Process: 569/2015-T

Date: February 5, 2016

Tax Type: IRS

Source: Original CAAD Decision

Summary

This Portuguese tax arbitration case (Process 569/2015-T) involves a taxpayer challenging an official IRS assessment of €23,667.23 for the 2010 tax year. The dispute originated when the Tax Authority conducted an inspection procedure that identified discrepancies in the taxpayer's income declaration for 2010-2011, resulting in corrections to the reported taxable income. Following the inspection report's conclusions, an official assessment was issued. The taxpayer filed an administrative complaint (reclamação graciosa) under articles 68 et seq. of the CPPT and article 140 of the CIRS, which was rejected. Subsequently, the taxpayer sought tax arbitration at CAAD under Decree-Law 10/2011 (RJAT), requesting annulment of the assessment. The Tax Authority raised a preliminary procedural exception, arguing that the initial petition was inept due to unintelligibility of the claim under article 186(2)(a) of the Civil Procedure Code. The Tax Authority contended that the petition failed to clearly specify what defects were being attributed to either the rejected administrative complaint decision or the underlying assessment itself. The Authority emphasized that while the inspection report and administrative complaint decision provided detailed factual and legal grounds for the assessment corrections, the taxpayer's arbitration petition merely cited dispersed legal provisions without articulating concrete allegations of illegality. The case highlights the procedural requirements for challenging official tax assessments in Portugal, including the mandatory exhaustion of administrative remedies before seeking arbitration, and the need for clarity and specificity in pleadings when challenging tax determinations through the CAAD arbitration system.

Full Decision

ARBITRATION DECISION

I. REPORT

  1. A..., taxpayer no. ..., resident at ..., notified of the rejection of the administrative complaint (Case no. ...2014...) filed pursuant to articles 68 et seq. of the Code of Tax Procedure and Process (CPPT) and article 140 of the Personal Income Tax Code (CIRS), against the self-assessed income tax assessment (IRS) no. 2014..., relating to the year 2010, resulting from the account statement certification no. 2014..., in the total amount of €23,667.23 (twenty-three thousand, six hundred and sixty-seven euros and twenty-three cents), submitted on 01 September 2015 a request for the constitution of a single arbitration tribunal and for an arbitration ruling, pursuant to the combined provisions of articles 2 and 10, no. 2 of Decree-Law no. 10/2011, of 20 January (Legal Regime of Tax Arbitration, hereinafter designated only as "LRTA") and of articles 1 and 2 of Ordinance no. 112-A/2011, of 22 March, in which the Tax and Customs Authority (TA) is required, with a view to the declaration of illegality and consequent annulment of the said assessment act.

  2. The Claimant chose not to appoint an arbitrator.

  3. The request for the constitution of an arbitration tribunal was accepted by the President of CAAD and notified to the TA on 18 September 2015.

  4. The Signatory was appointed by the President of the Ethics Council of CAAD as arbitrator of a single arbitration tribunal, pursuant to the provisions of article 6 of the LRTA, and the acceptance of the assignment was communicated within the applicable deadline.

  5. On 04 November 2015, the Parties were notified of this appointment, having not objected to it, pursuant to the combined provisions of article 11, no. 1, paragraphs a) and b) of the LRTA and articles 6 and 7 of the Code of Ethics of CAAD.

  6. Thus, in accordance with the provisions of paragraph c) of no. 1 of article 11 of the LRTA, the single arbitration tribunal was constituted on 17 November 2015.

  7. The Respondent was notified, by arbitral order of 17 November 2015, to, pursuant to article 17, no. 1 of the LRTA and within 30 days, submit a response and, if it so wished, request the production of additional evidence.

  8. On 14 December 2015 the Respondent submitted to the record a copy of the administrative file on which the assessment act was based.

