Summary
Full Decision
ARBITRAL DECISION
The request for constitution of the arbitral tribunal was accepted by the Honorable President of the CAAD and was automatically notified to the Tax and Customs Authority on 28-10-2016. Pursuant to the provisions of paragraph a) of article 6, paragraph 2, and paragraph b) of article 11, paragraph 1, of Decree-Law No. 10/2011, of 20 January, as amended by article 228 of Law No. 66-B/2012, of 31 December, the Deontological Council appointed the undersigned as arbitrator of the single arbitral tribunal and notified the parties of this appointment.
Thus, in accordance with the provisions of paragraph c) of article 11, paragraph 1, of Decree-Law No. 10/2011, of 20 January, as amended by article 228 of Law No. 66-B/2012, of 31 December, the single arbitral tribunal was constituted on 30-12-2016, following the relevant legal procedures.
I – REPORT
On 14-10-2016, the company "A…, S.A.", NIPC…, filed a request for constitution of a single arbitral tribunal, pursuant to the combined provisions of articles 2 and 10 of Decree-Law No. 10/2011, of 20 January (Legal Framework for Arbitration in Tax Matters, hereinafter referred to only as RJAT), in which the Tax and Customs Authority is the respondent.
Seeking to annul the decision of the Tax and Customs Authority, which dismissed the Gracious Complaint, and consequently, to determine the annulment of the self-assessments relating to the tax year 2013 with the corresponding restitution of the amount of €4,996.00 (four thousand, nine hundred and ninety-six euros), equivalent to the value of autonomous taxation payments made in 2013, plus the respective indemnity interest, provided for in article 43 of the LGT and article 61 of the CPPT.
Furthermore requesting that any application of the provision - article 21 of article 88 of the CIRC - which implies an interpretation thereof in the sense of the non-deductibility of special advance payments in autonomous taxation, be considered unconstitutional, by violation of the principle of non-retroactivity provided for in article 3 of article 103 of the CRP.
For its part, the AT defends, among other things, and in extensive reasoning, that such understandings inexorably undermine autonomous taxation in what were the principles and purposes upon which the legislator based its creation, lacking any legal basis, the interpretation advocated by the Claimant being a violation of the current rules for determining tax.
It argues abundant arbitral case law in its favor.
The proceeding does not suffer from nullities.
There is no obstacle to the examination of the merits of the case.
II – MATTERS OF FACT
-
The Claimant takes the legal form of a Portuguese joint-stock company, with head office and effective management in Portugal and qualified, for corporate income tax purposes, as a resident taxpayer pursuant to article 2, paragraph 1, subparagraph a) of the Code of that tax.
-
The Claimant submitted IRC Form 22, relating to the tax period of 2013, on 24 May 2014.
-
The total amount of PEC available for deduction totals €4,996.00 (four thousand, nine hundred and ninety-six euros), relating to PEC paid with reference to the tax period of 2013.
-
No amount was deducted as PEC, since no tax collection was determined, and the amount liquidated for autonomous taxation amounted to €70,128.74 (seventy thousand, one hundred and twenty-eight euros and seventy-four cents).
-
On 28.04.2016 the Claimant filed a Gracious Complaint request, which was registered under number …2016…, which resulted in a dismissal order dated 13.10.2016, having been notified to the now Claimant via CTT mail dated 17.10.2016 – see page 68 of the Administrative Process (PA).
-
That decision denied the Claimant's request for the right to annul the liquidation in question, because it was understood, contrary to what was argued, that special advance payments are not deductible from tax collection produced by autonomous taxation.
A – Facts Established as Proven
All of the aforementioned.
The factual matter is not disputed.
B – Facts Established as Not Proven
With relevance to the decision, there are no facts that should be considered as not proven.
C – Justification of the Proven and Unproven Factual Matter
With respect to the factual matter, the Tribunal need not rule on everything that was alleged by the parties, being incumbent upon it, instead, the duty to select the facts that are material to the decision and to distinguish the proven from the unproven facts (see article 123, paragraph 2 of the CPPT and article 607, paragraph 3 of the CPC, applicable ex vi article 29, paragraph 1, subparagraphs a) and e), of the RJAT).
