VAT Refund Request: Invoice Requirements and Right to Liquidation Expiry Under Portuguese Tax Law (CAAD 751/2016-T)

ARBITRATION AWARD

I – REPORT

A…, a company incorporated under Belgian law, with registered office in …, … …, Belgium, with Belgian corporate identification number …, registered in Portugal for VAT purposes with number …, whose respective local peripheral service is the Tax Office of Lisbon – …, following notification of the express denial of the administrative complaint filed by it on 27.06.2012, against the Value Added Tax assessments and assessments of respective compensatory interest, relating to the tax periods 2007.06/2007.07/2007.08/2007.09/2007.10, with numbers …, …, …, …, …, …, …, …, … and …, in the total amount of € 1,041,410.79 (VAT in the amount of € 893,150.54 and compensatory interest in the amount of € 148,260.25), has, in accordance with the provisions of subsection a) of no. 1 of Article 2 and Article 10, both of Decree-Law no. 10/2011, of 20 January, requested the establishment of an Arbitration Tribunal for the purpose of declaring the illegality and consequent annulment of the denial of the Administrative Complaint and of the VAT assessment acts and corresponding compensatory interest that constitute its subject matter and identified above.

The respondent is the Tax and Customs Authority (hereinafter referred to as "Respondent").

The request for establishment of the arbitration tribunal was accepted by His Excellency the President of the CAAD and automatically notified to the Respondent in accordance with regulatory requirements.

Pursuant to subsection a) of no. 2 of Article 6 and subsection b) of no. 1 of Article 11 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 of the CAAD appointed as arbitrators of the collective arbitration tribunal Judge José Poças Falcão, Dr. Maria Cristina Aragão Seia, and Dr. Emanuel Augusto Vidal Lima, who communicated their acceptance of the appointment within the legal timeframe.

On 21-03-2017, the Parties, having been duly notified, did not manifest, within the legal timeframe and terms, any intention to refuse the appointment of the arbitrators (Article 11, no. 1, subsections a) and b) of the RJAT, combined with Articles 6 and 7 of the Deontological Code).

In compliance with the provision of subsection c) of no. 1 of Article 11 of the RJAT, the Arbitration Tribunal was established on 27-02-2017.

II – PRELIMINARY RULING

This Arbitration Tribunal is materially competent.

No exceptions were raised.

The Parties have legal personality and capacity, are legitimate as to the request for arbitration decision, and are duly represented, in accordance with the provisions of Articles 4 and 10 of the RJAT and Article 1 of Ordinance no. 112-A/2011, of 22 March.

There are no nullities, so it is necessary to proceed to the merits.

III. MERITS

FACTS

§1. Proven Facts

The Tribunal considers the following facts to be proven:

The Claimant is a company incorporated under Belgian commercial law, established in 2007 in Belgium;

The Claimant commenced operations in Portugal following an international corporate restructuring of Group B… (all cf. pages 225 et seq. of the Administrative File attached to the case records);

Within the scope of this reorganization, the business unit for heating, air conditioning, and ventilation equipment of that group was transferred in 2007 to the Claimant, which had previously been integrated in company C… (cf. Article 13 of the Claimant's initial petition, Articles 52 to 62 of the Administrative Complaint and pages 225 et seq. of the Administrative File attached to the case records);

C… was registered in Portugal for VAT purposes with tax number PT …, and ceased operations on 31.08.2007 (cf. Articles 52 to 62 of the Administrative Complaint and document XV attached thereto);

As a result of the reorganization, the Claimant has been registered for VAT purposes in Portugal since 1.06.2007 (cf. page 4 of the Final Inspection Report);

The Claimant filed periodic VAT declarations in Portugal between June and October 2007 with active and passive operations (cf. page 4, point II, 3 of the Final Inspection Report);

In the declarations filed, the following amounts of VAT were deducted (cf. page 5, III. 1 of the Final Inspection Report):

An amount of € 5,543.30 was regularized in favor of the State in field 41 (as indicated in Articles 63 to 65 of the Administrative Complaint);