  9. And on 16 December 2015 it submitted its response, invoking, pursuant to paragraph a), no. 2, article 186 of the Civil Procedure Code (CPC), applicable ex vi of paragraph e), no. 1, article 29 of the LRTA, the dilatory exception of ineptness of the initial petition due to unintelligibility of the claim, arguing for dismissal of the case.

  10. Or, if that were not accepted, the complete rejection of the request for an arbitration ruling.

  11. Further requesting the waiver of the meeting referred to in article 18 of the LRTA.

  12. Considering that the Parties did not request the production of any evidence and that the response to the exception invoked by the Respondent could be made in the arguments, as per no. 4 of article 3 of the CPC, the Arbitration Tribunal, in light of the principles of autonomy in the conduct of proceedings, expedition, simplification and procedural informality, inherent in no. 2 of articles 19 and 29 of the LRTA, by order of 17 December 2015, waived the holding of the meeting provided for in article 18 of the same provision, and further decided that the proceedings continue with optional written arguments, to be submitted successively by the Respondent.

  13. The date of 10 March 2016 was further set for the delivery of the respective final arbitration decision.

  14. The Parties were notified of this order on 18 December 2015, and duly submitted their arguments.

  15. To these, the Claimant attached a document (certificate issued by the Tax Office of ..., on 05/01/2016).

II. PRELIMINARY HEARING

  1. The Parties have legal personality and capacity, are legitimate (articles 4 and 10, no. 2 of the LRTA and article 1 of Ordinance no. 112-A/2011, of 22 March) and are duly represented.

  2. The Arbitration Tribunal is regularly constituted and is materially competent to hear and decide on the claim, cf. article 2, no. 1, paragraph a) of the LRTA.

  3. The proceedings do not suffer from any nullities.

  4. In its defence, the Respondent, by way of exception, raises the ineptness of the initial petition due to unintelligibility of the claim, in accordance with the provisions of paragraph a), no. 2, article 186 of the CPC, applicable ex vi of paragraph e), no. 1, article 29 of the LRTA, in the following terms:

a) "As results from the external inspection procedure (III.1), carried out next to the PA, the Claimant had already filed an administrative complaint (with no. ...2012...), as a consequence of which an inspection procedure was opened for the years 2010 and 2011" (article 2 of the Response).

b) "The final report, issued in the context of the inspection action, proposes, with the grounds contained therein, which are here deemed to be fully reproduced, the alteration of taxable income for the years 2010 and 2011" (article 3).

c) "Dissatisfied with the assessment for the year 2010, resulting from the conclusions of the inspection report, the taxpayer filed the administrative complaint, whose decision it now challenges" (article 6).

d) "However, it cannot truly be discerned what defects are attributed to it, and therefore the petition is inept, due to unintelligibility of the claim, which is here raised for all legal purposes, pursuant to paragraph a) of no. 2 of article 186 of the CPC" (article 7).

e) "It is wholly incomprehensible what the Claimant intends to argue" (article 8).

f) "Is the Claimant trying to say that the tax administration is prevented from opening an internal inspection procedure, and that this prevention arises from the taxpayer having previously filed an administrative complaint?" (article 9).

g) "The enumeration of dispersed articles of the tax legal system is wholly inapplicable to the case, and it seems the Claimant merely relies on the allegation that the TA cannot correct the declarations of taxpayers, not even as a consequence of an inspection action" (article 10).

h) "One would think that the inspection procedure would have as its sole objective to validate the declarations of taxpayers, such that, in the face of any irregularity therein, the TA would be prevented from proceeding with self-assessments or additional assessments!" (article 11).

i) "As has been said, the reasons that led to its opening as well as the grounds for the corrections proposed therein clearly result from the inspection procedure and its respective report, which is hereby deemed to be fully reproduced, and which culminated in the assessment of which the Claimant complained and against the decision of which it hereby reacts" (article 13).

j) "Thus, as ineluctably result from the decision on the administrative complaint, issued on 06/05/2015, which confirms the draft decision of 25/3/2015, which are hereby deemed to be fully reproduced, the factual and legal grounds of the contested assessment" (article 14).

k) "What is revealed as omitted and does not result from the taxpayer's submission is precisely what defects it attributes to the decision rejecting the administrative complaint!" (article 16).

l) "Moreover, at no point in the submission does the Claimant attribute any defect to the assessment it intended to challenge here sub judice" (article 17).

m) "Wherefore, in view of the unintelligibility of the claim and the lack of foundation of the submission, the contested decision should be upheld" (article 18).

