Summary
Full Decision
ARBITRAL DECISION
The Arbitrators José Pedro Carvalho (Presiding Arbitrator), Clotilde Celorico Palma and António Carlos dos Santos, designated at the Centre for Administrative Arbitration to form an Arbitral Tribunal, hereby agree on the following:
ARBITRAL DECISION (consult full version in PDF)
I – REPORT
On 2 March 2018, A..., SA., NIPC..., with registered office at Rua..., ..., ...-... Lisbon, filed a request for constitution of an arbitral tribunal, pursuant to the combined provisions of articles 2 and 10 of Decree-Law no. 10/2011, of 20 January, which approved the Legal Framework for Arbitration in Tax Matters, as amended by article 228 of Law no. 66-B/2012, of 31 December (hereinafter, abbreviated as RJAT), seeking a declaration of illegality of the following acts of VAT assessment and respective interest, relating to periods 201202 to 201212, in the amount of €1,720,243.61, and of the implied rejection of the administrative appeal and hierarchical appeal, which had the same as their object:
To support its request, the Applicant alleges, in summary, that it results from the proven facts and that frame the operations under analysis, as well as from the applicable rules, that we are in the presence of operations that are exempt, by application of item 29 of article 9 of the VAT Code.
On 05/03/2018, the request for constitution of the arbitral tribunal was accepted and automatically notified to the Tax Authority (AT).
The Applicant did not proceed to the appointment of an arbitrator, so, pursuant to the provisions of paragraph a) of article 6(2) and paragraph a) of article 11(1) of the RJAT, the President of the CAAD Deontological Council designated the signatories as arbitrators of the collective arbitral tribunal, who communicated their acceptance of the appointment within the applicable deadline.
The Applicant proceeded to the appointment of an arbitrator, having appointed Prof. Dr. Clotilde Celorico Palma, pursuant to article 11(2) of the RJAT. Pursuant to article 11(3) of the same legislation, the Respondent appointed as arbitrator Prof. Dr. António Carlos dos Santos.
The arbitrators appointed by the parties were appointed and accepted their respective charges.
Following the request presented by the arbitrators designated by the parties, a presiding arbitrator was appointed, pursuant to article 6(2)(b) of Decree-Law no. 10/2011, of 20 January, who is the herein Reporter, and who, within the applicable deadline, also accepted the charge.
On 07-05-2018, the parties were notified of these appointments and did not express the intention to refuse any of them.
In accordance with the provisions of paragraph c) of article 11(1) of the RJAT, the collective Arbitral Tribunal was constituted on 28-05-2018.
On 29-06-2018, the Respondent, duly notified for that purpose, filed its response defending itself through contestation.
By request filed on 13-07-2018, the Applicant requested the use, in the present proceedings, of the testimony given in arbitral process 246/2017T of the CAAD.
Notified to comment on that matter, the Respondent said nothing.
In light of the foregoing, and pursuant to the provisions of the said article 421 of the Code of Civil Procedure, applicable pursuant to article 29(1)(e) of the RJAT, the requested use of the testimony given in process 246/2017T of the CAAD was granted.
Pursuant to paragraphs c) and e) of article 16 and article 29(2), both of the RJAT, the holding of the meeting referred to in article 18 of the RJAT was dispensed with.
Having been granted a deadline for the presentation of written arguments, these were presented by the Applicant, commenting on the evidence produced and reiterating and developing its respective legal positions.
By the Applicant, requests were presented to the proceedings reporting the issuance, in the month of September 2018, of new acts of assessment of Compensatory Interest, with reference to periods 201202 to 201212, with the same grounds as the acts previously issued.
Furthermore, the Applicant requested that the proceedings continue against the said VAT Interest Assessments.
The Applicant also attached to the proceedings the decisions of the administrative appeals that determined the annulment of VAT assessments of the years 2013 to 2015.
The contradictory principle was observed regarding the aforementioned requests presented by the Applicant.
The deadline referred to in article 21(1) of the RJAT was extended twice, pursuant to article 21(2) of the same legislation.
It was indicated that the final decision would be notified by the end of the deadline provided for in article 21(1) of the RJAT, as extended.
The Arbitral Tribunal is materially competent and is regularly constituted, pursuant to articles 2(1)(a), 5 and 6(2)(b) of the RJAT.