An amount of VAT of € 212,839 was deducted in field 22 of the periodic declarations, relating to VAT self-assessed by the Claimant for intra-community acquisitions (cf. Articles 66 to 69 of the Administrative Complaint and Document VII attached);

From the reconciliation of payable VAT and deductible VAT, the Claimant calculated a VAT credit in the amount of € 560,877.80;

And requested reimbursement of this credit from the Tax Authority in April 2008;

This refund request was denied due to failure to provide a bank guarantee [(subsections h) to j) as per page 4, II. 3 of the Final Inspection Report)];

In June 2011, the Claimant was subject to an internal audit action, of partial scope, in VAT matters, through service order 2011… (page 4, II. 1 of the Final Inspection Report and Administrative File attached to the case records);

Within the scope of this audit, a letter was sent by the Tax Authority on 7.6.2011, by registered mail with proof of receipt, Office no.…, to the address of the Claimant as recorded, at that time, in the Tax Authority's records: … … (cf. header of the Administrative Complaint filed by the Claimant and copy of the registered mail receipt slip from CTT attached to document 54, 3rd sheet, filed by the Claimant), with the following content: "notification for presentation of VAT documentation (…) under Articles 37 and 38 of the Complementary Rules of Tax Inspection Procedure, company A… is notified to (…) remit (…) documentation of active and passive operations in VAT matters that served as support for the completion of the periodic VAT declarations for the periods 2007/06, 2007/07, 2007/08, 2007/09, 2007/10, 2007/11 (cf. Inspection Report, II. 3 and 2nd sheet of document 54 filed by the Claimant);

The letter was returned by Belgian Postal Services with the notation "Ne reçoit pas/plus le courrier a l'adresse indiquée" (cf. copy of the registered mail receipt slip from CTT attached to document 54, 3rd sheet, filed by the Claimant);

A second letter was sent by the Tax Authority to the Claimant, to the same address, on 26.07.2011, Office no.…, by registered mail with proof of receipt, containing a "2nd notification for presentation of VAT documentation" with the same content as Letter … (cf. Inspection Report, II. 3 and document 54, 4th sheet, filed by the Claimant);

This letter was returned by Belgian Postal Services with the notation "Ne reçoit pas/plus le courrier a l'adresse indiquée" (cf. copy of the registered mail receipt slip from CTT attached to document 54, 4th sheet, filed by the Claimant);

A letter was sent on 08.09.2011, Office…, containing a request for notification of the Claimant to the Director of the Fraud Investigation and Special Actions Service (DSIFAE), pursuant to Regulation (EC) no. 1798/2003 with the following content: "since there have already been two attempts at notification, by registered mail with proof of receipt to the address existing in the DGCI computer system, and the same were returned with an indication of unknown" (cf. copy of this letter, document 54, 6th sheet, filed by the Claimant);

Letter … contains, in annex, Letter no. …, also of 08.09.2011, relating to notification of the Draft Corrections to the Inspection Report (hereinafter "Draft Corrections") and respective right to hearing (cf. copy of this letter, document 54, 6th sheet, filed by the Claimant);

Letters no.…, appending letter no.…, were sent by mail, by registered mail with proof of receipt, to the address … (cf. copy of the registered mail receipt slip from CTT attached to document 54, 7th sheet and following, filed by the Claimant);

This letter was returned by Belgian Postal Services with the notation "Ne reçoit pas/plus le courrier a l'adresse indiquée" (cf. copy of the registered mail receipt slip from CTT attached to document 54, 7th sheet, filed by the Claimant);

After the previous notifications failed, the Tax Authority proceeded to notify the Claimant of the report of the tax inspection referred to, pursuant to Articles 14 to 16 of Regulation no. 1798/2003 (EC) at …, BELGIUM - by means of Letter … of 14.12.2011, which was received by the Claimant at this address;

On 14.12.2011, the Tax Inspection Services and the Finance Department of Lisbon did not know that the actual address of the Claimant was …, …, BELGIUM and not …;