In this manner, the facts relevant to the judgment of the case are chosen and delineated according to their legal relevance, which is established in light of the various plausible solutions to the legal question(s) (see former article 511, paragraph 1 of the CPC, corresponding to the current article 596, applicable ex vi article 29, paragraph 1, subparagraph e), of the RJAT).
Thus, taking into account the positions assumed by the parties, in light of article 110/7 of the CPPT, and the documentary evidence joined to the file, the facts listed above were considered proven, with relevance to the decision.
III – ON THE LAW
1 – The disputed question in the present arbitral action concerns the claim for recognition of the Claimant's right to deduct the amounts paid as special advance payments from the tax collection produced by autonomous taxation.
Let us examine this.
2 – This question has been dealt with insistently in this CAAD, as evidenced, among others, in the AT's Response.
See, in this regard:
Case No. 113/2015-T; Case No. 535/2015-T; Case No. 639/2015-T; Case No. 535/2015-T; Case No. 670/2015-T; Case No. 722/2015-T; Case No. 736/2015-T; Case No. 745/2015-T; Case No. 746/2015-T; Case No. 750/2015-T; Case No. 751/2015-T; Case No. 752/2015-T; Case No. 767/2015-T; Case No. 769/2015-T; Case No. 780/2015-T; Case No. 781/2015-T; Case No. 784/2015-T; Case No. 784/2015-T. Case No. 775/2015, etc.
3 – In agreement therewith, we follow, very closely, transcribing, with due deference, the understanding advocated in the decision rendered in Case No. 673/2015-T, in the part in which it states:
(…) As shown by the decision on the gracious complaint, the sole reason why the Tax and Customs Authority understood, in the information on which the decision on the gracious complaint was based, that special advance payments are not deductible from tax collection of autonomous taxation was the understanding that these do not integrate the tax collection of corporate income tax.
As has been mentioned, in the present case the Tax and Customs Authority recognized that "the liquidation of autonomous taxation is effected on the basis of articles 89 and 90, paragraph 1 of the Corporate Income Tax Code but, applying different rules for the calculation of tax", being "determined various tax collections according to the diversity of the facts that give rise to autonomous taxation" (article 38 of the Response).
The Tax and Customs Authority also stated in article 39 of the Response that "the amount determined pursuant to subparagraph a) of paragraph 1 of article 90 does not have a unitary character, as it comprises values calculated according to different rules, to which differentiated purposes are also associated, so that the deductions provided for in the subparagraphs of paragraph 2 can only be effected from the part of the corporate income tax collection with which there exists a direct correspondence, in order to maintain the coherence of the conceptual structure of the general regime of the tax".
This position lacks consistent foundation, nor does the Tax and Customs Authority indicate any legal provision that would provide it with the minimum verbal correspondence necessary for the admissibility of an interpretation.
In particular, article 105, paragraph 1, of the CIRC, by stating that "advance payments are calculated on the basis of the tax liquidated pursuant to paragraph 1 of article 90 relating to the tax period immediately preceding that in which such payments are to be made, net of the deduction referred to in subparagraph d) of paragraph 2 of the same article", refers to the totality of the tax liquidated pursuant to that paragraph 1 of article 90, which, as the Tax and Customs Authority acknowledged in the cited article 38 of its Response, also applies to the liquidation of autonomous taxation.
On the other hand, as has been mentioned, before the new paragraph 21 of article 88 of the CIRC, there was no legal provision that established the form of liquidation of autonomous taxation, so that, on pain of unconstitutionality by violation of article 103, paragraph 3, of the CRP, due to lack of legal provision for liquidation procedures, it would have to be understood that they were liquidated in accordance with the provisions of paragraph 1 of article 90.
Thus, before Law No. 7-A/2016, the deductions provided for in paragraph 2 of article 90 of the CIRC, which target the "amount determined pursuant to the preceding paragraph", applied to that sole amount resulting from such determination, whenever one was not faced with one of the situations specially provided for in paragraphs 4 and following of the same article, which do not apply in the case at hand.