The parties have legal personality and capacity, are legitimate and are legally represented, pursuant to articles 4 and 10 of the RJAT and article 1 of Ordinance no. 112-A/2011, of 22 March.
The proceedings do not suffer from any nullities.
Thus, there is no obstacle to the examination of the merits of the case.
Having seen everything, it is necessary to deliver
II. DECISION
A. MATTERS OF FACT
A.1. Facts established as proven
The Applicant has as its main activity the "Rental of Real Property" (CAE 68 200), with the object of the rental, purchase, sale or resale of real estate, management of own real property, administration and operation, provision of related services and other related activities.
The present Applicant was constituted on 23-12-2009 and initiated its activity on 30-12-2009, being classified as an exempt taxable person pursuant to article 9 of the VAT Code, taking into account the activity commencement declaration that was duly presented.
The Applicant belongs to a group of companies whose share capital is held by B..., SGPS, with the share capital of the latter being wholly held by group C..., with registered office in Germany.
The Applicant "was created to centralize all real property where group companies conduct their activities, with the intention that these properties would not be subject to variations in the rental market".
The group's real property assets consisted of real properties where hemodialysis clinics were located.
For the purposes of determining the fair market value of the real properties to be transferred to the Applicant, an evaluation was requested from D..., an international and multidisciplinary consulting firm, in the fields of architecture, urban planning and property evaluation.
The valuation of the assets had as its object the determination, as of April 2009, of the "fair market value of the real properties," that is, the value at which each property could be exchanged in an open, competitive and free market following adequate exposure.
From the valuation report prepared, it states, among other things, the following:
"The properties were valued on the assumption of the alteration of existing uses as of the valuation date by others more frequent in the market, such as commerce and services".
The properties were valued at fair market values, taking into account their potential uses, such as commerce and services, since there would be a mere transfer of empty physical spaces, without any equipment and infrastructure that would permit their characterization as clinics, to remain within the assets of the entities responsible for the operation of those same clinics.
The properties that were owned by B..., SGPS were transferred, without any equipment and/or furniture, to the assets of the present Applicant, which assumed the management of the said properties.
The equipment and furniture that comprised each of the hemodialysis clinics – which were in operation on the date of the transfer of their respective properties – were not transferred, continuing within the sphere of the entities that operated each of the clinics, as integral parts of their respective establishments.
The acquisitions of said properties were carried out in the year of the Applicant's constitution, between 29 and 31 December, with rental contracts being drawn up on that precise date, with the exception of buildings that were still under construction, located in Évora and Portalegre.
For these latter properties, the rental contracts were drawn up later, on 01-05-2012 and 02-09-2010.
The properties were acquired from various companies which, in the meantime, were merged into E..., S.A., currently F..., S.A.
The said rental contracts and amendments are characterized by the following specificities:
- rental for an indeterminate period;
- the leased premises are intended for the installation and operation of a medical clinic, for the conduct of the activity that constitutes the purpose of the lessee;
- the rental contracts had as their object the properties themselves, designated as "leased premises";
- the lessee is authorized to carry out at the leased premises the works necessary to comply with the technical requirements legally required for the conduct of the activity it develops there.
The Applicant set an initial rent, determined as the result of a percentage of the expected business value, in the amount of 18.6%, rent which in turn is updated annually, in accordance with the rent adjustment coefficient provided for in specific legislation.
Upon the transfer of the already occupied properties, the transferring parties retained ownership of all elements constituting the complex of goods and rights that constituted each of the clinics.
The present Applicant does not have, nor did it have on the date of the conclusion of the rental contracts, nor during the fiscal year to which the assessment acts relate, any equipment, utensils or furniture related to the operation of medical clinics, nor specifically hemodialysis clinics.
The present Applicant does not have, nor has it ever had in its staff, specialized personnel such as doctors and nurses.
The present Applicant has never been the holder of operating licenses for hemodialysis clinics.
The operating licenses necessary for the opening and operation of the hemodialysis clinics were issued in the name of each of the entities operating the clinics under consideration, currently in the name of F..., SA.
The rental contracts entered into did not have associated any provision of services, nor the contracting of supplies of electricity, water and telephone, nor the respective charges.