The Claimant became aware of the VAT assessments and compensatory interest notices with numbers…, …, …, …, …, …, …, …, … and … in June 2012, through consultation of its portal with the Tax Authority and, as a result of that discovery, through informal contacts with the Tax Authority, namely regarding suspension of the inherent tax enforcement proceeding - (cf. Article 5 of the Administrative Complaint and point I, 3rd paragraph of the Denial of the Administrative Complaint, document V attached to the Administrative Complaint and screenshot taken from the finance portal by the Claimant attached as document 4 of the initial petition);

In the Tax and Customs Authority's database, the VAT assessments and compensatory interest notices with numbers …, …, …, …, …, …, …, …, … and …, mentioned above, appear only as a "printout" of a computer record containing the indication of: (i) the assessment number (ii) the certificate number and date of issuance as being 2012.03.28, (iii) the amount of VAT or compensatory interest (iv) the notification as having the date 29.12.2011 (v) collection period (vi) a CTT registration number (cf. pages 154 to 163 of the Administrative File attached to the case records, other documents of this file and document no. 55 filed by the Claimant to the case records);

In the Tax Authority's files there are no copies of the contested assessment acts, copies of letters sent giving notice of these acts to the Claimant (i.e., notifications) or copies of CTT registration slips that were used in sending these documents to the Claimant (cf. pages 154 to 163 of the Administrative File attached to the case records, other documents filed to this case and document no. 55 filed by the Claimant to the initial petition containing a certificate of documents existing in the tax administration's files, from which it results that after "examining the elements existing in the Tax Authority's Databases and available in this Finance Office (…) the notifications of the Value Added Tax assessments and respective compensatory interest requested are those contained in pages 3 to 12" – pages that only contain the printout of the computer record of the contested assessments);

Only one (1) CTT registration record appears in the printout of the Tax Authority's computer record relating to the assessments in question for each assessment (cf. pages 154 to 163 of the Administrative File attached to the case records and document no. 55 filed by the Claimant to the initial petition);

In the Tax Authority's files there are no proofs that a 2nd letter containing the contested assessments and communications or letters giving notice of these acts was sent to the Claimant (cf. pages 154 to 163 of the Administrative File attached to the case records, other documents of this case and document no. 55 filed by the Claimant to the initial petition);

The Claimant filed an Administrative Complaint on 27.06.2012 (as per document no. 2 attached to the initial petition of the Claimant and Administrative File attached to the case records);

In the Administrative Complaint, the Claimant attached the following documents: (i) List of 32 pages, containing the identification of more than 1,300 invoices and equivalent documents that supported the right to VAT deduction exercised in 2007 by the Claimant, with identification of: 1) its accounting entry, 2) its internal reference, 3) the document number, 4) date, 5) date of entry in the accounts, 6) the VAT amount, 7) the VAT base, 8) the type of acquisition as domestic or intra-community (cf. document VI attached to the Administrative Complaint); (ii) List of 15 pages, containing the identification of 600 documents that supported the right to deduction of self-assessed VAT relating to intra-community acquisitions of goods and services, with identification of: 1) its accounting entry, 2) its internal reference, 3) the document number, 4) date, 5) date of entry in the accounts, 6) the VAT amount, 7) the VAT base (cf. document VII attached to the Administrative Complaint); (iii) Copies of 41 documents containing invoices and equivalent documents relating to internal transfers of the Claimant's stock between Member States, which supported the right to VAT deduction of the Claimant (Documents 8 to 49 attached to the Administrative Complaint).

In the Administrative Complaint, the Claimant offered to make available to the Tax Authority all copies of invoices and other documents and to provide all clarifications that might be deemed necessary, as set out in Articles 50 and 51 of the Administrative Complaint, which are reproduced as follows: "Article 50: A… also sends documents VIII to XLIX, for illustrative purposes only, and all other documents are available in the accounts of the complainant and can naturally be made available to the tax authority for its analysis"; Article 51: Naturally, A… hereby offers to make itself available to the tax authority to provide any clarification that may be deemed necessary regarding this or any other aspect".