The deduction of special advance payments from the entire amount determined pursuant to that article 90, paragraph 1, subparagraph a), also resulted from the explicit wording of article 93, paragraph 1 of the CIRC, in the version prior to Law No. 2/2014, of 16 January, when establishing that "the deduction referred to in subparagraph c) of paragraph 2 of article 90 is effected to the amount determined in the declaration referred to in article 120 of the same tax period to which it relates or, if insufficient, up to the fourth following tax period, after the deductions referred to in subparagraphs a) and b) of paragraph 2 and with observance of paragraph 7, both of article 90, are made". ([9])
The amount determined in the declaration referred to in article 120 includes the amounts relating to autonomous taxation, with no other specific declaration for this purpose, neither before nor after Law No. 7-A/2016.
In fact, the declarations provided for in article 120 of the CIRC are drawn up in a single official form approved by ministerial order of the Minister of Finance, pursuant to articles 117, paragraph 1, subparagraph b), and paragraph 2 of the CIRC.
Thus, in light of the provisions of subparagraph c) of paragraph 2 of article 90 and paragraph 1 of article 93 of the CIRC, until Law No. 7-A/2016, nothing in the literal wording of the CIRC prevented the deduction of special advance payment amounts from the total corporate income tax collection that was determined pursuant to that paragraph 1 of article 90, including that derived from autonomous taxation, within the conditions provided therein.
On the other hand, as special advance payments have the nature of forced loan ([10]), which creates in the legal sphere of the taxpayer a credit against the Tax Administration, it does not appear unreasonable that it be taken into account in situations in which a credit is created on its part in relation to the taxpayer.
Furthermore, autonomous taxation under corporate income tax, given the increasing scope that the legislator has been attributing to it, to be compatible with the constitutional principle of business taxation fundamentally affecting its actual income (article 104, paragraph 2, of the CRP), should be understood as indirect forms of taxing business income, through the taxation of certain expenses, as is implicit in subparagraph a) of paragraph 1 of article 23-A of the CIRC in the version of Law No. 2/2014, of 16 January, in alluding to "corporate income tax, including autonomous taxation, and any other taxes that directly or indirectly affect profits". The statistics of the Tax and Customs Authority referred to above, as well as the case at hand, in which the Claimant had tax losses in 2012 and 2013 and in both presents only autonomous taxation of substantial value, are illustrative of the constitutional problem that arises.
In any event, as stated in the CAAD award rendered in Case No. 59/2014-T, autonomous taxation in corporate income tax should be considered a form of business income taxation:
"The Explanatory Memorandum contained in Bill No. 46/VIII, which gave rise to Law No. 30-G/2000, of 29 December, which greatly expanded the situations of autonomous taxation, leaves no room for doubt that this is a conscious and intended expansion of the previously existing distortions, as it was understood that they were necessary, in short, to compensate for other distortions resulting from significant tax fraud and evasion and, thus, to increase the fairness of the distribution of the tax burden among citizens and businesses".
(...)
"autonomous taxation directly affecting certain expenses, in the context of taxes that originally affected only income, are considered distortions of the system of direct taxation of income that the corporate income tax was intended to achieve, but a value that was legislatively considered to be more relevant than the theoretical coherence of taxes, such as the implementation of tax justice, imposed a choice for these forms of taxation, as they were in accordance with the principles of equity, efficiency and simplicity.
(...)
But this indirect taxation is nonetheless effected within the scope of the corporate income tax, as results from the inclusion of autonomous taxation in the respective Code, which has as a corollary the application of the general rules specific to this tax, which do not conflict with its special form of application.
Thus, if it is true that autonomous taxation constitutes a different form of imposing taxes on businesses, which could be contained in autonomous regulation or be arranged in the Stamp Duty Code, it is also true that the legislative option to include such taxation in the CIRC reveals an intention to consider such taxation as incorporated in the corporate income tax, which could be justified by their being an indirect form, but, from the legislative perspective, equitable, simple and efficient, of taxing business income that escapes the regime of taxation with direct application to income".
Indeed, it is a fact that the imposition of any expense without consideration on a legal entity has as a corollary a potential decrease in its income, so that the imposition of a unilateral tax obligation, even if calculated on the basis of expenses incurred, constitutes a form of indirectly taxing its income. ([11])
The new article 23-A of the CIRC, introduced by Law No. 2/2014, of 16 January, by stating that "the following expenses are not deductible for purposes of determining taxable profit, even when accounted for as expenses of the tax period: a) Corporate income tax, including autonomous taxation, and any other taxes that directly or indirectly affect profits", gives an indication that, from the legislative perspective, corporate income tax and autonomous taxation are taxes that directly or indirectly affect profits, as this understanding may justify the inclusion of the expression "any other taxes", which presupposes that corporate income tax and autonomous taxation are also taxes of these types.
