CAAD 576/2016-T: Can SIFIDE Credits Be Deducted From Autonomous Taxation Under IRC?

ARBITRAL DECISION

I. REPORT

1. A…, S.A., (hereinafter referred to as the "Applicant"), corporate entity no.…, with registered office in …–…, …-… Maia, has, under the terms of item a) of no. 1 of article 2 and articles 10 and following of Decree-Law no. 10/2011, of 20 January, submitted a request for arbitral pronouncement against the act of dismissal of the request for official review of the tax act of assessment of Corporate Income Tax (IRC) relating to the taxation period of 2012, submitted on 29 March 2016;

2. The Respondent is the TAX AUTHORITY AND CUSTOMS AUTHORITY (hereinafter referred to as "TA" or "Respondent")

3. The request for constitution of the arbitral tribunal was accepted by His Excellency the President of CAAD and was automatically notified to the Tax Authority and Customs Authority on 10-10-2016.

4. Given that the Applicant did not proceed with the appointment of an arbitrator, under the terms of article 6, no. 2, item a) of the RJAT, the undersigned was designated as arbitrator by the President of the Deontological Council of CAAD, and the appointment was accepted within the legally prescribed timeframe and terms.

5. On 23-11-2016 both Parties were duly notified of this appointment and expressed no intention to refuse the appointment of the arbitrator, under the terms of article 11, no. 1, items a) and b) of the RJAT, together with articles 6 and 7 of the Deontological Code.

6. In accordance with the provision of item c) of no. 1 of article 11 of the RJAT, the Singular Arbitral Tribunal was constituted on 12-12-2016.

7. The Applicant, in the request for constitution of the arbitral tribunal presented by it, invoked, in summary, the following:

a) It is today peacefully acknowledged, both by doctrine and jurisprudence, that although autonomous taxation contains some particularities compared to the general regime, autonomous taxation is a component of IRC;

b) The autonomous taxation mechanism merely reflects an aggravated rate within the taxation of corporate income operated by IRC, without the consequences that TA intends to draw therefrom;

c) Article 90, no. 1 of the CIRC is applicable to the assessment of autonomous taxation;

d) Since autonomous taxation is IRC – assessed on the basis of no. 1 of article 90 of the CIRC – the amounts corresponding to SIFIDE may be deducted therefrom, based on item b) of no. 2 of the same article of the CIRC;

e) Terms in which the Applicant requests the annulment of the dismissal order of the request for official review submitted and, likewise, the declaration of the entire illegality of the tax act of IRC self-assessment in question;

f) The Applicant further requests the reimbursement of the tax unduly paid, plus compensatory interest.

1. The Respondent presented a Reply, in which it defends itself both by exception and by objection.

2. The exception raised by the Respondent is that of "material incompetence of the arbitral tribunal arising from the circumstance that the request for arbitral pronouncement was formulated following dismissal of a request for official review", which is founded, in summary, on the following grounds:

a) The request for arbitral pronouncement sub judice is formulated following dismissal of a request for official review of the act of self-assessment of corporate income tax (IRC) relating to the year 2012, formulated on 29.03.2016, that is, in circumstances of time when the timeframe for the gracious objection to which article 131 of the CPPT refers had already elapsed;

b) Having regard to the provisions of articles 2, no. 1, item a) and 4, no. 1, both of the RJAT, and articles 1 and 2, item a) both of Regulation no. 112-A/2011, of 22 March, the exception of material incompetence of the present Arbitral Tribunal to hear and decide the above request is verified, a circumstance that requires the determination of the absolution of the Defendant Entity from the Instance [cf. articles 576, nos 1 and 2 and 577, item a) of the Code of Civil Procedure, by virtue of article 29, no. 1, items a) and e) of the RJAT].

1. In the defense by objection, the Respondent sustains, in the sense of the non-merit of the request for arbitral pronouncement, in summary, the following:

a) The figure of autonomous taxation has been instrumentalized for the pursuit of diverse objectives, encompassing from the original purpose of preventing practices of tax evasion and fraud, to the purpose of preventing the phenomenon designated as "dividend washing" (cfr. no. 11 of art. 88 CIRC) or of imposing, through tax, the payment of income considered excessive (cfr. no. 13 of the same provision);

b) The autonomous character of these taxation, arising from the special configuration given to the material and temporal aspects of the taxable events, imposes, in certain domains, the removal or an adaptation of the general rules of application of IRC;

c) The integration of autonomous taxation into the IRC Code (and the IRS Code), conferred a dualistic nature, in certain aspects, to the normative system of this tax, which was embodied, namely, in the context of item a) of no. 1 of article 90 of the CIRC, in separate calculations of the respective collections, as they are subject to different rules;

d) And this, because, in one case, it is the application of the rate(s) of art. 87 of the CIRC to the taxable matter determined according to the rules contained in chapter III of the Code and, in another case, it is the application of the rates to the values of the taxable matters relating to the different realities contemplated in art. 88 of the CIRC;

e) That is, there is not a single assessment of IRC, but rather two separate calculations;

f) The amount calculated according to item a) of no. 1 of art. 90 does not have a unitary character, as it contains values calculated according to different rules, to which differentiated purposes are also associated, so that the deductions provided for in the items of no. 2 may only be made to the part of the IRC collection with which there is a direct correspondence, so as to maintain the coherence of the conceptual structure of the tax's rule-regime;

g) That is, in global terms, the IRC collection calculated according to art. 89 and no. 1 of art. 90 has a composite nature, divisible, on the one hand between the tax collection proper, resulting from the general structure of IRC calculation, which is due on the basis of a constitutional foundation based on the general duty of each one (including corporate entities) to contribute to public expenditure according to their means (Art. 103, no. 1 of the CRP), from which the amounts referred to in no. 2 of art. 90 are deducted, under the terms and manner referred therein and, on the other hand, the sum of the collections of autonomous taxation which incorporate their own sense and foundations and which, for this reason, should not be subject to confusion;

h) In the same way that support is found in the letter and in the ratio of the law to coherently conclude that SIFIDE should not be deducted from the amounts of the collections of autonomous taxation, substantively also reasons are detected to conclude that fiscal benefits, among them SIFIDE, cannot be deducted from the same collections;

i) The common feature to all realities reflected in the deductions referred to in no. 2 of art. 90 of the CIRC resides in the fact that they concern income or expenses incorporated in the taxable matter determined on the basis of the taxpayer's profit or advance payments of the tax, and are therefore completely foreign to the realities that make up the taxable events of autonomous taxation;