On 17.10.2012, Internal Service Note JTDA… is issued by the Administrative Law Division - Finance Department of Lisbon, addressed to the Tax Inspection Services Area B, Division VI, Team 65, with the following content: "(…) urgent clarification and issuance of opinion are requested (…) since documents were attached to the administrative complaint that may make it possible to assess the legitimacy of the VAT deductions made and, consequently, alter the direction of the conclusions resulting from the inspection analysis, enclosed is the original of the file containing the petition and attached documents (163 pages) for the purposes deemed appropriate." (cf. page 165 of the Administrative File attached to the case records);

On 15.11.2012, the Claimant sent to the Tax Authority, for attachment to the Administrative Complaint, a list of 43 pages, containing the identification, for each document on which the VAT deduction was based, of (i) the company name of the purchaser (ii) tax identification number of the purchaser (iii) company name of the supplier or service provider (iv) tax identification number of the supplier of the service provider (cf. pages 167 et seq. of the Administrative File attached to the case records);

On 26.12.2012, a bank guarantee was provided for suspension of the enforcement proceeding relating to the additional VAT assessments, in the amount of € 1,367,461.67 (this amount was subsequently increased on 19 April 2013 to € 1,418,692.40) (cf. document 4 attached to initial petition).

On 17.09.2013, the Tax Inspection Services remit to the Administrative Law Division - Finance Department of Lisbon the opinion requested in Internal Service Note JTDA… of that division, whose conclusion is as follows: "In view of the strong probability of success of a possible judicial challenge to the assessments in question, it would be ideal to proceed with the re-analysis of the refund request. However, the refund request dates from 27.05.2008, so as of the present date, more than 4 years have elapsed, and the right to assessment provided for in Article 45, no. 1 of the LGT has expired, making it impossible to make any correction to the refund requested by the taxpayer, so the useful effect of analyzing the refund request in light of the elements now provided is prejudiced by this fact" (cf. page 213 of the Administrative File attached to the case records).

On 17.12.2013, the Tax Authority requested from the Claimant the "support file containing additional information regarding invoices or equivalent documents in which A… deducted tax" protested to be attached in the Administrative Complaint, alleging that the same had not been attached to the file to date (cf. page 235 of the Administrative File attached to the case records);

On 31.01.2014, the Claimant sent the documentation requested by the Tax Authority, indicating that the same had already been sent in November 2012 (cf. page 237 of the Administrative File attached to the case records);

No new request was received after this date and until the date of denial of the Administrative Complaint on 28.09.2016 from the Tax Authority regarding documentation supporting the VAT deduction made, whether requesting clarifications regarding the documentation sent, whether requesting copies of invoices and equivalent documents, or whether requesting accounting excerpts (cf. Administrative File attached to the case records).

The requirements and references of invoices, import settlement forms, and intra-community stock transfer documents, attached by the Claimant to the Administrative Complaint as documents 8 to 49, were not analyzed in the administrative complaint proceeding by the Tax Authority (cf. Administrative File attached to the case records, omitted as to this analysis);

On 28.09.2016, the Claimant was notified of the total denial of the Administrative Complaint (cf. document 3 attached to initial petition).

The Claimant, for suspension of the tax enforcement proceeding no. …2012…, relating to non-payment of the assessments now contested, presented on 18.12.2012, to the Tax Office of Lisbon -…, a bank guarantee in the initial amount of € 1,367,461.67, as per document 5 attached to the initial petition, which was subsequently increased to the amount of € 1,418,692.40.

§2. Unproven Facts

It is not proven:

That the Belgian postal services had left at the above-mentioned address in n), (…), any notice or indication relating to the receipt of correspondence mentioned in n), o), p) and q), sent by the Tax and Customs Authority;

That the Claimant had communicated to the TA the change of its tax address from … to …, …, BELGIUM before the sending of the correspondence cited in n), o), p) and q), of the proven facts.

§3. Reasoning as to the Facts

The judge does not have the duty to rule on all alleged matters, but rather the duty to select only those which are relevant to the decision, taking into account the cause (or causes) of action that support(s) the claim formulated by the claimant (cf. Articles 596, no. 1 and 607, nos. 2 to 4, of the CPC, as amended by Law 41/2013, of 26/6) and to record whether it considers it proven or unproven (cf. Article 123, no. 2, of the CPPT).