Therefore, as autonomous taxation provided for in the CIRC is, ultimately, a form of taxing business income, it is not apparent that there is necessarily an incompatibility between it and the general rules that provide for the form of payment of corporate income tax.
On the other hand, if it is true that, under the regime in force before Law No. 2/2014, of 16 January, amended paragraph 3 of article 93 of the CIRC, amounts paid as special advance payments could not always be deducted ([12]), it is also true that that regime was altered by that Law, with refund being admitted without conditions other than the taxpayer requesting it, within the prescribed period.
Therefore, the interpretation that flows most linearly from the wording of articles 93, paragraph 3, and 90, paragraph 1, of the CIRC, prior to Law No. 2/2014, is that special advance payments are deductible from the corporate income tax collection derived from autonomous taxation.
But it is also true that, in light of the former regime for refunding special advance payments, which revealed that special advance payment had implicit a presumption of undeclared income, one could venture a restrictive interpretation, with respect to special advance payment, in the sense that it is not deductible from the collection of autonomous taxation, as was understood in the arbitral decision of 30-12-2015, rendered in CAAD Case No. 113/2015-T, which invokes considerable reasons, derived from the purposes that the legislator sought to achieve with the creation of special advance payments, which could justify a restriction of the reference made in article 93, paragraph 1, of the CIRC, to the "amount determined in the declaration referred to in article 120":
As noted, the PEC became part of the corporate income tax system whose liquidation established in article 83 was designed to determine the tax directly affecting declared income. When there is a tax loss, the taxpayer must still bear the PEC; that was indeed the reason for its introduction. If a given company has successive tax losses, it will systematically bear tax, as the system doubts its ability to function in a permanently deficit situation, requiring it to provisionally satisfy (on account) a certain amount. It may refund it if it proves that this situation is common in its sector of activity or if the AT verifies the regularity of its declarations. This was the balance that the CIRC required to maintain a system based on declarations made by taxpayers.
The tax resulting from autonomous taxation is based solely on the pursuit of tax evasion through income shifting and has a deterrent and compensatory effect.
If deduction of the PEC from the collection resulting from autonomous taxation is permitted, the purposes of the system in which the provision of article 83-2-e CIRC is situated will be frustrated, as the proceeds of special advance payment which should remain "stationary" in the ownership of the Public Treasury will be applied to the extinction of the taxpayer's debt resulting from autonomous taxation, thus alleviating the intended pressure to prevent declarative tax "evasion". There is indeed an irreconcilable conflict between the rationale of the PEC – combating evasion or pressure to correct declarations – and the allocation of its credits to the satisfaction of other obligations than those resulting from the determination of corporate income tax calculated on taxable profit.
The new paragraph 21 of article 88 of the CIRC added by Law No. 7-A/2016, of 30 March, is in tune with this arbitral understanding, as it comes to expressly establish that to the amount determined for autonomous taxation no "deductions" are "made".
On the other hand, article 135 of Law No. 7-A/2016, of 30 March, by attributing an "interpretative" nature to that new paragraph 21 of article 88, combined with article 13 of the Civil Code (which is the sole provision that defines the concept of interpretative law), has implicit a legislative intention to apply the new regime to previous situations in which there are no "effects already produced by the performance of the obligation, by judgment that has become final, by settlement, even if not ratified, or by acts of similar nature".
BAPTISTA MACHADO teaches about interpretative laws:
Now the reason why the interpretative law applies to facts and situations prior to its enactment lies fundamentally in that it, coming to establish and fix one of the possible interpretations of the old law with which interested parties could and should have counted, is not susceptible to violating safe and legitimately founded expectations. We can consequently say that those laws are interpretative in nature which, on points or matters in which the applicable legal rules are uncertain or their meaning is disputed, come to establish a solution that the courts could have adopted. It is not necessary that the law come to establish one of the previous currents of case law or a strong previous current of case law. All the more so as the interpretative law often emerges before such currents of case law even form. But, if this is the case, and if in the meantime a uniform current of case law has formed that made practically certain the meaning of the old rule, then the new law that comes to establish a different interpretation of the same rule can no longer be considered truly interpretative (although it may be so by legislative determination), but innovative.
