia and Lebanon, it remains to determine whether the reason invoked by the Tax Authority to justify the restriction on the free movement of capital under imperative reasons of general interest (article 65 TFEU) – specifically, facilitating tax controls – can or cannot be accepted. This justification was already accepted in relations between Member States in the celebrated case Futura participations[26]. However, whenever the argument of tax controls aims essentially at the difficulty in obtaining information and Member States are involved, this justification does not succeed, as Directive on information exchange 2011/16/EU[27] requires these States to cooperate with each other.
When third states are involved the situation has a different nature, first and foremost because these are not bound by that Directive, and therefore, as happened in a case with many affinities with what is being decided, the justification was accepted. In the judgment Skatteverket v A the Court of Justice decided "that, where the legislation of a Member State makes a tax advantage [exemption from income tax on dividends distributed in the form of shares of a subsidiary] conditional on requirements whose observance can only be verified by obtaining information from the competent authorities of a third country, that Member State may, in principle, refuse to grant that advantage if it is impossible to obtain such information from that third country, in particular where there is no conventional obligation for that country to provide information"[28].
In this regard, the Advocate General emphasizes that "[t]aking into account that it seems to me highly unlikely that the drafters of the EC-Tunisia and EC-Lebanon Agreements intended to grant total freedom to capital movements between the Union and those two countries while restrictions could be imposed on capital movements between the Member States or between the Member States and third countries, I consider that a restriction on the free movement of capital would not violate the EC-Tunisia and EC-Lebanon Agreements if it were justified by one of the imperative reasons of general interest (54), more precisely those to which the referring court refers [effectiveness of tax controls and the fight against tax fraud and evasion]"[29].
As regards at least Tunisia, however, there would be no problem in obtaining such information, given that Portugal has concluded with it a convention providing for exchange of information[30].
Regarding Lebanon, in fact, it would not be possible to obtain that information directly from its tax authorities. However, article 46 CIRC does not make the benefit of exemption from taxation of dividends depend on satisfaction of conditions whose observance can only be verified by obtaining information from the competent authorities of a third state[31]. It therefore cannot refuse to grant that benefit without giving the taxpayer the opportunity to provide the necessary information[32].
In the concrete case, however, this problem does not arise, as the Tax Authority does not allege that the grant of the benefit in question depends "on satisfaction of conditions whose observance can only be verified by obtaining information from the competent authorities of a third state"[33].
In the concrete situation, for the reasons set out, the justification presented relating to facilitation of tax controls would therefore not succeed, which is in full harmony with the position of the Advocate General who wrote: "In conclusion, the refusal of elimination or mitigation of economic double taxation by legislation such as that in question in the main proceedings cannot be justified by an imperative reason of general interest"[34].
***
In this manner, in light of what has been set out, the defect of violation of law alleged by the Claimant is well-founded, due to the incompatibility of article 46(1) CIRC with article 63 TFEU, insofar as it restricts the elimination of economic double taxation through the exemption of dividends to taxpayers resident in Portugal, Member States of the European Union or states of the EEA, with the consequent annulment of the tax acts subject to arbitral pronouncement.
Article 63 TFEU thus requires a Member State that applies a system of elimination of economic double taxation on dividends paid to residents by resident companies to provide equivalent treatment to dividends paid to residents by companies resident in Tunisia and Lebanon[35]. The prohibition set out by that article is clear and unconditional, requires no implementing measure and confers on individuals rights that they can invoke in court[36].
Consequently, the Tax and Customs Authority must refund the taxes collected in violation of European Union law[37].
In this regard, the Advocate General reaffirmed the rules resulting from the jurisprudence of the Court of Justice[38] saying: "It must be recalled, first of all, that '[i]t follows from settled case-law of the Court of Justice that the right to obtain the repayment of taxes levied in a Member State in violation of the rules of European Union law is the consequence and complement of the rights conferred on taxpayers by the provisions of European Union law which prohibit those taxes, as interpreted by the Court of Justice. The Member States are thus, in principle, obliged to repay taxes collected in violation of European Union law"[39].
V. DECISION
- On the main claim:
In light of the foregoing, the arbitrators of this Arbitral Tribunal agree on the merit of the challenge submitted by the Claimant, with the consequent annulment of the self-assessment relating to the fiscal year 2008, and with the consequent refund of taxes paid by the Claimant.
- On the request for indemnity interest:
The Claimant requests indemnity interest as a consequence of the annulment of the challenged assessment.
It results from the provisions of paragraph (b) of article 24 of the RJAT that the arbitral decision on the merits of the claim that is not subject to appeal binds the tax administration from the expiration of the period provided for appeal or challenge, and must this, in the exact terms of the merit of the arbitral decision in favor of the taxpayer, restore the situation that would exist if the tax act subject to arbitral decision had not been carried out.
It furthermore results from article 43(1) of the General Tax Law that "indemnity interest is due when it is determined, in an administrative complaint or judicial challenge, that there was error attributable to the services resulting in payment of the tax debt in an amount higher than legally due". Article 61(4) of the Tax Procedure Code further adds that "if the decision recognizing the right to indemnity interest is judicial, the period for payment begins from the beginning of the period for spontaneous performance".
