Process: 759/2014-T

Date: January 22, 2016

Tax Type: IVA

Source: Original CAAD Decision

Summary

CAAD Decision 759/2014-T addresses the formal requirements for VAT invoices under Article 36(5)(b) of the Portuguese VAT Code (CIVA), specifically concerning the obligation to include quantity and usual denomination of goods or services. The central issue involves whether invoices lacking precise descriptions can support the right to VAT deduction. The tribunal applied a teleological interpretation, emphasizing that formal requirements exist to enable tax administration supervision of tax obligations, including identification of operations, applicable rates, and collection. The decision extensively references CJEU case law, particularly the Kopalnia judgment (2012), establishing that formal defects alone cannot invalidate the right to deduction if substantive requirements are met, pursuant to the principle of fiscal neutrality. The tribunal noted a critical distinction between EU VAT Directive Article 226(6), which requires 'quantity' for goods and 'extent' for services, versus Portuguese law requiring 'quantity' for both. This difference necessitates flexible interpretation when services are involved, as services are not always directly measurable like tangible goods. The decision emphasizes that neither EU nor Portuguese law mandates precise or specific descriptions; rather, terms like 'nature' and 'usual denomination' refer to generic expressions covering categories of related operations. Member States cannot impose additional requirements beyond those in the VAT Directive or condition deduction rights on elements not expressly provided therein (Evita-K EOOD judgment). The ruling concludes that invoice sufficiency must be assessed based on whether the document enables exact tax collection and proper supervision, not on formal perfection. If an invoice achieves this functional purpose despite containing generic descriptions, it should be accepted for deduction purposes, with formal defects potentially subject to sanctions but not deduction denial.

Full Decision

relating to the "designation of the quantity and usual denomination of the goods transferred or the services provided", is intended, as was noted in the cited judgments, to ensure "that the Administration can effectively supervise the tax obligations", allowing "to identify the operation in such a manner that the due consequences can be drawn regarding the tax (its incidence, subjects, rate, collection, reimbursements, etc.)".

This functionalization of the formality now in question cannot, in any case, justify the total omission thereof, given its ad substantiam nature, already referred to.

A different case, however, will be that of assessing the sufficiency of the mentions placed in the invoices or equivalent documents, in compliance with the obligation in question.

That is: if the omission of the mention relating to the "quantity and usual denomination of the goods transferred or the services provided" cannot, in any case be justified, based on the teleology thereof, already the assessment of the suitability of the mentions placed to comply with that formal requirement should not, or rather, cannot, be abstracted from that teleology.

Thus, it is judged, should be in light of the purposes recognized for the formal requirement in question, confronted with the specificities of the specific case, that one should, unless better advised, formulate the judgment of sufficiency or not of a certain mention employed for its compliance. (...)"

For the purpose of exercising the right to deduction, the VAT Directive itself ("VAT Directive") requires the possession of an invoice (Articles 178 and 220), and as regards the elements that should mandatorily be contained therein, Article 226 (as relevant to the present decision) provides the following:

"1) The date of issue of the invoice;

  1. The sequential number, based on one or more series, that identifies the invoice uniquely;

  2. The VAT identification number, referred to in Article 214, under which the taxpayer carried out the delivery of goods or the provision of services;

  3. The VAT identification number of the purchaser or recipient, referred to in Article 214, under which the delivery of goods or the provision of services was carried out by which the latter is liable for the tax or a delivery of goods referred to in Article 138;

  4. The name and complete address of the taxpayer and the purchaser or recipient;

  5. The quantity and nature of the goods delivered or the extent and nature of the services provided;

  6. The date on which was carried out, or completed, the delivery of goods or the provision of services or the date on which the payment on account referred to in points 4) and 5) of Article 220 was made, insofar as that date is determined and is different from the date of issue of the invoice;"

In accordance with the provisions of the cited provision of the VAT Directive and CJEU case law, only the mentions contained in Article 226 of the VAT Directive should be contained in the invoices, and Member States cannot require other elements beyond those, nor make the exercise of the right to VAT deduction dependent on mentions or assumptions (as to the content of the invoices) that are not expressly provided for in the VAT Directive (Pannon Jeep Judgment of 2009-07-15, Case C-368/09, Evita-K EOOD Judgment of 2013-07-18).