For a new law to truly be interpretative, two requirements are therefore necessary: that the solution of the former law be disputed or at least uncertain; and that the solution defined by the new law fall within the framework of the dispute and be such that the judge or interpreter could reach it without exceeding the limits normally imposed on interpretation and application of law. If the judge or interpreter, in the face of old texts, could not feel authorized to adopt the solution that the new law comes to establish, then the latter is decidedly innovative.
In light of this position, whose reasoning is considerable, given the legislation in force in 2012 and 2013, one can accept the attribution of an interpretative nature to paragraph 21 of article 88 of the CIRC as made in article 135 of Law No. 7-A/2016, of 30 March, in light of the teachings of BAPTISTA MACHADO, as the solution provided therein of the impossibility of deducting special advance payments from the total amount of autonomous taxation passes the test set out by this Author:
– the solution that resulted from the literal wording of article 93, paragraph 1, of the CIRC was disputed, as evidenced by that arbitral decision and the solution defined by the new law falls within the framework of the dispute;
– the judge or interpreter could reach that solution without exceeding the limits normally imposed on interpretation and application of law, since restrictive interpretation is admissible when there are reasons to conclude that the scope of the legal text belies legislative intent or it is necessary to optimize the harmonization of conflicting interests that two rules seek to protect.
On the other hand, unlike what occurs with the CFEI, there is, with respect to deductibility of special advance payments, no concern for protection of legitimate expectations, as special advance payments are connected with the volume of business, not depending on any specific conduct that the taxpayer would be led to adopt by the creation of the expectation of obtaining a tax advantage as consideration.
Moreover, it is not apparent that the regime resulting from article 88, paragraph 21, of the CIRC contains any contradiction, contrary to what the Claimant argues: according to this new rule, the rules of the CIRC relating to the form of liquidation of autonomous taxation should be interpreted as provided therein and with respect to that part of the liquidation of corporate income tax no deductions are made.
Indeed, it was precisely with this understanding that Model 22 of the corporate income tax declaration was drawn up and it was by applying the regime now explicit in paragraph 21 of article 88 that the Claimant completed the declarations referred to in the file, without any perceptible contradiction.
But, if this is so, as the Claimant argues, the obstacle to the application of the regime resulting from this paragraph 21 of article 88 will be only its possible unconstitutionality, specifically in light of the rule prohibiting taxes of a retroactive nature contained in paragraph 3 of article 103 of the CRP, which establishes that "no one can be obliged to pay taxes that have not been created in accordance with the Constitution, that have a retroactive nature or whose liquidation and collection are not made in accordance with the law".
The Constitutional Court has adopted a restrictive interpretation of the scope of this prohibition of taxes that have a retroactive nature, understanding that the "legislator of the 1997 constitutional revision, which introduced the present wording of article 103, paragraph 3, only intended to establish the prohibition of authentic retroactivity, or proper retroactivity, of tax law, covering only cases in which the taxable fact that the new law seeks to regulate has already produced all its effects under the old law, excluding from its scope application situations of retrospectivity or improper retroactivity, that is, those situations in which the law is applied to past facts but whose effects still persist in the present" (Decisions No. 18/2011, of 12-01-2011, which follows case law adopted in Decision No. 399/2010).
The provisions on special advance payments were not, in principle, provisions relating to the incidence of corporate income tax, but rather to its liquidation and payment, so that, to that extent, they will not be covered by the constitutional prohibition of retroactivity. But, before the amendment given by Law No. 2/2014, of 16 January, to paragraph 3 of article 93 ([13]), in the impossibility of deducting special advance payments in the period to which they relate and in subsequent periods, those provisions could end up creating a situation of incidence of corporate income tax, autonomous in relation to any other taxable fact, if refund were not to be permitted in accordance with paragraph 3 of article 93 of the CIRC, which depended on the fulfillment of conditions.
However, with the amendment given to said paragraph 3 of article 93 by Law No. 2/2014, conditions were no longer required, so that special advance payments only imply, by themselves, the definitive payment of tax when the taxpayer does not take steps to obtain a refund, within the prescribed period.
And, even in this case, one would be faced with a complex taxable fact of successive formation, which is constituted by the volume of business in the year to which the special advance payments relate combined with the impossibility of deduction in the periods provided by law and the non-refund in accordance with the provisions of article 93, paragraph 3, of the CIRC.