And, according to superior case law, nor does it appear to depend on allegation of facts demonstrating verification of loss, as it is a fact that is self-evident, manifest and that results from mere deprivation of the amount paid unduly. – In this sense, see: Diogo Leite Campos, Benjamim Silva Rodrigues and Jorge Lopes de Sousa, "General Tax Law annotated and commented", 4th ed., in annotation to article 43, p. 342 et seq.; Jorge Lopes de Sousa, "Tax Procedure Code annotated and commented", Vol. I, in annotation to article 61, p. 470 et seq.; and also by the same Author, "On the Civil Liability of the Tax Administration for illegal acts – practical notes", áreas editora, 2010, p. 35 et seq.
Thus, article 43 of the General Tax Law "merely establishes an expedited and, so to speak, automatic means of indemnifying the injured party. Regardless of any allegation and proof of damages suffered, they have the right to the indemnity established there, expressed in indemnity interest in cases included in the provision (...)" – See Judgment of the Administrative Supreme Court of 2-11-2006, in case No. 604/06, available at www.dgsi.pt; see also Jorge Lopes de Sousa "On the Civil Liability of the Tax Administration for illegal acts – practical notes", áreas editora, 2010, p. 39 et seq.
In the case under consideration, the Claimant paid the amounts fixed under Corporate Income Tax and surcharge in the challenged assessment and now annulled by the present arbitral decision. The provision of paragraph 1 of article 43 of the General Tax Law appears to be verified.
This being stated, considering the grounds set out above that sustain the decision issued on the merits of the question, it is unequivocal that the taxation that resulted against the Claimant was due to error regarding the legal presuppositions, attributable to the services of the TA, which led to an incorrect application of the applicable law, national and Community, to the concrete case.
Consequently, the Claimant is entitled to indemnity interest, under article 43(1) and 100 of the General Tax Law and article 61 of the Tax Procedure Code, calculated from the date of payment of the annulled tax assessments, until the date of issuance of the respective credit note, with the period for such payment counted from the beginning of the period for spontaneous performance of the present decision (article 61(2-5) of the Tax Procedure Code), at the rate ascertained in accordance with article 43(4) of the General Tax Law.
The Advocate General expressed himself in this sense as well: "... the Court of Justice has already decided that, 'when a Member State has levied taxes in violation of the rules of European Union law, taxpayers have the right to repayment not only of the improperly levied tax but also of sums paid to that State or retained by it in direct relation with that tax. Accordingly, the Portuguese tax authorities must repay, with interest, to A... the amounts received in violation of articles 34 of the EC-Tunisia Agreement and 31 of the EC-Lebanon Agreement. These amounts correspond to the difference between the amount paid by A... and what it would have paid if the dividends received from B… and C… had been considered as paid by companies with seat or place of effective management in the territory of the Union or the EEA"[40].
- On the claim for reimbursement of costs incurred and to be incurred by the Claimant with attorneys' fees and expenses, as well as other expenses incurred with the present arbitration, all in an amount to be determined later.
Given the provisions of article 2 of the RJAT, which establishes the competence of arbitral tribunals in tax matters, this arbitral tribunal does not have competence to decide on such claim.
VI – DECISION
On the grounds of fact and law set out above, it is decided:
a) To dismiss the preliminary objections of material incompetence of this Tribunal and impropriety of the procedural means;
b) To uphold the main claim of the Claimant, declaring the illegality of the self-assessment act of Corporate Income Tax - €1,183,128.31 - and surcharge - €70,987.70 - which total taxation of €1,254,116.01;
c) To order the Tax and Customs Authority to refund the taxes paid by virtue of the aforementioned assessment;
d) To order the Tax and Customs Authority to pay indemnity interest at the legal default rate, from the collection of the revenue until its refund;
e) Not to decide on the claim for reimbursement of expenses incurred with the present arbitration, attorneys' fees and expenses, as such does not fall within the competence of this Tribunal, thus absolving the Tax and Customs Authority of this claim;
f) To consider the question of all subsidiary claims submitted by the Claimant as moot.
VII. VALUE OF THE CASE
The value of the case is fixed, in accordance with article 97-A of the Tax Procedure Code (applicable under article 29(1)(a) of the RJAT) and article 3(2) of the Regulation of Costs in Tax Arbitration Proceedings (RCPAT), at €1,254,116.01.
VIII. COSTS
In accordance with article 22(4) of the RJAT, the amount of costs is fixed at €17,136.00, in accordance with Table I attached to the Regulation of Costs in Tax Arbitration Proceedings, with 90% charged to the Tax and Customs Authority and 10% charged to the Claimant, given its partial non-success.
Lisbon, 15 July 2016.
The Arbitrators
José Baeta de Queiroz
(President)
João Sérgio Ribeiro
Luísa Anacoreta
Text prepared by computer, in accordance with article 138(5) of the Civil Procedure Code, applicable under article 29(1) of the RJAT.
[1] See Test Claimants in Class IV of The ACT Group Litigation, C-374/04, of 12 December 2006; Amurta, C-379/05, of 8 November 2007; Aberdeen Property Fininvest Alpha, C-303/07, of 18 June 2009.