However, "in accordance with the case law of that Court, the principle of neutrality requires that VAT deduction be granted if the substantive requirements have been met, even if the taxpayers have neglected certain formal requirements" (Cidália Lança, VAT Code and RITI, Notes and Comments, Coordination and Organization Clotilde Celorico de Palma and António Carlos dos Santos), namely, that handed down in the Kopalnia Judgment of 2012-03-01.

Regarding the case law that has been emanated by the CJEU in the matter of formal requirements of invoices for the purpose of tax deduction, we can conclude as written by the Authors Miguel Durham Agrellos and Paulo Pichel (in VAT Notebooks 2015, Almedina Publisher, pages 210 and 211):

"The formal requirements established in the VAT Directive, or which it allows Member States to establish, should be aimed at ensuring the exact collection and correct supervision of the application of the tax;

Formal defects cannot, by themselves, put the right to deduction in question given its importance in the mechanics of the tax, guaranteeing the realization of the principle of neutrality. Such defects may, at most, and by themselves, give rise to the application of sanctions;

If a particular invoice, although containing formal defects, allows to ensure the exact collection and respective supervision of the tax, should be accepted for the purpose of exercising the right to deduction;

If, on the other hand, such invoice is not capable of ensuring the exact collection and respective supervision of the application of the tax, should be rectified during the inspection procedure, with the necessary elements being added to ensure the exact collection and respective supervision. If this does not occur in this period, the tax administration should not be obliged to consider the new elements, having only as reference the invoice initially issued, for the purpose of admitting the exercise of the right to deduction, being able to refuse it".

From the comparison of the aforementioned community rule (Article 226, no. 6) with the domestic one [Article 36, no. 5, paragraph b)] results, immediately, that the latter does not distinguish, as is mentioned in the cited arbitral decision handed down in case no. 411/2014-T, whose understanding that we follow here "as to the type of mention to be made in the invoice or equivalent document, between goods and services.

Indeed, while the community rule refers that the goods involved in the factured transaction should be mentioned, in addition to their nature, by their quantity, and that the services should be mentioned by their extent, the national rule provides that both goods and services should be mentioned by their usual denomination and quantity.

This distinction, however, should be considered sufficient to conclude that, at least, the concept of quantity used by the rule of paragraph b) of no. 5 of Article 36 of the VAT Code cannot assume the same meaning when it is a matter of goods and when it is a matter of services.

In fact, while the former, by their material nature, will always be, by definition, directly measurable, services not always will be. Hence why the VAT Directive has used different terms as regards one and the other object of transactions subject to VAT.

Finally, and still as regards the interpretive factors to be taken into account in the legal operation that is now before us, one must also note that both the community rule and the national rule do not state that the descriptive mention of the goods or services must be precise or specific. On the contrary; the terms used ("nature", "usual denomination"), directly refer to generic expressions that, encompassing the concrete operations practiced, apply to a diversity of related operations, which share with it the "nature" or are susceptible to being covered by the same usual denomination.

One cannot fail to take into account here, on the one hand, the specificity of the VAT, which leads to it intervening in practically all economic transactions that materialize in the European space, so that, naturally, in the conception of its legal regime care was taken not to create formalities, beyond those strictly necessary, that hinder the operability and capacity to act of the economic agents. For what now matters, this concern will be reflected, moreover, in the admissibility that those employ in the descriptive of their respective invoices, expressions that, identifying in a generic manner the goods or services supplied, are susceptible of being used repetitively, so as to minimize the bureaucratic work (and, necessarily, hindering of economic activity) necessary to comply with the accessory tax obligation that is now before us.

On the other hand, and still in the sense of the deliberate acceptance of the genericity of the descriptive terms to be used in the mandatory mention relating to the goods or services provided in operations subject to VAT, should also be considered the already detected functionalization of the formal requirement in question, to the needs of supervision and control by the TA.

This circumstance should be duly combined, by way of the systematic element, with the level of abstraction employed by the regulation of the tax in question itself. Indeed, throughout the VAT Code itself and its respective annexes, the various types of services are always described in a more or less abstract manner, taking into account, precisely, their "nature" or "usual denomination", according to the relevance they have for its legal regime.

It should, in sum and for all that has been said, be this the "touchstone" for assessing the sufficiency or otherwise of the mentions placed in the invoices or equivalent documents, for the purpose of complying with the provision of paragraph b) of no. 5 of Article 36 of the VAT Code.