In light of this regime, the legal situation created with the special advance payments made in the years 2012 and 2013 has not yet been stabilized, which, from the outset, rules out the violation of the prohibition of retroactivity of tax laws, in the view of the Constitutional Court, as the taxable fact that the new law seeks to regulate has not occurred in its entirety nor produced all its effects under the old law: "a case in which the taxable fact that the new law seeks to regulate has already produced all its effects under the old law and another case in which the taxable fact occurred under the old law, but its effects, in particular those relating to liquidation and payment, have not yet been completely exhausted will not necessarily have the same constitutional weight, as the first situation is from the point of view of the possible affectation of the taxpayer's legal situation more serious than the second" (Constitutional Court Decision No. 399/10, of 27-10-2010).
Thus, it must be concluded that the authentic interpretation made in article 88, paragraph 21, of the CIRC, in the part in which it relates to the non-deductibility of special advance payments in autonomous taxation, does not offend the principle of non-retroactivity in the creation of taxes, understood as relating only to authentic retroactivity, relating to taxable facts that were completed and produced all their effects in the past.
However, that rule of non-retroactivity of provisions that create taxes does not exhaust the constitutional concerns for legal certainty, imposed by the principle of the democratic rule of law, as taught by CASALTA NABAIS:
"The principle of legal certainty, inherent in the idea of a democratic rule of law, is far from having been totally absorbed by that new constitutional provision. It is true that it ceased to serve as a balance in weighing the legal interests present when we are faced with a tax affected by true or proper retroactivity. When this happens, the solution is now dictated, urbi et orbi, in the Constitution, and its applying bodies cannot, without violating it, proceed with a case-by-case balancing.
But the principle in question undoubtedly has a much broader basis. For it also serves as a criterion for balancing in situations of improper, inauthentic or false retroactivity, as well as in situations in which, with no retroactivity, proper or improper, occurring, the confidence of taxpayers placed in the conduct of State bodies must be protected". ([14])
However, in the specific case of special advance payments, it cannot be concluded that one is not faced with a truly interpretative law, as there was no consolidated case law in the sense of their deductibility from the collection resulting from autonomous taxation and, on the contrary, the solution adopted in paragraph 21 of article 88 could already previously be adopted by the courts, as was done by the Arbitral Tribunal that rendered the decision in CAAD Case No. 113/2015-T.
Thus, it cannot be concluded that the authentic interpretation made in that article 88, paragraph 21, by force of article 135 of Law No. 7-A/2016, of 30 March, violates the constitutional principle of legal certainty, with respect to the part of that provision that relates to the non-deductibility of special advance payments from the collection of autonomous taxation (…).
-
The claim for arbitral pronouncement is thus unfounded in this part, as to the illegality of the self-assessments.
-
It must be stated, nevertheless, that we are very sensitive to the issue of the constitutional principle of non-retroactivity of law in tax matters as defended in the Decision of Case No. 775/2015, as well as in the learned and superior treatment in the dissenting vote of the Honorable Arbitrator João Taborda da Gama - Case 302/2016 - in the terms that, once again with due deference, extracts are transcribed:
(…)…In general it is methodologically highly questionable the articulation between interpretative norms and the very idea of separation of powers, as well as its methodological foundation, I do not see how, after the constitutional prohibition of tax retroactivity, the conduct of the legislator in tax matters of seeking to dispose with force of law regarding the meaning of a source of law since its creation, fixing one of such meanings and excluding others, can be accommodated.
Admitting retroactive interpretative norms in tax matters not only violates the express constitutional prohibition of retroactivity in tax matters but distorts the terms of a principle of tax justice and equality in taxation in the context of the current conformation of the tax legal relationship, based on duties of cooperation of taxpayers. Indeed, and especially in a context of structural strong budgetary pressure, legitimizing the use of interpretative-retroactive tax norms cannot fail to function as an incentive to the budgetary legislator to, and knowing the role of law and de facto of the Administration and Government in the making of tax laws, under cover of elaborated distinctions of general scope on what are (called) truly interpretative norms, remove, with retroactive effects, the interpretative meaning of tax norms that do not maximize tax collection.