  1. In its arguments, the Respondent reiterates everything it has argued in its defence, arguing for the acceptance of the exception invoked (ineptness of the initial petition due to unintelligibility of the claim) or, if that is not accepted, for the rejection of the request for an arbitration ruling, with the consequent dismissal of the case.

  2. Because the preliminary issue may constitute an obstacle to the examination of the merits of the case, it should be examined as a priority.

  3. Pursuant to paragraph a), no. 2, article 186 of the CPC, a petition is deemed inept when the indication of the claim or the cause of action is lacking or unintelligible.

  4. The latter is understood as the legal fact upon which the plaintiff's claim depends (no. 4 of article 581 of the CPC).

  5. The unintelligibility of the cause of action consists in its indication in terms that are truly obscure or ambiguous, in such a way that it is not possible to know, concretely and precisely, on what basis the claim is formulated.[1]

  6. Thus, it is from the content of the initial petition that its ineptness with regard to the cause of action (lack or unintelligibility) is assessed, and not from the defendant's understanding of its viability.[2]

  7. The ineptness of the initial petition due to unintelligibility of the cause of action only occurs when the facts are exposed in such a manner that it is impossible, or at least reasonably impossible to require, to determine the essential core and meaning of the cause of action.[3]

  8. This understanding leads to the conclusion that a petition is deemed inept due to unintelligibility when the facts and the conclusion are exposed in such a confused, obscure or ambiguous manner that it is not possible to ascertain what the claim or the cause of action is.

  9. Thus, the petition will be inept due to unintelligibility when it is not possible to know what the claim or the cause of action is, which is manifestly not the case.

  10. Indeed, having examined the initial petition, we verify that, effectively, there is a cause of action, and, as Anselmo de Castro refers,[4] "in order for ineptness to be ruled out, it is required only that sufficient facts be indicated to individualize the legal fact generating the cause of action and the immediate and mediate object of the action. Indeed, the law (...) only declares a petition inept when the indication of the claim or the cause of action is lacking or unintelligible, which immediately conveys the idea of the unnecessary need for a complete and exhaustive formulation of one and the other element".

  11. The Claimant states in its initial petition:

a) "What the Claimant cannot accept is that, without any order from a competent authority, the services made use of information provided for the purpose of assessing an administrative complaint, for the drawing up of an official statement which gave rise to an IRS assessment in the amount of €27,893.96" (article 13 of the arbitration claim).

b) "That is, conversely, the administrative complaint procedure cannot serve for the TA to proceed with self-assessments in favour of the tax administration" (article 15).

c) "Because based on the information that was sent to it, the services could only reject the administrative complaint submitted" (article 16).

d) "And could, at most, which did not happen, proceed, on the basis of that information, to alter the elements contained in the official statement that had given rise to the administrative complaint" (article 17).

e) "And not on the basis of the provisions of no. 4 of article 65 which provides that the TA 'proceeds to alter the declared elements when, there being no place for the fixation referred to in no. 2, corrections arising from errors evidenced in the declarations themselves, omissions therein or corrections arising from divergence in the classification of acts, facts or documents relevant to the assessment of tax must be made'" (article 19).

f) "Since in that provision, the use of such mechanism is only foreseen for the correction of taxpayers' declarations" (article 20).

g) "When what was at issue was the correction of an official statement of the services" (article 21).