That being stated, it is now important to verify whether the invoices whose VAT was disregarded by the TCA meet the aforementioned formal assumptions, since according to the grounds that motivated the assessment, subject of the present case, the other assumptions for the exercise of the right to deduction, namely the substantive ones, were not put in question, nor the existence of any fraudulent indication by the Claimant.

Thus, with regard to the invoices issued by F…, S.A., B…, LDA., E…, UNIPESSOAL, the TA did not accept the deduction of VAT because it considers that the usual denomination of the services, the quantity and date on which the services were performed were not mentioned therein.

Let us see.

According to the settled facts, the aforesaid invoice contains the mention "Merchandising Service/Product Exhibition in Stores … per month of Oct/12" - PO…", indicating that the quantity is 1, followed by the unit price of € 4,583.02, with the respective VAT rate (23%) indicated.

When describing "merchandising service/Product exhibition in stores" one cannot fail to consider that such designation allows sufficiently to identify the nature of the services provided, without it being necessary to specify which techniques were used.

As the Claimant alleges "results from the definition enshrined in the Portuguese Language Dictionary of Porto Publisher "merchandising is the set of techniques for promoting the sale of a product, based on the study of consumer behavior and expectations and seeking to maximize and profitability of sales", so the designation described there is sufficient for the purposes of complying with paragraph b) of no. 5 of Article 36 of the VAT Code.

As regards quantity, as stated above, although it is a service provision, which by its own essence is not measurable, the invoice still indicates the quantity of 1. As for the date, as alleged by the Claimant, the invoice in question contains the mention "the services were completed on the date of issue of this document, Article 36 of the VAT Code", so it is understood that the date was indicated contrary to what was alleged by the TA.

Thus, it is considered that the mentions contained in the aforesaid invoice minimally comply with the requirements contained in the VAT Directive and no. 5 of Article 36 of the VAT Code, it being possible for the TA to ensure the control of the calculation of the tax and supervision thereof, so the correction should be annulled and the deduction of the tax in the amount of 1,054.09 euros accepted.

With regard to the invoice issued by B…, LDA ("B"), on 13-11-2012, according to the settled facts, it contains the following mention describing "Sound equipment C2T, gantry and announcer", with the quantity of 1, followed by the unit price of € 4,181.00, the VAT rate (23%), the total net of tax, as well as the incidence and the total VAT value. The description also includes the mention of "PO…, of 12/11/2012".

It also results from the settled facts that invoice no. …/2012-A, issued by H…, whose tax was not disregarded, contains in its description the mention "Service provision C2T Fair of the Corridor H0'12". Such mention is also contained in invoice no. A-…, issued by "D…", Lda. Therefore, it can be concluded that the reference "C2T" is the usual denomination of the event in question.

Being a single invoice, given the designation of the issuing entity and the type of service provided by it, it is considered that the services and their nature are minimally identified, being perceptible that it is related to a sporting event-race, rental of sound equipment, a gantry and the services of an announcer/presenter.

As regards quantity, as stated above, although it is a service provision and a single one, the invoice still indicates the quantity of 1. As for the date, in accordance with the provision of paragraph f) of no. 5 of Article 36 of the VAT Code, invoices must contain the date on which the services were performed, if that date does not coincide with the date of issue of the invoice, so it is considered that the services were performed on the date of issue of the invoice.

It is considered that the mentions contained in the aforesaid invoice minimally comply with the requirements contained in the VAT Directive and no. 5 of Article 36 of the VAT Code, it being possible for the TA to ensure the control of the calculation of the tax and supervision thereof, including the applicable rate, so the correction should be annulled and the deduction of the tax in the amount of 961.63 euros accepted.

As regards the invoice no.…, issued by E…, UNIPESSOAL LDA., according to the settled facts, it contains the mention "…–…y – HO AF Initiative – Service provided in our facilities - PO…", with the quantity of 1 for each of those services, followed by the unit price of € 480.00 and € 4,520.00, and also mentioning that "the articles/services contained in this document were made available/provided on this date.

Although it is considered that the requirements relating to quantity and date are fulfilled, given what was previously explained, however, based on its description it cannot be considered that the nature of the services is indicated therein, thus making it impossible for the TA to carry out the control and supervision of the tax, so the invoice in question does not minimally satisfy the legal requirements as to the mandatory mentions that must be contained in the invoices, imposed both by the VAT Directive and by no. 5 of Article 36 of the VAT Code, combined with no. 2 and 6 of Article 19 of the VAT Code, and thus the tax cannot be deducted by the Claimant.