The operation of hemodialysis clinics involves the existence of specific electrical, water and sewer networks that connect the pre-existing infrastructure (of the property itself) and the various control, sterilization and treatment equipment, and between these and panels that are connected to hemodialysis chairs.
The tubing, which includes panels, tubes and conduits, water and sewer treatment installations (pumps and filters), is removable (to ensure sterilization without the need for masonry works).
The equipment relating to the hemodialysis clinics in Évora and Portalegre, whose properties were acquired by the Applicant at a time prior to the clinic's entry into operation at those properties, are recorded in the lessee's fixed assets, with the cost associated with each of those elements actually borne by those entities.
For F... SA, it is crucial to ensure that, in cases of termination of rental contracts, the property is delivered decharacterized to the landlord, to ensure that no other entity, following the abandonment of the space by F... SA, may subsequently occupy it, by installing a competing hemodialysis clinic, and that, if it does, it will necessarily have to incur all the adaptation costs necessary, as originally borne by F... SA and without being able to benefit from the technical advantages of the latter.
The Applicant was subject to an inspection procedure carried out by the Lisbon Finance Department, pursuant to Service Order no. OI2016..., of 25 February.
By Official Letter no. ..., dated 3 November 2016, issued by Department B - Division IV - Team 41, of the Tax Inspection area, of the Lisbon Finance Department, the Applicant was notified to comment, if it so wished, in the exercise of its right to be heard, on the Draft Corrections to the Inspection Report.
By Official Letter no. ..., of 29 November 2016, issued by Department B - Division IV, of the Tax Inspection area, of the Lisbon Finance Department, the present Applicant was notified of the Corrections resulting from the Inspection Action for the fiscal year 2012, which, maintaining the previously proposed corrections, determined corrections in the amount of €1,584,291.95.
The Inspection Report states, among other things, the following:
[content of inspection report excerpts]
Following the notified corrections, the Applicant was notified of the VAT and Interest Assessment Statements for periods 201202 to 201212, the subject of the present arbitral action.
On 3 February 2017, the present Applicant proceeded to pay the said assessments.
On 9 May 2017, the Applicant filed an administrative appeal having as its object the VAT and Interest Assessment Statements for periods 201202 to 201212, the subject of the present arbitral action, to which entry number 2017... (10-05-2017) was assigned.
On 6 October 2017, the present Applicant, given the formation of the implied rejection of the administrative appeal filed, lodged a hierarchical appeal against the said Assessment Statements.
In the course of the present arbitral proceedings, the Applicant was notified of VAT Interest Assessment Statements, with reference to periods 201202 to 201212, that date from September 2018, in the amount of €246,683.42, with reference to Compensatory Interest, as per the following table:
[content of assessment statements]
The VAT Interest Assessment Statements described above relate to the same taxable person (the present Applicant), tax (VAT) and taxation periods (201202 to 201212) and have the same nature (VAT Interest) as the VAT Interest Assessments that were already the subject of the present proceedings.
The amount assessed in those VAT Interest Assessment Statements corresponds precisely to the amount assessed as Compensatory Interest in the VAT Interest Assessment Statements contested in the present proceedings.
The same Account Settlement Statements for VAT Interest Assessments make mention in the "Description" column of the reversal of the assessment of the same period, issued in 2016 and subject of the present process and a credit available whose value corresponds precisely to the amount assessed as default interest in the VAT Interest Assessment Statements contested, subject of the present proceedings and issued in 2016.
The Applicant filed an administrative appeal of the official VAT assessments relating to periods in the years 2013 to 2015, carried out on the same grounds of fact and law as the assessments subject of the present arbitral action, and a decision of approval was issued, determining the annulment of those assessments, based on information no. 2114 of 2018-12-20, from DSIVA, which considered that "the rental operations, as presented in the information request of the Lisbon Finance Department, should be considered as an operation exempt in the sense of paragraph 29), of article 9 of the VAT Code, with the auxiliary operation of adaptation of the rented space to the activity to be conducted by the lessee following the same tax treatment as the principal operation."
A.2. Facts established as not proven
With relevance to the decision, there are no facts that should be considered as not proven.
A.3. Grounds of the proven and not proven matters of fact
Regarding the matters of fact, the Tribunal does not have to pronounce itself on everything that was alleged by the parties; rather, it has the duty to select the facts that matter for the decision and to distinguish the proven matter from the not proven (see article 123(2) of the CPPT and article 607(3) of the CPC, applicable by virtue of article 29(1)(a) and (e) of the RJAT).