According to the principle of free appraisal of evidence, the Tribunal bases its decision, in relation to the evidence produced, on its intimate conviction, formed from the examination and evaluation it makes of the means of proof brought to the case and in accordance with its experience of life and knowledge of persons (cf. Article 607, no. 5, of the CPC, as amended by Law 41/2013, of 26/6). Only when the probative force of certain means is pre-established in law (e.g., full probative force of authentic documents - cf. Article 371 of the Civil Code) does the principle of free appraisal not govern the appraisal of the evidence produced.

In the present case, the Tribunal's conviction was based on free appraisal of the positions taken by the Parties as to facts, on the copy of the Administrative File submitted by the TA and on the content of the documents attached to the case records and not contested.

The Tribunal considered unproven the matter referred to in 12 of § 2 [that the Belgian postal services had left at the above-mentioned address in n), (…), any notice or indication relating to the receipt of correspondence mentioned in n), o), p) and q), sent by the Tax and Customs Authority], founded on the insuperable doubt about such reality, with the consequences of evidentiary law arising from the provisions of Articles 414, of the CPC (applicable ex vi Article 29, of the RJAT) and 346, of the Civil Code.

III.2. LEGAL ISSUES

§1. Issues to be Decided

A - Notification to Present Elements Supporting the Right to VAT Deduction

Within the scope of the tax inspection procedure, the taxpayer (the Claimant) was notified to present elements regarding the exercise of the right to VAT deduction, in accordance with the following procedure (Cf Tax Inspection Report, at pages 21 to 28 of the PA):

On 07/06/2011, by registered mail with proof of receipt - office no.… – to the following address: …- BELGIUM;

On 29/07/2011, by registered mail with proof of receipt - office no.… – to the same address … .

The second notification was made following the return of the first, but the same was also returned.

In accordance with the provisions of no. 5 of Article 39 of the CPPT, it is presumed that the taxpayer was notified. Under the same legal provision, the taxpayer could provide proof of the prevention of its non-notification, which, however, it did not do.

Both notifications were made to the tax domicile as recorded, at the time, in the TA's registry.

In the case records, at page 16 of the PA, there is an exchange of emails with the RNPC about a request/communication of change of address of the taxpayer from …- BELGIUM to …– BELGIUM, whose process in that Registry was still under analysis in June 2012 [therefore much later than the date of the said notifications, which proves that at the time they were made by the TA], the tax address was …- BELGIUM.

The taxpayer was notified to exercise the right to hearing in the scope of the tax inspection procedure through office…, of 8/09/2011, sent to the address …- BELGIUM, which was returned by Belgian postal services (cf. reference made by the taxpayer itself at point 44 of its allegations).

Through the Belgian Tax Authorities, after diligence carried out by the Fraud Investigation and Special Actions Service Direction (DSIFAE), within the scope of administrative cooperation procedures provided for in Regulation (EC) 1798/2003, the draft report was delivered, on a date not determined, to the taxpayer, at the address …– BELGIUM, as per documents sent by the DSIFAE to the Finance Department of Lisbon, at pages 214 to 216 of the PA.

That is: the date of actual notification is not extracted from the case records and documents attached.

The notification of the final tax inspection report was made by registered mail with proof of receipt to the two following addresses: …- BELGIUM and…– BELGIUM

The notification sent to the first of the addresses mentioned was returned.

The notification sent to the second address was received by the taxpayer, with the proof of receipt signed on 20/12/2011, as per point A7 of the Information prepared by the Tax Inspection of the Finance Department of Lisbon following the request for collaboration that was requested of it by the Administrative Law Division of the same finance department (Cf pages 210 to 213, verso, of the PA).

The additional VAT assessments were issued on 17/12/2011 and communicated by registered mail to the taxpayer on 29/12/2011, as per printouts of the TA's computer system (cf pages 154 to 163 of the PA).

The deadline for payment of the additional assessments occurred on 28/02/2012, as per the same printouts referred to in the previous paragraph.

The administrative complaint was filed on 27/06/2012, on the 120th day following the payment deadline already mentioned (28/02/2012).

The Claimant alleges that it was never notified to present any documents, arguing that neither can its notification for this purpose be presumed.