With regard to the invoices issued by service providers C…, S.A. and D…, the TA did not accept the deduction of VAT because it considers that the description is insufficient, alleging that the services are not itemized nor its unit or total quantity.

Let us see.

As regards the invoice no. …/2012, issued by C…, S.A., on 2012-10-31, according to the settled facts, it contains the mention "Remuneration for October 2012 regarding the set of services provided in the Building…, in accordance with the Services Provision Contract signed on 09/09/2009", indicating € 27,951.29 as value, followed by the 23% VAT rate, with the VAT value of € 6,428.80 itemized.

Given the mentions inserted in the text of the invoice in question, it cannot fail to be concluded that, being a service provision of a continuous character, on a monthly basis, resulting from a contract, not being thus quantifiable, by nature, the reference to the indication of the extent (time) is considered to be fulfilled, since there it is indicated that the services relate to the month of October 2012.

As regards the usual denomination of the services provided, the aforementioned text states that it is "a set of services provided in the Building…, in accordance with the Services Provision Contract signed on 09/09/2009". It cannot fail to be considered that there the nature of the services is referred to, albeit in an incipient manner, because the service provider, in issuing the invoice, referring in the body of its description to "the set of services provided in the Building…", by express reference to the services provision contract with indication of the respective date, can assume that it incorporates in the document (invoice) the set of services indicated and itemized in the identified contract (whose itemization consists of 4 pages), such mention being the denomination usually designated in the contractual relation established between the Claimant and C… for a set of services – "composite service provision" (see arbitral decision handed down in case 61/2013-T, under the terms of which it is considered that the indication of the services can be made in a document annexed to the invoice, as long as its existence in the same is properly referenced in the invoice). Furthermore, it is not insignificant, as results from the proven facts, that the Claimant has its facilities in the aforementioned Building…

Thus, it allows the TA to ensure the supervision and collection of the tax, so the invoice in question minimally satisfies the legal requirements as to the mandatory mentions of the invoices required both by the VAT Directive and by no. 5 of Article 36 of the VAT Code, combined with no. 2 and 6 of Article 19 of the VAT Code, and thus the corresponding tax should be deducted by the Claimant.

Regarding the invoices issued by D…, Lda., it results from the settled facts that they contain the following mentions:

"a) invoice no. A-…: "…– Campaign … ESS – Promotional Labels and various…–…, as per your PO Number…", quantity 1;

b) invoice no. A-…: "Campaign … in ..., ... and ..., as per your PO Number…", quantity 1;

c) invoice no. A-…: "Campaign…, …, Camp. Action Sports …, as per your PO Number…", quantity 1;

d) invoice no. A-…: ""Campaign…, …, Production and Assembly, as per your PO Number…", quantity 1;

e) invoice no. A-…: "Campaign…, …, Production and Assembly as per your PO Number…", quantity 1; and,

f) invoice no. A-…: "Campaign … in ..., ... and ..., Production and Assembly, as per your PO Number…","quantity 1;"

Considering the content of the description in each of the invoices identified above and the comparison between them, as well as the designation of the service provider, it stands out that these are services of production and assembly of advertising campaigns for the Claimant's products, whose campaigns are identified in the text of the aforementioned invoices, being used a usual denomination for the set of services provided indicated therein, and as regards quantity, as stated above, although it is a service provision, which by its own essence is not measurable, the invoice still indicates the quantity of "1", so it is considered that the mandatory mentions are sufficiently fulfilled in light of the provisions of paragraph b) of no. 5 of Article 36 of the VAT Code and the VAT Directive, it being possible for the TA to ensure the exact collection and supervision thereof, so the correction should be annulled and the deduction of the tax accepted, in the total amount of 16,934.28 euros.

In summary, it is considered that the invoice issued by service providers E…, UNIPESSOAL (invoice no.…) does not comply with the legally required mentions, it not being possible to consider that it was issued in the legal form, under the terms set out in Article 19, nos. 2 and 6, combined with paragraph b) of no. 5 of Article 36 of the VAT Code.