j) With regard to the deduction relating to tax benefits (item b) of no. 2 of art. 90), when it comes to benefits for investment – as is the case with SIFIDE – the underlying philosophy is that the benefit constitutes a prize whose scope varies with the profitability of investments, because the higher the profit/taxable matter of IRC, the greater the capacity to make the deduction;

k) There is, therefore, an indissociable link between the amount of the tax credit for investment and the part of the IRC collection calculated on the taxable matter based on profit and, if not so, the necessary articulation that, on the substantive level, must exist between the objectives pursued by tax benefits and their impact on the very quantity that serves as the basis for calculating the taxable matter and the collection – the profit – would be subverted;

l) Any interpretation that does not apply the norm contained in the State Budget Law for 2016, set out in article 133, which added no. 21 to article 88 of the CIRC, with the effects provided for in article 135, both contained in the State Budget Law for 2016, published on 30.03.2016, entering into force on the following day, in which it is advocated, with an interpretative character, and which, consequently, permits the deduction to the part of the IRC collection produced by autonomous taxation rates of tax benefits – in this case, SIFIDE – is materially unconstitutional, because: i) violation of the principle of legality, inherent in art. 103, no. 2 of the CRP; ii) violation of the principle of separation of powers, embodied in art. 2 of the CRP; iii) violation of the principle of protection of legitimate expectations provided for in art. 2 of the CRP; iv) violation of the principle of equality, in its positive formulation of contributive capacity, arising from art. 13, no. 2 and 103, no. 2 both of the CRP;

m) Although art. 10 of the EBF admits extensive interpretation and prohibits analogy in the interpretation of norms on tax benefits, it does not prohibit the use of restrictive interpretation and, for this very reason, in objectively justified situations its use is not excluded;

n) Not being verified, in the present proceedings, error imputable to the services in the assessment of the tax, no right to compensatory interest should be recognized to the Applicant.

1. The Applicant made a written statement, in exercise of the right to due process, on the exception invoked by the Respondent, sustaining, in summary, the following:

a) The Applicant requested from TA the reimbursement of the tax (IRC) paid in excess, corresponding to the value of autonomous taxation of the period in question and which was not offset through compensation with amounts relating to tax benefits available for deduction, as well as the payment of compensatory interest at the legal rate. It did so under article 78 of the General Tax Law, through a request for official review;

b) Subsequently, through Information no. …-AIR …/2016, TA expressly dismissed the claim formulated by the Applicant, which it did through integral adherence to the content it had previously set out in the draft decision, notified to the latter through Office no. … 16.06.16;

c) By the above, it is unquestionable that, underlying the request for arbitral pronouncement, we have:

i) An express act of dismissal in tax matters, for in it the application of norms of fiscal law is made;

ii) That such express act of dismissal implied an appreciation of the legality of the underlying self-assessment act, and a concomitant decision on the merits thereof; and

iii) That that same express act of dismissal embodies an administrative act in light of the definition advanced by article 148 of the Administrative Procedure Code, insofar as it is asserted as a decision, rendered in the exercise of administrative-legal powers, destined to produce external legal effects in an individual and concrete situation.

d) No doubts arise as to the material competence of the Arbitral Tribunal to know of the merits of the present request, not least in light of the jurisprudence established within the scope of CAAD itself;

e) As the most experienced doctrine rightly notes, whenever the request for review of the tax act has as its object an assessment act – as happens in the present situation – that is, in the image of the gracious objection, an administrative means of impugnation of an act of that type, and may naturally be grounded in grounds identical to those that may base the aforementioned gracious objection;

f) Since, in the present situation, the review act has as its object an assessment act, it must be concluded that that [review act] inevitably falls within the scope of the gracious objection; precisely that to which TA alludes in its defense.

1. By order of 13-02-2017, considering that, given that exceptions had been raised, the Applicant had already made a written statement on the same, and that there is only controversy on matters of law, this Tribunal dispensed with the holding of the meeting provided for in article 18 of the RJAT, in application of the principles of autonomy in case management, celerity, simplification and procedural informality, and decided further:

a) not to admit the production of testimonial evidence, considering that no disputed facts susceptible to testimonial evidence are identified, resulting in its uselessness for the object of the proceedings [cfr. articles 16, items c) and e) and article 19/1 of the RJAT and 6 and 130 of the CPC, applicable by virtue of article 29 of the RJAT];

b) Determine that the proceedings continue with optional written submissions, to be presented by the Parties within the simultaneous period of 20 days, as provided for in article 91, no. 5 of the CPTA, applicable by force of the provision of article 29, no. 1, item c) of the RJAT.

1. The Applicant presented final submissions, with the following conclusions:

a) The thema decidendum relates to the possibility of the Applicant being able to use values relating to SIFIDE, which ceased to be deducted due to alleged insufficiency of IRC collection, against the portion of the collection that includes autonomous taxation, insofar as these are, also, Corporate Income Tax;

b) The Applicant thus understands, in the terms more fully detailed in the PPA, that it should be reimbursed the amount of € 35,336.16, corresponding to the autonomous taxation assessed by it in the exercise in question and which should be consumed by the amount of available and unused SIFIDE;

c) It is today peacefully acknowledged, both by doctrine and jurisprudence, that although autonomous taxation contains some particularities compared to the general regime, autonomous taxation is a component of IRC;

d) In fact, the autonomous taxation mechanism merely reflects an aggravated rate within the taxation of corporate income operated by IRC, without the consequences that TA intends to draw therefrom;

e) On this matter, jurisprudence has been fruitful that has been produced, of which examples include, among many others, Decisions nos. 775/2015-T, 744/2015-T, 784/2015-T, and 740/2015-T, all rendered by Arbitral Tribunals promoted within the scope of CAAD;

f) In the last of the aforementioned decisions, the Tribunal begins its analysis by settling an essential question, related to the applicability of article 90 of the IRC Code to the assessment of autonomous taxation, clarifying that "These articles 89 and 90 of the CIRC, as well as other norms of this Code, such as those relating to the declarations provided for in articles 120 and 122, are applicable to autonomous taxation. It is now settled, following numerous arbitral jurisprudence and the positions assumed by the Tax Authority and Customs Authority, that the tax levied on the basis of autonomous taxation provided for in the CIRC has the nature of IRC.", adding that article 90 applies "also to the assessment of the amount of autonomous taxation, which is calculated by the taxpayer or by the Tax and Customs Authority, following the presentation or non-presentation of declarations, there being no other provision in force in 2012 that provided for different terms for its assessment";