In fact, Letter no.… sent by the TA to the Claimant for this purpose on 07.06.2011, by registered mail with proof of receipt, to the address …, was returned by Belgian postal services with the notation "Ne reçoit pas/plus le courrier a l'adresse indiquée". The same having occurred with Letter no. … sent on 26.07.2011 and later with Letter no. … (which contained in annex Letter no.…) sent on 08.09.2011.

The question therefore arises as to whether these notifications can be considered validly made, given that the letters sent were returned.

Let us examine this:

Article 39, no. 5 of the CPPT provides that: "In the event that the proof of receipt is returned or not signed because the recipient refused to receive it or did not collect it within the timeframe provided for in the postal services regulations and it is not proven that the taxpayer meanwhile communicated the change of its tax domicile, the notification shall be made within 15 days of the return by new registered mail with proof of receipt, and notification is presumed if the letter was not received or collected, without prejudice to the person notified being able to prove just impediment or impossibility of communicating the change of residence within the legal timeframe."

From this legal provision it follows that the presumption of notification contained therein only operates when there is refusal by the recipient to receive the notification or when notice is left at the recipient's tax domicile for collection of the letter with the notification, which has not been done, and provided that it is not proven that the taxpayer meanwhile communicated the change of residence to the TA.

That is, in the event of the return of the notification letter, and without proof of communication of the change of tax domicile, the TA must send a new letter within 15 days following, with notification then being presumed, unless there is proof of just impediment or impossibility of communicating the change of residence. Neither just impediment nor impossibility of communication occurred (nor were they alleged) in the case.

Ruling out from the outset the possibility of refusal by the recipient to receive the notification, given the facts determined in the present case, for the presumption of receipt of the second letter to operate, it is thus necessary that notice has been left at the recipient's tax domicile that the letter with the notification could be collected and that it is not proven the communication of change of tax domicile (emphasis ours) (In this sense, the Judgment of the Supreme Administrative Court has already decided, handed down on 16.01.2013, in proceedings 0141/11, where, making reference to the teachings of Jorge Lopes de Sousa, it is said that the presumption of notification only applies "when notice has been left and there is no just impediment to collection of the letter" (emphasis ours).

In the case sub judice, there was no refusal on the part of the Claimant to receive the notifications in question, nor did the TA succeed in proving, as was its responsibility, that notice was left in the mailbox of the Claimant's domicile as recorded in the correspondence sent, postal notice for collection of the same. Moreover, the TA states on pages 79 and 80 of Administrative File 2, that it is unaware whether a postal notice was left for collection of the communication sent, and this also cannot be extracted from the mentions made by the Belgian postal services.

It can thus be safely concluded that, as the presumption of notification referred to in Article 39, no. 5 of the CPPT does not apply here, the notifications in question must be considered ineffective, constituting such an illegality capable of challenge in accordance with Articles 99 of the CPPT and 2 of the RJAT.

There is thus no reason or valid basis for not recognizing the VAT deduction made by the Claimant and not annulling, on this ground and for this reason, the tax acts challenged.

B - Notification of VAT Assessments

In accordance with the provisions of Article 36 of the CPPT, "acts in tax matters that affect the rights and legitimate interests of taxpayers only have effect in relation to them when validly notified to them", and Article 77, no. 6 of the LGT, in the same vein, adds that their effectiveness depends on notification.

In this regard, the LGT provides in Article 45 that "the right to assess taxes expires if the assessment is not validly notified to the taxpayer within four years, unless the law provides otherwise".

The burden of proof of the carrying out of the notification rests, under Article 342, no. 1 of the CC, with the TA.

Now, from the elements brought to the case by the parties, it does not result that the TA has validly notified the Claimant of the same: the letters addressed to the Claimant to communicate the said assessments are unknown, the documents containing them, the means of notification, the address to which they were sent, whether there was return, whether there was a second notification... In the case records there are only "printouts" of computer records (doc. 55 attached with the arbitration request), which contain a CTT registration number for which no correspondence is found on the CTT website – "Search for objects". These computer record/"printouts", of merely internal nature, are in themselves insufficient to serve as proof of the notification of the assessments in question.