h) "Correction which could only be made on the basis of article 78 of the GTL, which provides that the revision of tax acts, by the entity that carried them out, may be made by the initiative of the taxpayer, within the deadline for administrative complaint and on the ground of any illegality, or, by the initiative of the tax administration, within a period of 4 years or at any time if the tax has not yet been paid, on the ground of error imputable to the services" (article 34).

i) "Now, since it is not possible to correct the official statement that gave rise to the first administrative complaint on the basis of no. 4 of article 65 of the CIRS, it could only be made (...) on the basis of the provisions of article 78 of the General Tax Law, with the authorization of the head of the service, which was not effected" (article 38).

j) "Tax act which would have to be reasoned, as provided by article 77 of the GTL, made by an entity with competence to do so and notified to the interested party before the collection of the official statement that gave rise to the contested assessment, under penalty of ineffectiveness, as provided by no. 6 of the same article 77 of the GTL" (article 39).

k) "Having therefore been committed an illegality subject to voidability" (article 41).

  1. In summary, the cause of action is embodied in the following facts:

  2. The administrative complaint procedure cannot serve for the Tax Authority to proceed with self-assessments in its favour;

  3. The contested assessment could not be based on no. 4 of article 65 of the CIRS, but rather on article 78 of the General Tax Law, with the authorization of the head of the service, since the correction of the official statement that gave rise to the first administrative complaint (Case no. ...2012...) had already been made on the basis of that provision (no. 4 of article 65 of the CIRS); and

  4. The tax act was made by an entity without competence to do so, was not notified to the interested party before the collection of the official statement and lacks reasoning.

  5. Based on the foregoing, the Arbitration Tribunal concludes that the initial petition is not inept.

  6. Accordingly, the invoked exception of ineptness of the initial petition due to unintelligibility of the cause of action is deemed without merit.

III – MERITS

Factual Matters

  1. Facts Established

With relevance to the assessment and decision of the issues raised, both preliminary and on the merits, the following facts are deemed established and proven:

a) The Claimant, on 04-06-2011, submitted the IRS form 3 declaration, relating to the year 2010, in which it stated the following gross business and professional income (Category B):

Sales ........................... €84,955.00
Service provision ................. €37,560.00
TOTAL ........................... €122,515.00

b) In light of discrepancies between these amounts and those determined in the periodic declarations submitted for VAT purposes, the following alterations were made, pursuant to no. 4 of article 65 of the CIRS:

Sales ........................... €151,125.00
Service provision ................. €37,560.00
TOTAL ........................... €188,685.00

c) On 06-01-2012 self-assessment no. 2012... was made, which was subject to an administrative complaint (Case no. ...2012...).

d) By order of 30-08-2013 of the Head of Ancillary Finance of the Tax Office of..., acting under delegated authority by order no. .../2012, published in the Official Gazette, 2nd series, no. ... of 07-05-2012, the said administrative complaint was rejected.

e) Pursuant to service order no. OI2013..., of 07-06-2013, an internal inspection procedure was conducted, whose acts began on 22-01-2014 and ended on 29-04-2014.

f) This action had as its main objective to correct the Claimant's declarative situation, as a result of the elements ascertained in the analysis made of the administrative complaint (Case no. ...2012...).

g) As a result of the diligences and collection of elements carried out in the context of this inspection action, by order of the Director of Finance of..., of 05-05-2014, issued in accordance with the provisions of no. 4 of article 65 of the CIRS, the following elements contained in the aforementioned IRS form 3 declaration (year 2010) of the Claimant were again altered:

Sales ........................... €0.00
Service provision ................. €188,685.00
TOTAL ........................... €188,685.00

h) The said order as well as the final report referred to in article 62 of the Supplementary Rules of Tax and Customs Inspection Procedure (SRTCIP), which contains the grounds for the said alterations, were notified on 26-05-2014, pursuant to no. 6 of article 39 of the CPPT, through official letter no. ... of the Finance Department of ...(Taxation and Collection Division), of 21-05-2014.

i) On 03-06-2014 self-assessment no. 2014... was made, which is here in dispute, and which was subject to an administrative complaint (Case no. ...2014...).

j) This was rejected by order of the Director of Finance of..., of 06-05-2015.

k) Which was notified to the Claimant on 20-05-2015, through official letter no. ... of the Tax Justice Division of the same finance department, of 12-05-2015.