As for the other invoices, it is considered that they minimally comply with the mentions required under the terms set out in Article 19, nos. 2 and 6, combined with paragraph b) of no. 5 of Article 36 of the VAT Code, so the VAT assessment act, subject of the present arbitral process, should be partially annulled, as it suffers from the defect of violation of the provisions of those rules, by error in its assumptions.

Consequently, the annulment of the aforesaid VAT assessment act also determines the annulment of the compensatory interest assessment act, since, as the aforementioned tax is not due, in the terms set out, compensatory interest cannot be demanded for the part corresponding to the corrections that should be annulled.

IV. RESTITUTION OF TAX PAID AND INDEMNITY INTEREST

The Claimant also requests the restitution of the tax already paid, plus the payment of indemnity interest.

Let us see.

Paragraph b) of no. 1 of Article 24 of the LRAMT provides that the TA must "restore the situation that would have existed had the tax act subject to the arbitral decision not been undertaken, adopting the acts and operations necessary for this purpose", in the exact terms of the success of the arbitral decision in favor of the taxpayer and until the end of the deadline provided for the spontaneous execution of the sentences of the judicial tax courts, in case no appeal or challenge has been filed against the arbitral decision that fell on the merits of the claim.

Indeed, already Article 100 of the LGT - under the heading "effects of the decision favorable to the taxpayer" - provides that the "tax administration is obliged, in case of total or partial success of complaints or administrative appeals, or of a judicial process in favor of the taxpayer, to the immediate and full restoration of the situation that would have existed had the illegality not been committed, including the payment of indemnity interest, under the terms and conditions provided by law".

Therefore, in light of the provision of Article 100 of the LGT and paragraph b) of no. 1 of Article 24 of the LRAMT, it is clear that in this case the Claimant has the right to the restitution of the tax paid, following the declaration of illegality of the assessment act, subject to the ruling of the present case, in the portion corresponding to the annulled portion.

Let us see regarding the request for payment of indemnity interest.

No. 5 of the cited Article 24 of the LRAMT further provides that the "payment of interest, regardless of its nature, is due, under the terms provided by the general tax law and the Tax Procedure and Process Code". It results from the aforementioned legal provision that in case of success of the arbitral decision in favor of the taxpayer there will be occasion for the payment of indemnity interest, under the terms of nos. 1 and 2 of Article 43 and Article 100 of the LGT.

No. 1 of Article 43 of the LGT establishes that "indemnity interest is due when it is determined, in a gracious appeal or judicial challenge, that there was an error attributable to the services from which results the payment of the tax debt in an amount higher than the legally due". Thus, as Jorge Lopes de Sousa tells us, in "Guide to Tax Arbitration", Almedina, March 2013, page 223, the right to indemnity interest depends on the verification of the following requirements:

"- that there is an error in a tax assessment act;

  • that it be attributable to the services (directly or by way of generic guidance);

  • that the existence of that error is determined in a process of gracious appeal or judicial challenge;

  • that as a result of that error there has been the payment of a tax debt in an amount higher than the legally due".

In the case at hand, there is no doubt that the tax assessment act, subject to the present arbitral decision, was caused by an error attributable to the services, that is, an error in the assumptions, in light of the considerations described above, and to which reference is made. That error resulted in the payment of the tax, according to the matter proven.

Therefore, as all the requirements are met, the Claimant has the right to indemnity interest, to be calculated in accordance with the terms established in the applicable legislation, namely Law 16/2008, of 1 April.

V. RULING

In view of all the foregoing and in light of the evidence presented, this Arbitral Tribunal hands down the following ruling:

  1. Declares the partial illegality of the VAT assessment act no. 2013…, relating to the period of November 2012, in the amount of € 12,848.48, issued by the Tax and Customs Authority, to the extent that it includes corrections relating to invoices issued by F…, S.A., B…, LDA., C…, S.A. and D…, Lda., in the total amount of € 18,650.48 (corresponding to the VAT amounts of € 1,054.09, € 961.63, € 6,428.80 and € 16,934.28, respectively), and in consequence annuls the aforesaid assessment in that portion;

  2. Declares the illegality of the compensatory interest assessment act relating to the aforesaid assessment, in the portion corresponding to the annulled tax corrections, and in consequence annuls the same in that portion;

  3. Orders the Tax and Customs Authority to restore to the Claimant the tax paid in the amount of € 4,547.62 (corresponding to the annulled corrections and the compensatory interest), plus the respective indemnity interest, calculated under the terms of the law;

  4. Declares the dismissal, for lack of jurisdiction, of the Respondent from the instance as to the request for "recognition of the Claimant's right to reimbursement requested in the periodic statement for the period of November 2012, in the amount of EUR 13,680.32", as established in the preliminary objections section;

  5. In accordance with the provisions of Article 24, no. 2 of the LRAMT, and considering that this decision was favorable to the Claimant in the matter of the exercise of its right to deduction, the Claimant is dismissed from the payment of the arbitration fee.