Thus, the facts relevant to the judgment of the case are chosen and defined according to their legal relevance, which is established in light of the various plausible solutions of the legal question(s) (see previous article 511(1) of the CPC, corresponding to current article 596, applicable by virtue of article 29(1)(e) of the RJAT).
Therefore, considering the positions assumed by the parties, in light of article 110(7) of the CPPT, the documentary and testimonial evidence, and the administrative proceeding file attached to the proceedings, the facts listed above were considered proven, with relevance to the decision, taking into account that, as was written in the Judgment of the South Administrative Court of 26-06-2014, delivered in proceedings 07148/13, "the probative value of the tax inspection report (...) may have probative force if the assertions contained therein are not contested".
In particular, the facts established as proven in points 10, 11, 17, 18, 19, 20 and 24 result from the documentary evidence provided, which was duly corroborated by the testimonial evidence provided, which was coherent and with sufficient certainty so as not to raise reasonable doubts as to the occurrence of the facts in question, whereas the facts established as proven in points 23 and 26 rest essentially on the testimonial evidence referred to, assessed in light of the documentary evidence available and the overall context evidenced by the remaining facts established as proven.
Allegations made by the parties and presented as facts were not established or not established as proven, consisting of strictly conclusive assertions, incapable of proof and whose veracity must be assessed in relation to the concrete matters of fact consolidated above.
B. LAW
a. Preliminary Issue
As the Applicant itself reported in the proceedings, and was not contested by the Respondent, in the course of the present arbitral proceedings, the Applicant was notified of VAT Interest Assessment Statements, with reference to periods 201202 to 201212, that date from September 2018, in the amount of €246,683.42, with reference to Compensatory Interest.
Moreover, it is found that:
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The VAT Interest Assessment Statements described above relate to the same taxable person (the present Applicant), tax (VAT) and taxation periods (201202 to 201212) and have the same nature (VAT Interest) as the VAT Interest Assessments that were already the subject of the present proceedings;
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The amount assessed in those VAT Interest Assessment Statements corresponds precisely to the amount assessed as Compensatory Interest in the VAT Interest Assessment Statements contested in the present proceedings;
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The same Account Settlement Statements for VAT Interest Assessments make mention in the "Description" column of the reversal of the assessment of the same period, issued in 2016 and subject of the present process and a credit available whose value corresponds precisely to the amount assessed as default interest in the VAT Interest Assessment Statements contested, subject of the present proceedings and issued in 2016.
On this point, article 13(1) of the Legal Framework for Tax Arbitration provides that:
"In requests for arbitral determination that have as their object the assessment of the legality of the tax acts provided for in article 2, the top official of the tax administration service may, within a period of 30 days from the knowledge of the request for constitution of the arbitral tribunal, proceed to revoke, ratify, reform or convert the tax act whose illegality was raised, practicing, when necessary, a substitute tax act, and must notify the president of the Centre for Administrative Arbitration (CAAD) of his decision, after which the counting of the deadline referred to in paragraph c) of article 11(1) begins."
Article 13(3) of the same legislation further provides:
"Once the period provided for in paragraph 1 has ended, the tax administration is prevented from practicing a new tax act with respect to the same taxable person or tax obligor, tax and taxation period, unless on the grounds of new facts."
The legal regime appears sufficiently clear, in the sense that, once the period stipulated in article 13(1) of the RJAT has expired, the Tax Authority is prevented from exercising power over the (substantive tax law) relationship in dispute.
It is intended with this provision to permit a stabilization of the tax law relationship, so that, once the same is submitted to arbitral jurisdiction, it is removed from the instability that a permanent availability of its content by the Tax Authority could generate.
It is thus concluded that the act of revocation practiced after the expiration of the period fixed in article 13(3) of the RJAT will be illegal, by violation thereof, and, as such, voidable.
If the interested party had raised no objection to it, or had conformed to it, the said illegality could have been remedied.