  1. Facts Not Established

There are no facts relevant to the decision of the case that have not been established.

  1. Basis for the Establishment of Factual Matters

The facts were established on the basis of a copy of the administrative file, which the Respondent submitted pursuant to no. 2 of article 17 of the LRTA.

Legal Matters

  1. On the Illegality of the Contested Assessment

Facts referred to in 16.1 of Part II

  1. The contested assessment was based on the internal inspection procedure carried out pursuant to service order no. OI2013..., of 07-06-2013, whose acts began on 22-01-2014 and ended on 29-04-2014.

  2. As stated in the final report, of 29-04-2014, provided for in article 62 of the Supplementary Rules of Tax and Customs Inspection Procedure (SRTCIP), approved by article 1 of Decree-Law no. 413/98, of 31-12, the said action had as its main objective to correct the Claimant's declarative situation, as a result of the elements ascertained in the analysis made of the administrative complaint filed under Case no. ...2012..., with a view to the assessment of the tax(es) that should be assessed.

  3. Indeed, pursuant to no. 1 of article 59 of the CPPT, the assessment procedure is instituted with the declarations of taxpayers, or, in the absence or defect thereof, on the basis of all elements available to or obtained by the competent authority.

  4. Article 59, no. 7, further provides that "Whenever the competent authority becomes aware of tax facts not declared by the taxpayer and of the necessary probative support, the assessment procedure is instituted officially by the competent services".

Thus, the request for an arbitration ruling does not succeed on this issue, since the contested assessment was based on the final report of the Tax Inspection.

Facts referred to in 16.2 of Part II

  1. Pursuant to no. 4 of article 65 of the CIRS, the Tax and Customs Authority (TA) proceeds to alter the declared elements whenever, in the absence of the fixation referred to in no. 2, corrections arising from errors evidenced in the declarations themselves, omissions therein or corrections arising from divergence in the classification of acts, facts or documents relevant to the assessment of tax must be made.

  2. Thus, whenever the elements declared by the taxpayer diverge, downwards, from those obtained by the TA, the resort by the latter to the mechanism of alteration of income, provided for in the said no. 4 of article 65 of that code, is legitimate.

  3. The revision of tax acts provided for in article 78 of the GTL can be made both in favour of the taxpayer and in favour of the tax administration.[5]

  4. However, as the same authors refer,[6] "(...) in cases where the revision is made in favour of the tax administration and the act to be revised is an assessment act, there is not properly a revision of the previous act, which remains valid, but merely the making of a new act in which additional tax is assessed if understood to be lacking".

  5. And this is, truly, the situation we have been dealing with.

  6. Indeed, having the Claimant declared income in the amount of €122,515.00, which diverged downwards from that declared for VAT purposes (€188,685.00), the same was altered pursuant to no. 4 of article 65 of the CIRS.

  7. Subsequently, more precisely on 05-05-2014, and in light of the elements collected in the context of the inspection action, according to which the Claimant's income corresponded, in its entirety, to services provided and not also to sales, it was again altered pursuant to the same legal provision (no. 4 of article 65 of the CIRS).

Also regarding this issue, the request for an arbitration ruling cannot succeed, since the provision to be invoked was the most appropriate, and could even be so as many times as necessary, provided that the temporal limit provided for in article 45 of the GTL is not exceeded.

Facts referred to in 16.3 of Part II

  1. Finally, it should be noted that the tax act (alteration of taxable income) was made by the competent authority, that is, the Director of Finance of..., cf. no. 5 of the said article 65 of the CIRS.