Drawn up at the headquarters of CAAD on [date].

The Arbitrator,

[signature]

Frequently Asked Questions

Automatically Created

What are the formal requirements for VAT invoices under Article 36 of the Portuguese VAT Code (CIVA)?
Article 36(5)(b) of the Portuguese VAT Code requires invoices to contain the quantity and usual denomination of goods transferred or services provided. Other mandatory elements under Article 36 include: sequential numbering, date of issue, VAT identification numbers of supplier and purchaser, complete names and addresses, taxable amount by rate or exemption, applicable VAT rate, amount of tax due, and the date goods/services were made available. These requirements align with EU VAT Directive Article 226, though Portuguese law uniquely requires 'quantity' for both goods and services, whereas the Directive requires 'quantity' for goods and 'extent' for services.
Can the right to deduct VAT be denied solely due to formal deficiencies in invoices?
No. According to CJEU case law incorporated into Portuguese arbitral jurisprudence, particularly the Kopalnia judgment (2012), the right to VAT deduction cannot be denied solely based on formal invoice deficiencies. The principle of fiscal neutrality requires that deduction be granted if substantive requirements are met, even when taxpayers have neglected certain formal requirements. Formal defects may justify administrative sanctions but cannot, by themselves, invalidate deduction rights. An invoice with formal imperfections must be accepted for deduction purposes if it enables the tax administration to ensure exact tax collection and proper supervision of the operation, allowing identification of the transaction, applicable rates, and parties involved.
How does the CJEU case law influence Portuguese arbitral decisions on VAT invoice requirements?
CJEU case law exercises decisive influence on Portuguese tax arbitration decisions regarding VAT invoice requirements. The CAAD systematically applies principles established in judgments such as Pannon Jeep (2009), Evita-K EOOD (2013), and particularly Kopalnia (2012), which establish that Member States cannot impose invoice requirements beyond those specified in the VAT Directive or condition deduction rights on elements not expressly provided therein. Portuguese arbitral tribunals adopt the CJEU's teleological interpretation approach, prioritizing the functional purpose of formal requirements—enabling tax supervision—over strict formalism. This influences decisions by requiring assessment of whether an invoice, despite formal defects, achieves its essential purpose of allowing tax administration to verify the operation and ensure correct taxation.
What supporting documentation can taxpayers provide to validate VAT deductions when invoice descriptions are challenged?
When invoice descriptions are challenged, taxpayers can provide supplementary documentation to validate VAT deductions, including: detailed contracts or service agreements specifying the nature of transactions; delivery notes or transport documents for goods; correspondence with suppliers clarifying transaction details; payment records and bank statements demonstrating actual transactions; purchase orders and procurement documentation; technical specifications or project documentation for services; accounting records detailing the economic purpose and business use; and any other contemporaneous documentation evidencing the actual supply and its characteristics. During tax inspections, authorities must allow taxpayers to rectify invoices by adding necessary elements to ensure proper tax collection and supervision. If such rectification occurs during the inspection procedure, the corrected invoice should be accepted for deduction purposes.
What is the procedure for challenging a VAT assessment through tax arbitration (CAAD) in Portugal?
To challenge a VAT assessment through tax arbitration in Portugal, taxpayers must file a petition with the Centro de Arbitragem Administrativa (CAAD) within 90 days from notification of the tax assessment or enforcement notice. The petition must identify the contested act, state the factual and legal grounds, specify the relief sought, and include supporting documentation. Filing requires payment of an initial fee. The CAAD assigns an arbitral tribunal (single arbitrator or three-member panel depending on claim value). Proceedings follow an adversarial structure: petition, tax authority response, possible reply/rejoinder, evidentiary phase if necessary, and final hearing. The tribunal issues a binding decision with the same effects as a court judgment. Arbitration typically concludes within 6-12 months, offering a faster alternative to administrative courts while maintaining full judicial review of tax assessments.