g) For the Tribunal, "the differences between the determination of the amount resulting from autonomous taxation and that resulting from taxable profit are limited to the determination of the taxable matter and the applicable rates, which are those provided for in Chapters III and IV of the CIRC for IRC based on taxable profit and in article 88 of the CIRC for IRC based on the taxable matter of autonomous taxation and the respective rates.";

h) As results from the decision we cited, "the circumstance that a self-assessment of IRC, made under no. 1 of article 90, may contain several partial calculations based on various rates applicable to certain taxable matters, does not imply that there is more than one assessment, as results from the very terms of that norm by making reference to 'assessment', in the singular, in all cases in which it is 'made by the taxpayer in the declarations referred to in articles 120 and 122', having 'as its basis the taxable matter that appears therein' (whether determined on the basis of the rules of articles 17 et seq. or determined on the basis of the various situations provided for in article 88).";

i) And note that, "the new norm of no. 21 added to article 88 of the CIRC by Law no. 7-A/2016, of 30 March, regardless of whether or not it is truly interpretative, in no way alters this conclusion, for there it is established, with regard to the form of assessment of autonomous taxation, that it 'is effected under the terms provided for in article 89 and is based on the values and rates that result from the provisions of the preceding numbers'."

j) It is therefore evident that no. 1 of article 90 of the CIRC applies to the assessment of autonomous taxation;

k) As to the question of the deductibility of amounts relating to SIFIDE from the amounts due by way of autonomous taxation, the Tribunal states that "The diploma that approved SIFIDE does not state that the credits arising therefrom are deductible from any and all IRC collection, but rather defines the scope of the deduction referred to, in its no. 1 of article 4, 'to the amount calculated according to article 90 of the IRC Code, and up to its concurrence'", adding that, "by mere declarative interpretation, it is concluded that article 4, no. 1 of SIFIDE II, by establishing the deduction 'to the amount calculated according to article 90 of the IRC Code, and up to its concurrence', implies the deduction to the amount of autonomous taxation that is calculated according to that article 90.";

l) Moreover, "it cannot be seen, in the possible nature of anti-abuse norms that assume some autonomous taxation an explanation for their removal from the respective collection from the scope of deductibility of the benefit of SIFIDE II, as there is no legal basis to remove the deductibility from the collection resulting from corrections based on norms of a nature unquestionably anti-abuse, such as, for example, those relating to transfer pricing or thin capitalization.";

m) The Tribunal goes on to say that, "pointing to the literal tenor of article 4 of SIFIDE II in the sense that the deduction applies also to the IRC collection derived from autonomous taxation and calculated according to article 90 of the CIRC, only through a restrictive interpretation will it be possible to remove the application of the tax benefit to the IRC collection provided by autonomous taxation. The viability of a restrictive interpretation encounters, from the outset, an obstacle of a general nature, which is that norms that create tax benefits have the nature of exceptional norms, as follows from the express tenor of article 2, no. 1 of the EBF, so that, in the absence of a special rule, they should be interpreted in their precise terms, as is settled jurisprudence. (In the case of tax benefits, extensive interpretation is explicitly provided (article 10 of the EBF), but not restrictive interpretation, so that, as a rule, the tax benefit should not be interpreted with less breadth than that which, in a declarative interpretation, results from the tenor of the norm that provides for it.";

n) With regard to the current no. 21 of article 88 of the CIRC, the Tribunal states that, "For the same reason that what is at issue is interpreting the scope of a diploma of a special nature that is SIFIDE II, relevance cannot be attributed, for this purpose, to the norm of no. 21 of article 88 of the CIRC, added by Law no. 7-A/2016, of 30 March, insofar as it refers that no 'deductions are effected to the global amount calculated', despite the alleged interpretative nature attributed to it. In fact, there is no sign, neither in Law no. 7-A/2016, nor in the Budget Report for 2016, nor in its discussion, that with the addition to article 88 of the CIRC of a general norm prohibiting deductions to the global amount calculated of autonomous taxation, it was intended to interpret restrictively the expression 'deduction to the collection of IRC' that appears in a special norm of a separate diploma, such as SIFIDE II. And, in the absence of an unequivocal intention to the contrary, the rule applies that general law does not alter special law (article 7, no. 3 of the Civil Code), which has the justification that 'the general regime does not include the consideration of the particular conditions that justified precisely the issuance of the special law'.";

o) Now, "converging the literal and rational elements of the interpretation of article 4 of SIFIDE II in the sense that the investment expenses provided for therein are deductible 'to the amount calculated according to article 90 of the IRC Code, and up to its concurrence', it is to be concluded that they are deductible to the entirety of that collection, which encompasses, in addition to that derived from the taxation of profits in each fiscal period, that which results from special advance payment and other positive components of the tax, namely autonomous taxation, state levy and IRC from previous taxation periods." (emphasis added);

p) Thus, autonomous taxation being IRC – assessed on the basis of no. 1 of article 90 of the CIRC – the amounts corresponding to SIFIDE may be deducted from the amount thereof, based on item b) of no. 2 of said provision;

q) It is reiterated, thus, that the self-assessment of IRC for the taxation period of 2011 is entirely paid, and is likewise paid, by inherence, the part thereof that is the object of the present action;

r) The right to payment of compensatory interest corresponds to the realization of the constitutional command provided for in article 22 of the Constitution of the Portuguese Republic, where it is established that "the State and other public entities are civilly liable, in joint and several form with the holders of its organs, officials or agents, for actions or omissions committed in the exercise of their functions and because of that exercise, which result in the violation of rights, freedoms and guarantees or prejudice to others";

s) Once the illegality of the self-assessment is declared as petitioned, the Applicant has the right not only to the respective reimbursement, but also, under article 43 of the LGT, to compensatory interest, calculated on the amount of the unduly paid tax, until full reimbursement thereof, after one year from the date of presentation of this request for official review of the tax;

t) Terms in which it is concluded, as in the initial request, requesting the declaration of illegality of the tax act of IRC self-assessment in question and, likewise, of the act of dismissal of the request for official review submitted which aimed at the annulment of that self-assessment act.

1. The Respondent presented final submissions, in which it fully maintained the tenor of its Reply, sustaining that the present request for arbitral pronouncement should be judged without merit, and, consequently, the Respondent absolved from the Claim, all with the due and legal consequences.