Now, failing the TA to prove that the Claimant was actually and validly notified of the said VAT assessments by 31.12.2011, it must necessarily be concluded that the right to assessment has expired, and consequently, that the same are illegal, in accordance with Article 94, no. 1 of the VAT Code.

C – Compensation for Undue Guarantee

The Claimant provided a bank guarantee to obtain suspension of tax enforcement instituted for coercive collection of the assessments now contested.

The LGT provides:

Article 53

Guarantee in Case of Undue Performance

1 - The debtor who, in order to suspend enforcement, offers a bank guarantee or equivalent shall be compensated in whole or in part for the losses resulting from its performance, should it have maintained it for a period exceeding three years in proportion of the success in administrative review, challenge or opposition to enforcement that has as its object the guaranteed debt.

2 - The timeframe referred to in the preceding number does not apply when it is verified, in administrative complaint or judicial challenge, that there was error attributable to the services in the assessment of the tax.

3 - The compensation referred to in no. 1 has as its maximum limit the amount resulting from the application to the guaranteed value of the rate of indemnity interest provided for in this law and can be requested in the administrative complaint or judicial challenge proceeding itself, or autonomously.

4 - Compensation for undue guarantee provision shall be paid by deduction from the revenue of the tax in the year in which the payment is made.

5.1. The assessments suffer from illegality attributable to the Services.

5.2. Since it is public and notorious that for the provision of bank guarantee services charges/commissions are paid to Banks depending, in particular, on the risk, value, and duration of the guarantee, it must be concluded that, although not alleged, the Claimant has borne [and certainly continues to bear] charges for the maintenance of the guarantees.

5.3. Having provided the guarantee for the total value of the assessments subject to this challenge, interest, costs, and other increases (Cf Article 199-6 of the CPPT) and going to obtain total success in this action, the requirements conferring on the Claimant the right to compensation are met in accordance with the cited Article 53 of the LGT.

5.4. It is certain that the compensation amount was not specified.

5.5. However, this would not necessarily have to be alleged, since whoever demands compensation does not need to indicate the exact amount of damages – Cf Article 569 of the Civil Code.

5.6. The quantification of the compensation shall thus have to be made in the enforcement of judgment stage and bearing in mind the limitations of its amount provided for in Article 53-3 of the LGT.

D – Other Issues Raised in the Case

The appraisal of the other issues raised in the case is prejudiced.

IV – DECISION

Accordingly, and for the reasons set out, this Collective Arbitration Tribunal decides:

a) To annul the act denying the administrative complaint;

b) To annul the Value Added Tax assessments and assessments of compensatory interest subject to these proceedings relating to the tax periods 2007.06/2007.07/2007.08/2007.09/2007.10, with numbers…, …, …, …, …, …, …, …, … and …, in the total global amount of € 1,041,410.79 (VAT in the amount of € 893,150.54 and compensatory interest in the amount of € 148,260.25);

c) To find the Claimant's request for compensation for undue guarantee well-founded;

d) To condemn the TA, under the terms set out above, to pay compensation to the Claimant for undue guarantee, with the amount thereof to be determined in enforcement of judgment;

e) To find the appraisal of all other issues raised in the case to be prejudiced; and

f) To condemn the Respondent in the costs of the proceedings.

V - VALUE OF THE CASE

In accordance with the provisions of Article 306, no. 2 of the CPC and 97-A, no. 1, subsection a) of the CPPT and 3, no. 2 of the Cost Regulations in Tax Arbitration Proceedings, the value of the case is set at € 1,041,410.79.

VI – COSTS

Under Article 22, no. 4 of the RJAT, the amount of costs (chargeable to the Respondent) is set at € 14,382.00, in accordance with Table I attached to the Cost Regulations in Tax Arbitration Proceedings.

Lisbon, 24 August 2017

The Collective Arbitration Tribunal,

José Poças Falcão

(Arbitrator President)

Maria Cristina Aragão Seia

(Adjunct Arbitrator)

Emanuel Augusto Vidal Lima

(Adjunct Arbitrator)