Having not done so, and considering that:
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the Tribunal always has competence to assess questions whether incidental or preliminary that are relevant to the decision of the case (article 91 of the CPC) and, as to the latter, may suspend proceedings only if competence to decide falls to another jurisdiction (article 92 of the CPC and article 15(1) of the new CPTA);
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the Applicant raised the illegality of the act of revocation; and
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voidability may be raised either through action or through exception;
in the present proceedings it should be recognized the aforementioned illegality and draw the corresponding effects therefrom, particularly by not recognizing on the acts that suffer from it the possibility of affecting the tax acts subject of the present dispute.
b. on the merits of the case
Article 124 of the CPPT provides that:
"1 – In the judgment, the tribunal shall assess primarily the defects that lead to a declaration of non-existence or nullity of the impugned act and then the defects raised that lead to its annulment.
2 – In the said groups the assessment of the defects is done in the following order:
a) In the first group, those of defects whose substantiation determines, according to the prudent judgment of the judge, more stable or effective protection of the injured interests;
b) In the second group, the one indicated by the challenger, whenever this one establishes among them a relationship of subsidiarity and no other defects are raised by the Public Prosecutor or, in the other cases, the one fixed in the preceding paragraph."
Thus, and as the Applicant has not established any relationship of subsidiarity, we shall proceed to the assessment of the defect of violation of law, as it is the one whose substantiation determines the most stable and effective protection of the injured interests.
As the Respondent itself correctly points out, the "matter in dispute centers on the fact that the Tax Authority understands that, in the concrete case, taking into account the specificities of the properties and taking into account the type of rental contract entered into, we are in the presence of a true provision of services, pursuant to the provisions of article 4(1) of the VAT Code, to which the exemption provided for in article 9(29) of the VAT Code does not apply."
A question identical to this was already the subject of assessment in the framework of arbitral process no. 246/2017T of the CAAD, whose testimonial evidence was used in the present proceedings, as indicated above in the Report of the present decision.
In the arbitral decision delivered in that process, it was considered that:
"In light of article 4(1) of the VAT Code, 'operations carried out for valuable consideration that do not constitute transfers, intra-community acquisitions or imports of goods are considered as provisions of services.'
However, by virtue of the provisions of article 9(29) of the VAT Code, the rental of real property is exempt from VAT, except in the situations described in its paragraphs a) to e).
The Tax Authority and Customs Authority understood that the rentals of real property carried out by the Applicant to F… are not exempt from VAT, for the following reasons, in essence:
– 'rental is a contract by which one party undertakes to provide the other with the temporary enjoyment of a thing, in return for remuneration';
– 'the rental of the property, in the sense of a passive placing of the property at the disposal [of the other party], should be the preponderant provision of this economic operation';
– 'the exceptions to the exemption correspond to economic operations that encompass not only situations of rental of real property properly so-called, but also other types of characteristics derived from other contracts and which, for that reason, lose the quality of mere placing at the disposal of premises or surfaces of real property in return for remuneration linked to the passage of time';
– 'it is thus to exclude from the exemption all situations which, despite sharing some of the elements of the rental contract, are characterized essentially by integrating other provisions of services connected to the enjoyment of the property and which imply an active exploitation of real property, beyond the simple temporary enjoyment of the good';
– 'only rental of real property for residential purposes or for non-residential purposes – commercial, industrial or agricultural – is exempt from VAT when carried out "bare walls," in the case of urban properties';
– 'the concept of "bare walls" is not limited to the fact that the rental is or is not accompanied by certain equipment goods, furniture or utensils. It is intrinsically related to the productive capacity of the property, or rather, the preparation for the conduct of a business activity';
– 'this concept makes it possible, from the outset, to limit the exemption of rental of real property to situations where the cession of enjoyment of the property is not accompanied by any equipment goods installed on the property or accompanied by the provision of furniture and/or other utensils';
– 'on the date of the drawing up of the rental contracts of all the properties in question, these were already enabled for the conduct of medical clinic practice, namely for hemodialysis treatments, that is, the properties were already duly prepared for the conduct of an activity, equipped with a minimum of conditions that go beyond the concept, necessarily restricted, of "bare walls."
Thus, the Tax Authority and Customs Authority carried out the assessment impugned by understanding, in summary, that that exemption does not apply, because with the rental contracts there was not ceded only the enjoyment of the property ("bare walls"), but rather the enjoyment of the equipment for hemodialysis treatments was also provided.