II. SANATION

1. The Respondent raised the exception of "material incompetence of the arbitral tribunal arising from the circumstance that the request for arbitral pronouncement was formulated following dismissal of a request for official review", on the ground that the arbitral request is formulated following dismissal of a request for official review of the act of self-assessment of income tax, in circumstances of time when the timeframe for the gracious objection to which article 131 of the CPPT refers had already elapsed;

2. It is incumbent, therefore, on the Tribunal, prior to the appreciation of the merits, to decide the exception invoked;

3. Article 131, no. 1 of the CPPT provides that "[i]n case of error in self-assessment, the impugnation shall be necessarily preceded by a gracious objection addressed to the director of the regional peripheral organ of the tax administration, within 2 years after the presentation of the declaration";

4. Article 131, no. 3 of the CPPT, for its part, provides that "[w]hen exclusively a matter of law is involved and the self-assessment was effected in accordance with generic orientations issued by the tax administration, there is no need for the necessary objection provided for in no. 1";

5. It happens that, in the case at hand, the self-assessment was not made in accordance with any generic orientation, so no. 3 of article 131 does not apply to it;

6. Article 2, item a) of Regulation no. 112-A/2011, of 22 March, applicable by force of the provision of articles 2, no. 1, item a) and 4, no. 1 both of the RJAT, excepts from the binding of TA to the jurisdiction of the arbitral tribunals operating in CAAD which have as their object the appreciation of "claims relating to the declaration of illegality of self-assessment acts, withholding acts and advance payment acts that have not been preceded by recourse to the administrative route under articles 131 and 133 of the Code of Procedure and Tax Procedure";

7. A fundamental question is, therefore, in the case sub judice, the one that relates to knowing whether the legal requirement of prior gracious objection may be satisfied by means of the presentation of a request for review of the tax act, provided for in article 78 of the General Tax Law (LGT);

8. On this matter, the Supreme Administrative Court (STA) pronounced itself, in its Decision of 12 July 2006, rendered within the scope of case no. 0402/06, in the following terms, which we endorse:

« The review of the tax act both before the entry into force of the CPT, and during its validity, and after the LGT, constitutes an administrative means of correction of errors in acts of assessment of taxes, which is admitted as a complement to the means of administrative and contentious impugnation of these acts, to be deduced within the normal respective timeframes, which aims to enable the correction of injustices of taxation both in favor of the taxpayer and in favor of the administration.

However, it is not indifferent to the taxpayer whether or not to impugn the assessment acts within the respective timeframes, as in case of annulment in an impugnative process, judicial or administrative, any illegality may be invoked and there is a right to compensatory interest from the date of unduly paid until the issuance of the credit note (arts. 43, no. 1 of the LGT and 61, no. 3 of the CPPT), whereas in cases of official review of the assessment (when not made at the request of the taxpayer, within the timeframe of administrative objection, a situation that is equivalent to a gracious objection).

[…]

Although art 78 of the L.G.T., as far as the review of the tax act on the initiative of the taxpayer is concerned, refers only to that which takes place within the 'timeframe of administrative objection', in no. 6 of the same article (in the initial version, which is no. 7 in the current version) reference is made to 'request by the taxpayer', for the carrying out of official review, which reveals that this, despite the impropriety of the designation as 'official', may also have underlying the initiative of the taxpayer.

Identical reference is made in no. 1 of art. 49 of the L.G.T., which speaks of 'request for official review', and in item a) of no. 4 of art. 86 of the C.P.P.T., which refers to the presentation of 'request for official review of the assessment of the tax, on the ground of error imputable to the services'.

It is, therefore, unequivocal that, alongside the so-called review of the tax act on the initiative of the taxpayer (within the timeframe of administrative objection), it is also admitted, following its initiative, the 'official review' (which the Administration must also carry out on its own initiative).

On the other hand, item d) of no. 2 of art. 95 of the L.G.T. refers to acts of dismissal of requests for review among the potentially injurious acts, which are subject to contentious impugnation. No distinction is made here between acts of dismissal practiced in the sequence of a request by the taxpayer made within the timeframe of administrative objection or beyond it, so that the contentious impugnability of acts of dismissal of requests for review practiced in either situation, which, moreover, is a corollary of the constitutional principle of contentious impugnability of all acts that injure rights or legitimate interests of the administered (art. 268, no. 4 of the C.R.P.).

Thus, it is to be concluded that the fact that the timeframe for gracious objection and judicial impugnation of the assessment act had elapsed did not prevent the impugnant from requesting official review and contentiously impugning the act of dismissal thereof.

[…]

Exposed this regime of review of the tax act and impugnation of the decisions rendered (or omitted) in its context, one arrives at the conclusion that the lack of the objection provided for in art 152 of the C.P.T. does not obstruct the possibility of contentious impugnation.

In fact, that objection was necessary for the judicial impugnation of the withholding act, with the general regime of impugnation of voidable acts and with the retroactive effects proper to annulling means.

Its lack does not obstruct (nor does it obstruct judicial impugnation of acts that may be impugned contentiously by direct route), that official review may be requested, with the effects proper to it, limited to the cessation of the effects of the act, translated in the restitution of what was received by the tax administration and that should not have been paid, in light of the applicable substantive regime (eventually increased by compensatory interest under the terms of no. 3 of art. 43 of the LGT, without retroactive nature).

Thus, it is to be concluded that, despite not having been deduced gracious objection, under art 152 of the CPT, the Impugnant could request official review, within the legal timeframe in which the Tax Administration could carry it out and could contentiously impugn the decision of dismissal.»

1. Thus, and as sustains Carla Castelo Trindade, "it is to be accompanied by this jurisprudence of the STA that sees in the request for review of the tax act – administrative impugnative means with a broader timeframe than the others – a mechanism of opening of the contentious route, perfectly equivalent to the necessary gracious objection"[1].

2. We also follow the aforementioned Author when it states the following:

« In fact, and in the sequence of what has been said, the necessary gracious objections, provided for in articles 131 and 133 of the CPPT, are justified by the need for prior administrative filtering, before the judicial route, because acts that are not authored by the Tax Administration but by the taxpayer itself are involved and in which the latter has not yet had any intervention. In that sense, the request for official review serves the purpose of that administrative filtering, because there the Administration will already have the possibility of pronouncing itself on the act of self-assessment, withholding or advance payment. Excluding arbitral jurisdiction merely because the means used was not actually a gracious objection would violate the principle of effective judicial protection, as established in article 20 of the CRP.

And this admissibility applies, a fortiori, both to the request for official review presented outside the timeframe provided for the necessary gracious objection (which is 2 years under those articles of the CPPT), and to the request that is made when it was still possible to present gracious objection»[2].