…In most cases, it will not be difficult for this second-hand legislator to find an interpretative meaning to its liking, starting with the one that has come to be established after the enactment of the provision by the concretization of the tax administration in concrete cases or in generic orientations, and regardless of the meaning extracted by taxpayers, by the community, or even by the courts. By doing, through this expedient, so that such meaning is the one that should, ab initio, regulate the legal situations already occurred, the legislator distorts in an inadmissible manner the terms of the relationship between the State and the Citizen, and between the various powers constitutionally provided and guaranteed.
That retroactive fixation of a normative meaning, which is the same as saying that retroactive removal of all other meanings, influencing in various ways even the decision of concrete cases, frontally violates, namely, the constitutional prohibition of retroactivity in tax matters.
This opens the path to the permanent revisability of tax laws through interpretative laws, a tendency that, by the way, is already beginning to take its course. This revisability of the initial normative plan under cover of interpretative norms has, it must be highlighted, traits of legislative insidiousness, insidiousness inadmissible in a Democratic Rule of Law, because it is a conduct lacking the frontal approach of the legislator who chooses to clearly assume before the community the path of tax retroactivity, submitting then to the canons that the legal community, at a given time and place, has perfected to deal with this complex issue. By choosing to regulate the past in a skewed manner, saying that it is not touching the past because after all it should have been as it only now comes to say, and by fleeing a frontal assumption of retroactivity in the political, legal, dogmatic and methodological planes, the tax legislator exceeds the limits of its powers and denies the essence of its function, a conduct that can only merit the clearest legal repugnance (…).
6 – Finally, considering the specific, concrete and pertinent considerations adduced in the cited decision and, above all, the ascertained majoritarian decision-making sense (including in the CC), to which – although with the reservations expressed – adherence is given, as it is important to contribute to uniform interpretation and application of Law (article 8, paragraph 3 of the Civil Code), it is necessary to conclude that:
– It follows from the wording of articles 93, paragraph 3, and 90, paragraph 1, of the CIRC, prior to Law No. 2/2014, that special advance payments are deductible from the corporate income tax collection derived from autonomous taxation;
– The attribution of an interpretative nature to paragraph 21 of article 88 of the CIRC contained in article 135 of Law No. 7-A/2016, of 30 March, is however granted;
– It cannot be concluded that the authentic interpretation made in that provision violates the constitutional principle of legal certainty, or any other, with respect to the non-deductibility of special advance payments from the collection of autonomous taxation.
It is thus unfounded, the claim for arbitral pronouncement as to the illegality of the (self-)assessment.
7 – For this reason, the contested tax liquidation act does not suffer from a vice of error concerning the legal assumptions, imposing its maintenance in the legal order and not its annulment, as is requested.
8 – As to the claim for refund of paid tax and indemnity interest, filed by the Claimant, article 43, paragraph 1 of the LGT establishes that indemnity interest is due when it is determined that there was error attributable to the services resulting in the payment of the tax debt in an amount exceeding that legally due.
In the case, for the reasons stated, there is, obviously, no place for any refund or payment of indemnity interest.
DECISION
For these reasons, it is decided to judge the arbitral claim filed as unfounded and, in consequence:
a – Not to declare the annulment of the order dismissing the Gracious Complaint and the contested tax liquidation act;
b – Not to grant the claim for unconstitutionality filed;
c – Not to determine the refund of the value of paid tax and payment of indemnity interest;
d – To condemn the Claimant for the costs of the proceeding.
Value of the Proceeding
The value of the proceeding is fixed at €4,996.00, pursuant to article 97-A, paragraph 1, a) of the Code of Tax Procedure and Process, applicable by force of subparagraphs a) and b) of paragraph 1 of article 29 of the RJAT and paragraph 2 of article 3 of the Regulation of Costs in Tax Arbitration Proceedings.
Costs
The arbitration fee is fixed at €612.00, pursuant to Table I of the Regulation of Costs of Tax Arbitration Proceedings, to be paid by the Claimant, since the claim was considered totally unfounded, pursuant to articles 12, paragraph 2, and 22, paragraph 4, both of the RJAT, and article 4, paragraph 4, of the cited Regulation.
Let notification be made.
Lisbon, 06 April 2017
The Arbitrator
Fernando Miranda Ferreira
Frequently Asked Questions
Automatically Created