  2. And on a date prior (05-05-2014) to that of the assessment of the tax (03-06-2014).

  3. It being sufficiently reasoned, by express reference to the information of the Tax Inspection Service of the Finance Department of..., attached to the respective notification letter.

  4. Indeed, as stated in the judgment of the SAC of 12-03-2014 (Case no. 01674/13), "The Tax Administration has the duty to reason the contested assessment acts in accordance with the principle set out in article 268 of the Constitution of the Portuguese Republic and taken up in articles 125 of the APA and 77 of the GTL.

The act shall be sufficiently reasoned when the addressee, placed in the position of a normal recipient – the bonus pater familiae referred to in article 487, no. 2 of the Civil Code – can come to know the factual and legal reasons that are at its genesis, so as to enable him to choose, in an informed manner, between the acceptance of the act or the activation of the legal means of challenge, and in such a way that, in the latter circumstance, the court can also exercise the effective control of the lawfulness of the act, assessing its legal correctness in light of its contextual reasoning.

This means that the reasoning, even if made by reference or in a very synthetic manner, cannot fail to be clear, congruent and must contain the aspects, of fact and of law, which permit understanding of the cognitive and evaluative path pursued by the Administration in the determination of the act".

  1. The said order as well as the final report referred to in article 62 of the SRTCIP, which contains the grounds for the said alterations, were notified to the Claimant on 26-05-2014, pursuant to no. 6 of article 39 of the CPPT, through official letter no. ... of the Finance Department of ...(Taxation and Collection Division), of 21-05-2014.

  2. Regarding merely preparatory, internal acts not externalized, this Tribunal is of the view that it should not take knowledge thereof, especially as no consequences for the Claimant are envisaged.

Also regarding this issue, the request for an arbitration ruling does not succeed.

V – DECISION

Based on the foregoing, it is decided:

· To judge the dilatory exception of ineptness of the initial petition due to unintelligibility of the cause of action as without merit; and

· To judge the request for a declaration of illegality of the additional personal income tax assessment no. 2014..., resulting from the account statement certification no. 2014..., relating to the financial year 2010, as without merit and, in consequence, to maintain the said act in the legal order.

Value of the Proceedings

In accordance with the provisions of article 306, no. 2, of the CPC, 97-A, no. 1, paragraph a), of the CPPT and 3, no. 2, of the Rules of Costs in Tax Arbitration Proceedings, the value of the proceedings is set at €23,667.23.

Costs

Pursuant to article 22, no. 4, of the LRTA, the amount of costs is set at €1,224.00, in accordance with Table I attached to the Rules of Costs in Tax Arbitration Proceedings, to be borne by the Tax and Customs Authority.

Let it be notified.

Lisbon, 05-02-2016

The Arbitrator,

(Rui Ferreira Rodrigues)

Document prepared by computer, pursuant to the provisions of article 131, no. 5, of the CPC, applicable by reference from article 29, no. 1, paragraph e), of the LRTA.

The drafting of this decision follows the old orthography.

[1] Ruling Summary of the Supreme Court of Justice, of 15-01-2003 (Case 02S3301)

[2] Ibid.

[3] Ruling Summary of the Court of Appeal of Porto of 16-06-2009 (Case no. 4541/06.8TBVNG.P1)

[4] In Civil Declaratory Procedural Law, vol. II, p. 221

[5] Diogo Leite de Campos and others in "General Tax Law", annotated and commented, 4th Edition 2012, Encontro de Escrita Publisher, pp. 706/707.

[6] Ibid.