1. In the same sense, Jorge Lopes de Sousa argues that the formula used by the legislator in item a) of no. 1 of article 2 of the RJAT – "declaration of illegality of assessment acts of taxes, self-assessment, withholding and advance payment" – in a "mere declarative interpretation, does not restrict the scope of arbitral jurisdiction to cases in which an act of one of those types is directly impugned, as the illegality of assessment acts may be declaratively ruled upon as a corollary of the illegality of a second-degree act, which confirms an assessment act, incorporating, with that confirmation, its illegality"[3]. And concludes that if "the formula used in item a) of no. 1 of article 2 of the RJAT does not exclude cases in which the declaration of illegality results from a second-degree act, it will also encompass cases in which the second-degree act is that of dismissal of a request for review of the tax act, as no reason is seen to restrict […]"[4].

2. It should be emphasized that it is the regulatory norm that must be interpreted in conformity with the law, and not the reverse, so that it is not admissible an interpretation of the norms contained in the Regulation that leads to a restriction of the meaning of the law. Furthermore, this must be interpreted in conformity with the Constitution, namely with the principles of effective judicial protection and contentious impugnability of all acts that injure rights or legitimate interests of the administered (articles 20 and 268, no. 4 of the CRP).

3. Thus being, the present tribunal considers itself to have material competence to know of the request, so that the exception of material incompetence of the arbitral tribunal raised by the Respondent is unfounded.

4. The Tribunal is regularly constituted, under the terms of articles 2, no. 1, item a), 5 and 6, no. 1 of the RJAT;

5. The Parties possess legal personality and judicial capacity, are legitimate as to the request for arbitral pronouncement and are duly represented, under the terms of articles 4 and 10 of the RJAT and article 1 of Regulation no. 112-A/2011, of 22 March.

6. No nullities are verified, so the merits must be known.

III. MERITS

III. 1. MATTERS OF FACT

§1. Facts Proven

1. The following facts are judged to be proven:

a) On 31 May 2013, the Applicant proceeded with the filing of the Statement of Income Form 22, relating to Corporate Income Tax (IRC) for the taxation period of 2012, in which it calculated fiscal losses in the amount of € 330,550.61 and a collection of € 0.00;

b) Concurrently, the Applicant self-assessed an amount of € 33,508.09, relating to autonomous taxation;

c) No amount relating to the tax benefits that remained deductible in the taxation period of 2012 was used, the value of which amounts to € 595,801.76, relating to SIFIDE;

d) Within the scope of the inspection action conducted for the taxation period of 2012, TA proceeded to promote corrections to the collection of that period, the resulting additional assessment act being subject to judicial impugnation by the now Applicant, which awaits the decision of the competent Administrative and Tax Court;

e) Notwithstanding the judicial impugnation presented, the Applicant paid the additional assessment in the amount of € 1,828.07, relating to autonomous taxation;

f) The value of autonomous taxation paid relating to the taxation period of 2012 thus amounts to the total of € 35,336.16;

g) On 29/03/2016, the Applicant submitted a request for official review, which was registered with the number …2016…, which culminated with a dismissal order, dated 06/07/2016, having been notified to the now Applicant through Office no. … of 07/07/2016;

h) Not agreeing with the dismissal of the request for official review, the Applicant deduced the request for arbitral pronouncement now under consideration.

§2. Facts Not Proven

With relevance for the decision, there are no essential facts not proven.

§3. Reasoning as to the Matter of Fact

With respect to the matter of fact proven, the Tribunal's conviction was based on the free appreciation of the positions assumed by the Parties in the matter of fact, in the administrative proceedings and in the tenor of the documents joined to the proceedings, not contested by the Parties.

III.2. MATTERS OF LAW

III.2.1. Question to be Decided

Having fixed the relevant factuality, it is verified that the present proceedings exclusively involve matters of law.

The central question to be decided, as posed by the Applicant, is whether the IRC assessment relating to the fiscal year 2012 suffers from the material vice of violation of law, by virtue of the non-deduction of amounts relating to SIFIDE from the IRC collection. According to the Applicant's argument, the IRC collection also encompasses the result of the application of autonomous taxation rates. Thus, the resolution of this question requires the analysis of the nature of autonomous taxation rates.

III.2.2. The Nature of Autonomous Taxation

On the issue of the nature of autonomous taxation we follow closely the tenor and sense of the Arbitral Decision rendered within the scope of Case no. 5/2016-T, in which the following is stated:

« Autonomous taxation was created by article 4 of Decree-Law no. 192/90, of 9 June, which had as its object the introduction of amendments to the CIRC, as results from the respective preamble. This Decree-Law implemented the legislative authorization granted to the Government by no. 3 of article 25 of Law no. 101/89, of 29 December, whose heading is "Corporate Income Tax (IRC)".

From the diplomas referred to, in particular from the law of authorization, there results no indication that the legislator intended to create a new tax. On the contrary, what is evidenced is the intention of the legislator to introduce adjustments to the taxation of business income.

With the approval of Law no. 30-G/2000, of 29 December, which had as its object the "reform of income taxation", Decree-Law no. 192/90, of 9 June was repealed, and article 69-A was added to the CIRC, under the heading "Rate of autonomous taxation", which suggests that we are dealing with the application of a rate, in the context of IRC, distinct from the general rates provided for in article 69. Note that the heading refers to "rate of autonomous taxation"[5] and not "autonomous taxation", which shows that what the legislator intended was to provide a rate distinct from the general rates, for certain situations, described therein.

From this it results that the express recognition of "rates of autonomous taxation" was made in the context of the reform of income taxation, so it would appear absolutely decontextualized and incoherent with the purpose of the legislator to create a tax on expenditure and, for that matter, not identify it as such and include it in the CIRC. Moreover, the systematic insertion of the new normative provision is made immediately following the provision that provides for the general rates, and not in the final articles of the CIRC, which would be logical if it were another tax related to the IRC, nor even in the context of defining the rules of incidence.

There is thus no indication that would lead us to admit that in the case of "rates of autonomous taxation" we are dealing with a tax (on expenditure?) distinct from IRC.

The norm contained in article 69-A introduced by Law no. 30-G/2000, of 29 December, as is the case with the norm contained in article 88 of the CIRC in force at the time of the facts in the case sub judice, does not contain rules on subjective incidence, nor on assessment and payment of autonomous taxation. Consider, for example, the current item a) of no. 1 of article 88, which establishes the following: "Undocumented expenses are taxed autonomously, at the rate of 50%, without prejudice to their non-consideration as expenses under the terms of article 23". If we understood that we are dealing with a provision that creates a new tax, we would always have to ask: who is the taxpayer?; how is the assessment effected?; what are the payment rules? This without even mentioning the question that relates to knowing what would be the material presupposition of taxation that would legitimize such a tax.