[2] See Skatteverket v A, C-101/05, of 18 December 2007, no. 31.
[3] See Centro Equestre da Lezíria Grande, C-345/04, of 15 February 2007; Hollman, C-443/06, of 11 October 2007; Haribo, joined cases C-436/08 and C-437/08 of 10 February 2011, Arens-Sikken, C-43/07, of 11 September 2008; X and O, joined cases, C-155/08 and C-157/08, of 1 June 2009; Gaz de France, C-247/08, of 1 October 2009; European Commission v Portuguese Republic, C-267/09, of 5 May 2011.
[4] See European Commission v Portuguese Republic, C-171/08, of 8 July 2010, no. 49; Manfred Trummer and Peter Mayer, C-222/97, of 16 March 1999; Commission v. France, C-483/99, of 4 June 2002; Commission v. United Kingdom, C-98/01, of 13 May 2003; Commission v. Netherlands, joined cases C-282/04 and C-283/04, of 28 September 2006.
[5] In Test Claimants in the FII Group Litigation, C-35/11, of 13 November 2012, no. 103; Haribo, joined cases C-436/08 and C-437/08, of 10 February 2011, no. 33; Accor, C-310/09, of 15 September 2011, no. 30.
[6] In Test Claimants in the FII Group Litigation, C-35/11 of 13 November 2012, no. 104.
[7] See Sanz de Lera, C-163/94, of 14 December 1995.
[8] In Secil, C-446/14, opinion of Advocate General Melchior Wathelet, of 27 January 2016, no. 63.
[9] In Secil, C-446/14, opinion of Advocate General, no. 65.
[10] In Skatteverket v A, C-101/05, of 18 December 2007, no. 32.
[11] Haegeman v Belgium, C-181/73, of 30 April 1974.
[12] See Case Secil, C-446/14, opinion of Advocate General, nos. 112 and 113.
[13] In Secil, C-446/14, opinion of Advocate General, no. 151.
[14] Article 31(1) of the Vienna Convention on the Law of Treaties.
[15] See Simutenkov, C-265/03, of 12 April 2005, no. 21.
[16] In Secil, C-446/14, opinion of Advocate General, no. 83.
[17] See Emerging Markets Series of DFA Investment Trust Company, C-190/12, no. 48; see likewise in this sense, Test Claimants in the FII Group Litigation, C-446/04, no. 192, Holböck, C-157/05, no. 41 and A, C-101/05, no. 49.
[18] In Secil, C-446/14, opinion of Advocate General, no. 163.
[19] In line, moreover, with what exists in the field of the European Union. See D, C-376/03, of 5 July 2005.
[20] In Secil, C-446/14, opinion of Advocate General, nos. 86, 87 and 88.
[21] In Secil, C-446/14, opinion of Advocate General, nos. 89 and 90.
[22] See Schumacker, C-279/93, of 14 February 1995.
[23] See Test Claimants in the FII Group Litigation, C-35/11, no. 37. See likewise in this sense, Test Claimants in the FII Group Litigation, C-446/04, no. 62 and Haribo Lakritzen Hans Riegel and Österreichische Salinen (C-436/08 and C-437/08, EU:C:2011:61, no. 59.
[24] In Secil, C-446/14, opinion of Advocate General, nos. 94, 95, 109 and 110.
[25] In Secil, C-446/14, opinion of Advocate General, no. 96.
[26] C-250/95, of 15 May 1997.
[27] Council Directive of 15 February 2011 which replaced Council Directive 77/99/EEC, of 19 December 1977.
[28] In Skatteverket v A, C-101/05, of 18 December 2007, no. 63.
[29] In Skatteverket v A, C-101/05, of 18 December 2007, no. 125.
[30] See article 25 of the convention to eliminate taxation concluded between Portugal and Tunisia. See Skatteverket v A, C-101/05, of 18 December 2007, no. 67.
[31] See Secil, C-446/14, opinion of Advocate General, no. 130.
[32] See Secil, C-446/14, opinion of Advocate General, no. 135.
[33] In Secil, C-446/14, opinion of Advocate General, no. 132.
[34] In Secil, C-446/14, opinion of Advocate General, no. 136.
[35] See Test Claimants in the FII Group Litigation, C-35/11, of 13 November 2012, no. 38.
[36] See Sanz de Lera, C-163/94, of 14 December 1995, nos. 41 and 47.
[37] See Test Claimants in the FII Group Litigation, C-35/11, of 13 November 2012, no. 84.
[38] Nicula, C-331/13, no. 27, See likewise in this sense, San Giorgio, C-199/82, no. 12, Metallgesellschaft et al., C-397/98 and C-410/98, no. 84, Test Claimants in the FII Group Litigation, C-446/04, no. 202, Littlewoods Retail et al., C-591/10, no. 24, and Test Claimants in the Franked Investment Income Group Litigation (C-362/12, no. 30.
[39] In Secil, C-446/14, opinion of Advocate General, no. 138.
[40] In Secil, C-446/14, opinion of Advocate General, nos. 139, 142 and 143.
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