Frequently Asked Questions

Automatically Created

What is an official IRS tax assessment (liquidação oficiosa) in Portuguese tax law?
An official IRS tax assessment (liquidação oficiosa) in Portuguese tax law is a tax determination made directly by the Tax Authority rather than through taxpayer self-assessment. This typically occurs following a tax inspection procedure when the Authority identifies errors, omissions, or discrepancies in the taxpayer's income declaration. Under article 140 of the CIRS (Personal Income Tax Code), when the Tax Authority determines that declared income needs correction based on inspection findings, it issues an official assessment calculating the correct tax liability. In this case, the official assessment resulted from an inspection report that proposed alterations to the taxpayer's declared taxable income for 2010-2011, leading to an additional tax liability of €23,667.23 for the 2010 tax year.
Can a taxpayer challenge an IRS official assessment through tax arbitration at CAAD?
Yes, a taxpayer can challenge an IRS official assessment through tax arbitration at CAAD (Centro de Arbitragem Administrativa - Administrative Arbitration Center), but only after exhausting administrative remedies. Under Decree-Law 10/2011 (RJAT - Legal Regime of Tax Arbitration), article 10(2), taxpayers may submit arbitration requests against tax assessments following rejection of an administrative complaint. The process requires: (1) first filing a reclamação graciosa (administrative complaint) under articles 68 et seq. of the CPPT; (2) waiting for the decision on that complaint; and (3) only after rejection, filing for tax arbitration within the applicable deadline. In this case, the taxpayer properly followed this procedure by first filing administrative complaint no. ...2012... and then, after its rejection, submitting the arbitration request on September 1, 2015.
What happens when a taxpayer's gracious complaint (reclamação graciosa) against an IRS assessment is denied?
When a taxpayer's gracious complaint (reclamação graciosa) against an IRS assessment is denied, the taxpayer has the right to seek judicial review through two alternative paths: (1) tax arbitration at CAAD under the RJAT (Decree-Law 10/2011), or (2) judicial appeal to the administrative and tax courts. In this case, following rejection of administrative complaint no. ...2014... on June 5, 2015, the taxpayer opted for arbitration, filing the request on September 1, 2015. The arbitration request must specify the grounds for challenging the assessment and seek declaration of illegality and annulment of the contested tax act. The request triggers the constitution of an arbitration tribunal, notification to the Tax Authority, and a structured procedural framework including the Authority's response, optional evidence production, and written arguments before a final decision.
What are the grounds for declaring the illegality and annulment of an IRS tax liquidation in Portugal?
The grounds for declaring illegality and annulment of an IRS tax liquidation in Portugal include: (1) substantive errors in determining taxable income or applying tax law; (2) procedural violations in the assessment process, including inspection procedures; (3) lack of legal basis or competence for the assessment; (4) violation of taxpayer rights, including rights to be heard; (5) errors in fact-finding or evidence evaluation; (6) incorrect legal interpretation; and (7) violation of fundamental tax principles such as legality, equality, or proportionality. However, as this case illustrates, taxpayers must clearly articulate specific defects in their arbitration petitions. The Tax Authority argued that merely citing legal provisions without explaining how they were violated, or failing to identify concrete illegalities in the assessment, constitutes unintelligibility of the claim under article 186(2)(a) of the Civil Procedure Code, potentially resulting in dismissal.
What is the procedure for requesting a single arbitrator tribunal under the RJAT (Decree-Law 10/2011)?
The procedure for requesting a single arbitrator tribunal under the RJAT (Decree-Law 10/2011) involves several steps: (1) Submit a written arbitration request to CAAD identifying the contested tax act, the legal grounds, and the relief sought (article 10); (2) The taxpayer may choose to appoint an arbitrator or allow the President of CAAD to appoint one (article 6); (3) CAAD's President accepts the request and notifies the Tax Authority (article 10(4)); (4) If no arbitrator was chosen, the President of the Ethics Council appoints one (article 6); (5) Parties are notified and have the right to object to the appointment within the legal deadline (article 11(1)); (6) The tribunal is constituted after the objection period expires (article 11(1)(c)); (7) The Tax Authority is ordered to file a response within 30 days (article 17(1)); (8) Parties may request evidence production and submit written arguments; and (9) The arbitrator issues a final decision within the statutory timeframe. In this case, the tribunal was constituted on November 17, 2015, with a decision deadline of March 10, 2016.