The answers must be found in the context of IRC. Note, in coherence with what has just been said, that "rates of autonomous taxation" do not even give rise to a tax payment that must be paid to the State. The application of autonomous taxation rates reflects in the IRC collection and it is the IRC payment that, under the terms of the law, must be paid by the taxpayer. Proof of this is that the advance payments referred to in item a) of no. 1 of article 104 of the CIRC are also deductible from the value calculated in the context of autonomous taxation, that is, they are deducted in the final payment of the tax or discounted for the purpose of reimbursement.

[…]

The application of autonomous taxation rates is effected within the context of the assessment of IRC, and the respective result reflects in the IRC collection. The tax payment payable to the State is that relating to IRC.

According to article 104 of the CIRC, the payment of this tax is made through advance payments, which in general are three, with the payment of "autonomous taxation" not being distinguished with respect to the payment of IRC. For the purpose of payment of IRC, it is irrelevant whether or not autonomous taxation rates were applied.

It is verified that there is a place for reimbursement of IRC under the terms of number 2 of the same article 104 of the CIRC when the "value calculated in the declaration, net of the deductions referred to in nos. 2 and 4 of article 90, is negative, by the amount resulting from the sum of the corresponding absolute value with the amount of the advance payments" or "the value calculated in the declaration, net of the deductions referred to in nos. 2 and 4 of article 90, not being negative, is less than the value of the advance payments, by the respective difference". That is, in case there is IRC assessment by autonomous taxation, the advance payment of IRC, effected under the terms of item a) of number 1 of article 104 of the CIRC, is also deductible in this calculation.

In this way, the payment rules of IRC also point to "autonomous taxation" being integrated in IRC.

But if any doubt remained, it is the legislator itself who recognizes that "autonomous taxation" is IRC when, in article 23-A, no. 1, item a) of the CIRC refers to "IRC, including autonomous taxation, …". Note that this item refers to the non-deductibility of charges with taxes that impose on income (and not on expenditure).

It is not understood, for the reasons stated, how autonomous taxation can be viewed as a tax distinct from IRC. Simply, there is no legal basis or even any indication that permits sustaining this thesis.

As is stated in the Arbitral Decision rendered in Case no. 79/2014-T, "ontologically, autonomous taxation does not configure itself as a type of tax distinct from IRC".

One also subscribes to the Arbitral Decision rendered in Case no. 95/2014-T, when it is stated therein that "it does not behoove the judge to alter on his own initiative the political and technical option of the legislator in configuring this type of tribute as IRC, even if he may not technically agree with the solution found by the legislator. This would constitute a corrective interpretation, knowingly forbidden by the imperative of obedience to the law".

We do not, on the other hand, endorse the thesis expressed in the recent decisions of the Constitutional Court, which is fundamentally rooted in the following idea: IRC taxes income; "rates of autonomous taxation" translate into the application of rates to certain expenditures; thus, autonomous taxation is a tax distinct from IRC (cfr. the Decisions of the Constitutional Court nos. 310/2012 and 465/2015)[6].

Indeed, it is not sufficient that a normative provision provides for the application of a rate to a certain fact for us to conclude that we are in the presence of a tax. This would represent an emptying of the concept of tax. If we applied this minimalist conception of the figure of "tax" to the taxation of income of natural persons, which the Constitution requires to be unitary (article 104, no. 1 of the Constitution of the Portuguese Republic), we would be able to identify 5 "distinct taxes" on the income of natural persons, although formally included in the CIRS, as many as the types of rates provided therein: (i) IRS itself, through the application of the general rates of article 68, and also the "taxes" that would correspond to the application of the additional solidarity rate (article 68-A of the CIRS), of the liberating rates (article 71 of the CIRS), of the special rates (article 72 of the CIRS) and of autonomous taxation rates (article 73 of the CIRS). This without even mentioning the case of the surtax (provided for in the Budget Law, outside the CIRS, therefore).

An aspect that appears to cause some difficulties in the characterization of the nature of "rates of autonomous taxation" is the fact that the same apply to expenditures, which would represent an anomalous factor in a framework of income taxation. In the words of Rui Duarte Morais, "[in autonomous taxation] what is involved is a taxation that applies to certain expenses of taxpayers, which are had as constituting tax facts"[7]. Naturally, starting from this presupposition, the Author acknowledges the difficulty in "discerning the nature of this form of taxation and, more still, the reason why it appears provided for in the codes of taxes on income"[8].

We understand, to the contrary, that autonomous taxation rates do not represent a tax on expenditure, and, for that reason, it does not appear to us to be difficult to understand the provision of the figure of "rates of autonomous taxation" in the codes of IRC and IRS.

Let us see.

The relevance of the consideration of expenditures in the context of IRC (and IRS) results from the constitutional principle of taxation of real income, which is a net income. It is for this reason that expenses and losses are considered in the determination of taxable profit in IRC (article 23 of the CIRC). However, the legislator expressly removes the deductibility of certain expenses, namely for reasons relating to the prevention of tax evasion (article 23-A). But in some cases the legislator, aiming to discourage the realization of certain expenses, namely as a means of preventing tax evasion, goes even further than the provision of mere non-deductibility, by providing for the aggravation of the IRC collection through the application of rates that penalize taxpayers who make certain expenses. This is what happens with autonomous taxation rates, provided for in article 88 of the CIRC.

[…]

From what has been said it is concluded that the provision of the application of autonomous taxation rates emerges as a legislative technique in tax matters that translates into an operation of inverse sense to that of deduction, and which we may designate as fiscal increase.

That is, the expense constitutes a decisive element in the calculation of taxable profit in IRC, and the legislator expressly provides for three forms of differentiated treatment thereof: i) deduction, from which will result a diminution of the IRC collection; ii) non-deductibility, in which the expenses in question have a null effect on the IRC collection; iii) increase, through the application of rates on certain expenses, from which will result an aggravation of the IRC collection of the taxpayer.

Thus, instead of the qualification difficultly explicable, and of meaning contrary to the various indications already stated, of "autonomous taxation" as a tax on expenditure grafted onto a tax on income, it is understood that the figure of "rates of autonomous taxation" consists of a technique of aggravation of the IRC collection, that acts on expenditures – a fundamental element in the determination of taxable profit – and that configures a fiscal increase (that is, an operation of inverse sense to that of fiscal deduction).»

We maintain, in the case sub judice, the understanding expressed in the cited Decision, so that this Tribunal understands that the IRC collection integrates the result of the application of autonomous taxation rates.

III.2.3. The Deductions Provided for in the Legal Framework of SIFIDE

Let us now see in what terms the deductions are provided for within SIFIDE.

The legal regime of the System of Fiscal Incentives to Business Research and Development (SIFIDE), in its various versions, provides for the deduction «…to the amount calculated according to Article 90 of the IRC Code…»[9].

As stated above, autonomous taxation is assessed in accordance with the rules provided for in article 90 of the CIRC.

Regarding this assessment, we subscribe to the reasoning contained in the Arbitral Decision rendered in Case no. 673/2015-T, expressed in the following terms:

« Now, article 90 of the CIRC refers to the forms of assessment of IRC, by the taxpayer or by the Tax Administration, applying to the calculation of the tax due in all situations provided for in the Code, including additional assessment (no. 10).

Therefore, that article 90 also applies to the assessment of the amount of autonomous taxation, which is calculated by the taxpayer or by the Tax and Customs Authority, following the presentation or non-presentation of declarations, there being no other provision that provides for different terms for its assessment.

Thus, the differences between the determination of the amount resulting from autonomous taxation and that resulting from taxable profit are limited to the determination of the taxable matter and the applicable rates, which are those provided for in Chapters III and IV of the CIRC for IRC based on taxable profit and in article 88 of the CIRC for IRC based on the taxable matter of autonomous taxation and the respective rates.

But the forms of assessment provided for in Chapter V of the same Code are of common application to autonomous taxation and to the remaining taxable matter of IRC.

However, the circumstance that a self-assessment of IRC, effected under no. 1 of article 90, may contain several partial calculations based on various rates applicable to certain taxable matters, does not imply that there is more than one assessment, as results from the very terms of that norm by making reference to 'assessment', in the singular, in all cases in which it is 'made by the taxpayer in the declarations referred to in articles 120 and 122', having 'as its basis the taxable matter that appears therein' (whether determined on the basis of the rules of articles 17 et seq. or determined on the basis of the various situations provided for in article 88).

[…]

In any case, whatever calculations are to be made, it is a unitary self-assessment that the taxpayer or the Tax and Customs Authority must effect under the terms of articles 89, item a), 90, no. 1, items a), b) and c), and 120 or 122, and on the basis of it that the global IRC is calculated, whatever the taxable matters relating to each of the types of taxation that may be underlying it».

In the interpretation of the law, and without prejudice to the consideration of the various interpretative elements, the interpreter cannot arrive at a result that does not have a minimum correspondence in the letter of the law. If the legislator expressly provides, in the legal framework of SIFIDE, that the deduction is made "to the amount calculated according to Article 90 of the IRC Code", the interpreter cannot conclude that the ratio legis points to a deduction to the taxable matter of IRC and not to the collection of this tax. It is added that we are dealing with technical terms, with a precise legal-fiscal meaning, it being presumed that they were used by the legislator intentionally, particularly because since the approval of the legal framework of SIFIDE various amendments have been introduced, but the reference to the deduction "to the amount calculated according to Article 90 of the IRC Code" has never been altered.

Therefore, the deductions provided for in SIFIDE must be made after the calculation of the global amount of IRC, which includes the result of the application of autonomous taxation rates, under the terms provided for in article 90 of the CIRC. And the computer system of the Tax and Customs Authority should faithfully reflect the options of the legislator in this matter, permitting the deductions of SIFIDE to be made to the IRC collection, globally considered (that is, after the application of autonomous taxation rates).

III.2.4. The "Interpretative Norm" Added by Law no. 7-A/2016, of 30 March

Law no. 7-A/2016, of 30 March (Budget Law for 2016), added nos. 20 and 21 to article 88 of the CIRC, and the legislator recognized an interpretative nature to the norms contained therein.

No. 21 of article 88 of the CIRC provides the following:

«The assessment of autonomous taxation in IRC is effected under the terms provided for in article 89 and is based on the values and rates that result from the provisions of the preceding numbers, with no deductions being made to the global amount calculated».

From the analysis of this norm we may withdraw the following conclusions:

i) It does not alter the legal regime of SIFIDE;

ii) It does not have as its object the authentic interpretation of norms contained in the SIFIDE;

iii) The provision contained in SIFIDE of the deductions "to the amount calculated according to Article 90 of the IRC Code" remains valid;

iv) The nature of "rates of autonomous taxation" is not altered;

v) The procedure and form of assessment is not altered;

vi) Deductions to the amount of autonomous taxation calculated are now expressly forbidden, which does not prevent deductions to the IRC collection (which includes the result of autonomous taxation) provided for in SIFIDE from being made.

As is stated in the Arbitral Decision rendered in Case no. 673/2015-T, regarding the Extraordinary Credit for Investment (CFEI):

«[f]or the same reason that what is at issue is interpreting the scope of a diploma of special nature that is Law no. 49/2013, relevance cannot be attributed, for this purpose, to the norm of no. 21 of article 88 of the CIRC, added by Law no. 7-A/2016, of 30 March, insofar as it refers that no 'deductions are made to the global amount calculated', despite the alleged interpretative nature attributed to it».

Still according to this Decision:

«there is no sign, neither in Law no. 7-A/2016, nor in the Budget Report for 2016, nor in its discussion, that with the addition to article 88 of the CIRC of a general norm prohibiting deductions to the global amount calculated of autonomous taxation, it was intended to interpret restrictively the expression 'deduction to the IRC collection' that appears in a special norm of a separate diploma, namely article 3, no. 1 of Law no. 49/2013.

And, in the absence of an unequivocal intention to the contrary, the rule applies that general law does not alter special law (article 7, no. 3 of the Civil Code), which has the justification that 'the general regime does not include the consideration of the particular conditions that justified precisely the issuance of the special law.

Therefore, with the literal and rational elements of the interpretation of article 3, no. 1 of Law no. 49/2013 converging in the sense that the investment expenses provided for in the CFEI are deductible to the 'IRC collection', it is to be concluded that they are deductible to the entirety of that collection, which encompasses, in addition to that derived from the taxation of profits in each fiscal period, that which results from special advance payment and other positive components of the tax, namely autonomous taxation, state levy and IRC from previous taxation periods».

This reasoning is transposable, with the necessary adaptations, to the case sub judice.

In this way, the norm contained in no. 21 of article 88 of the CIRC, to which an interpretative nature was attributed, does not preclude that amounts under SIFIDE be deducted from the IRC collection (that is, from the entirety of the collection calculated by the application of article 90 of the CIRC).

Indeed, the interpreter and applier of the law may disagree with the options of the legislator, what he cannot do is alter the legislative solutions adopted. Now the legislator refers in SIFIDE to the deduction "to the amount calculated according to Article 90 of the IRC Code", which is manifestly distinct from "deduction to the taxable matter of IRC". The legislator could have adopted this solution; the truth is that it did not, and it is not for the interpreter to correct the hand of the legislator.

As José de Oliveira Ascensão states, «[h]owever desirable a change in the normative system may be, that change belongs to the sources of law, not to the interpreter. This one grasps the sense of the source as it objectively presents itself at the present moment, not imposing any other sense on it. Weighty reasons of security and defense against arbitrariness ground this conclusion»[10].

Thus, for the deductions provided for in SIFIDE to cease to be made to the IRC collection (to which autonomous taxation also contributes) the legislator, should it see fit, must alter the special legal regime that provides for them.

Given the above, it is revealed to be unnecessary any consideration regarding the interpretative or non-interpretative nature of the norm contained in no. 21 of article 88 of the CIRC and its admissibility or not in light of the constitutional principle of the prohibition of retroactivity of tax law.

Terms in which the Applicant is right, for the reasons and with the grounds invoked, as to the possibility of deduction of tax benefits relating to SIFIDE from the IRC collection, determined after the application of autonomous taxation rates, under the terms of article 90 of the CIRC.

III.2.5. The Requests for Reimbursement and for Compensatory Interest

The Applicant further requests the reimbursement of the sum of unduly paid tax, which amounts to € 35,336.16, which corresponds to the amounts of SIFIDE that were not deducted from the IRC collection (which includes the result of the application of autonomous taxation rates), relating to the fiscal year 2012, plus compensatory interest, at the legal rate, counted from 24 June 2013, until full reimbursement.

No. 1 of art. 43 of the General Tax Law provides that:

«[c]ompensatory interest is due when it is determined, in gracious objection or judicial impugnation, that there was error imputable to the services from which results payment of the tax debt in an amount greater than that legally due».

As write Diogo Leite de Campos, Benjamim Silva Rodrigues and Jorge Lopes de Sousa, «[t]he error imputable to the services that operated the assessment is demonstrated when they proceed to gracious objection or impugnation of that same assessment and the error is not imputable to the taxpayer» (General Tax Law. Annotated and Commented, 4th ed., Lisbon, 2012, p. 342).

The law further determines, in art. 100 of the General Tax Law, that:

«[t]he tax administration is obliged, in case of total or partial merit of objections or administrative appeals, or of judicial proceedings in favor of the taxpayer, to the immediate and full reestablishment of the situation that would exist if the illegality had not been committed, including the payment of compensatory interest, under the terms and conditions provided for in the law».

As is stated in the Decision of the STA of 11/02/2009, appeal no. 1003/08,

«[h]aving the legislator adopted indemnification in the form of compensatory interest, following an annulling decision of an assessment act, presuming the patrimonial prejudice arising from the deprivation of the sum paid following an illegal assessment act, the interpretation of art. 100 of the LGT in conformity with the Constitution is that therein is recognized the right to compensatory interest from the date on which the deprivation of the sum illegally assessed occurred and not only from the end of the timeframe of execution of the annulling decision».

In accordance with the provision of no. 1 of art. 61 of the Code of Procedure and Tax Procedure (CPPT), «[i]nterest is counted from the date of unduly paid tax until the date of processing of the respective credit note, in which they are included».

In the present proceedings, the applicant paid tax in an amount greater than that legally due, so, once the illegality of the (self)-assessment of IRC in question is declared, the applicant has a right not only to the respective reimbursement but, also, to compensatory interest. Such interest calculated on the value of € 35,336.16 unduly paid, counted from this date, all under the terms that may be determined in execution of the judgment.

IV. DECISION

Terms in which the decision is made in this Arbitral Tribunal:

a) To judge admissible the arbitral request for declaration of illegality of the act of self-assessment of IRC relating to the fiscal year 2012, object of impugnation, with its consequent annulment;

b) To judge admissible the request for declaration of illegality of the order of dismissal of the request for official review submitted by the Applicant, with its consequent annulment;

c) To judge admissible the request for reimbursement of the amount of € 35,336.16, plus compensatory interest, at the legal rate, counted from the date of the respective payment, until full reimbursement, all under the terms that may be determined in execution of the judgment.

V. VALUE OF THE PROCEEDINGS

In accordance with the provisions of article 306, no. 2 of the CPC, 97-A, no. 1, item a) of the CPPT and 3, no. 2 of the Regulation on Costs in Tax Arbitration Proceedings, the value of the proceedings is fixed at € 35,336.16.

VI. COSTS

Under the terms of article 22, no. 4 of the RJAT, the amount of costs is fixed at € 1,836.00, under the terms of Table I attached to the Regulation on Costs in Tax Arbitration Proceedings, charged to the Respondent.

Let notification be made.

Lisbon, 11 May 2017

The Arbitrator

Paulo Nogueira da Costa

[1] Legal Regime of Tax Arbitration – Annotated, Coimbra. Almedina, 2016, p. 97.

[2] Idem.

[3] "Commentary on the Legal Regime of Tax Arbitration", in Guide to Tax Arbitration, Coimbra, Almedina, p. 121.

[4] Idem, p. 122.

[5] Emphasis added.

[6] In the Decision of the Constitutional Court no. 465/2015 the following can be read:

« autonomous taxation, although regulated normatively in the context of tax on income, is materially distinct from taxation in IRC, insofar as it applies not directly to the taxable profit of the company, but to certain expenses which constitute, in themselves, a new tax fact (which refers not to the perception of income but to the realization of expenses).

[…]

Indeed, as has been noted, IRC and autonomous taxation are distinct taxes, with different tax bases and subject to specific rates.»

[7] Notes on the IRC, Coimbra, Almedina, 2007, pp. 202-203.

[8] Idem, p. 203.

[9] At the time of the facts, article 4, no. 1 of SIFIDE, in the version introduced by Law no. 55-A/2010, of 31 December (cfr. its article 133) to apply until 2015 as SIFIDE II, subsequently amended by Law 64-B/2011, of 30 December (cfr. its articles 163 and 164) subsequently set out in articles 33 and following of the Fiscal Code for Investment approved by Decree-Law no. 82/2013, of 17 June, and amended by Law no. 83-C/2013 (cfr. its articles 211 and 212) which, among other amendments, extended the validity of SIFIDE II until 2020.

[10] The Law. Introduction and General Theory, 13th ed., Coimbra, Almedina, 2009.