The evidence produced contradicts this conclusion, since the Applicant acquired only the properties that were rented to the group companies that owned them, without any equipment intended for hemodialysis that was installed therein, which continued to belong to the respective companies that owned them, and which never became part of the Applicant's assets.
Thus, having been only the availability of the properties by the Applicant and not of any equipment installed therein nor of utensils or furniture existing therein, both on the date of the conclusion of the rental contracts and subsequently, it must be concluded that, with the contracts, the Applicant only ceded the availability of the properties, "bare walls," which was what it owned.
In these terms, it is concluded that the contracts concluded constitute 'rental of real property,' for purposes of paragraph 29) of article 9 of the VAT Code, and therefore, as none of the exceptions provided for in its paragraphs obtain, the exemption is applicable.
Consequently, the assessment impugned is illegal, by virtue of violation of this rule, which justifies its annulment, in accordance with the provisions of article 163(1) of the Administrative Procedure Code, subsidiary applicable pursuant to article 2(c) of the General Tax Law."
In the present arbitral proceedings there is not, nor has it even been suggested by the Respondent, any reason to conclude otherwise.
Indeed, as also happened in the said arbitral process no. 246/2017T of the CAAD, also here is concluded, in light of the evidence produced and the matters of fact proven therein, that the Applicant acquired only the properties that were rented to the group companies that owned them, without any equipment intended for hemodialysis that was installed therein, equipment which continued to belong to the respective companies that owned them, and which never became part of the Applicant's assets.
Thus, having been only the availability of the properties by the Applicant and not of any equipment installed therein nor of utensils or furniture existing therein, both on the date of the conclusion of the rental contracts and subsequently, it must be concluded that, with the contracts, the Applicant only ceded the availability of the properties, "bare walls," which was what it owned.
The circumstances pointed out by the Respondent that the rental contracts were entered into for "an indeterminate period" will not hinder the foregoing conclusion, since the rental regime expressly provides for the possibility of such contracts being entered into with "indeterminate duration" (see article 1094(1) of the Civil Code, applicable to non-residential purpose rentals by virtue of the provisions of article 1110(1) also of the Civil Code), so it is not correct what was affirmed by the Respondent, in the sense that "there are no indeterminate duration rental contracts."
On the other hand, with respect to the circumstance, also pointed out by the Respondent, relating to the method of fixing the rent, it is not apparent how this could ground the loss of characterization of the contracts in question as rental contracts, especially as this corresponds only to the method of determining the value of the initial rent, which, as the Respondent itself recognizes, is updated annually in accordance with the rent adjustment coefficient provided for in specific legislation.
Also unfounded, in light of the matters of fact determined, is the understanding set forth in the Inspection Report, according to which the properties transferred were already enabled for the conduct of hemodialysis treatment activities, which, as is proven, was by then duly licensed.
In fact, and as is also proven, the said licenses were held by the lessees, and not by the Applicant, and were based on the existence of the human and material means the responsibility and property of, respectively, those same lessees, being the contracts entered into between these and the Applicant entirely unrelated to the availability of any condition necessary for the maintenance or renewal of such licensing, nor is there the slightest evidence that the Applicant, notwithstanding that this was not contractually provided, actually assumed responsibility for ensuring totally or partially the conditions necessary for the effective conduct of the activity in question, or its licensing.
Moreover, the very citation made by the Respondent in article 48 of its Response clarifies that:
"It is also clear that the exemption of rental – explained thus by the impracticality of taxing the rents received by 'private' landlords – must extend to situations where the landlord is a company, on penalty of causing fiscal treatment distortions and inviting 'underground economy'."
This being the case, it must be concluded here in the same manner as was concluded in arbitral process no. 246/2017T of the CAAD, and indeed in the decision of the administrative appeal relating to the VAT assessments carried out on the same grounds of fact and law, relating to periods in the fiscal years 2013 to 2015, that is, in the sense that "the rental operations, as presented in the [...], should be considered as an operation exempt in the sense of paragraph 29), of article 9 of the VAT Code", being the assessments subject of the present arbitral action illegal, by error of fact and, consequent error of law by violation of that rule, which justifies their annulment, with the examination of the remaining questions raised by the Applicant being rendered moot.
As to the request for indemnification interest formulated by the Applicant, article 43(1) of the General Tax Law provides that indemnification interest is due when it is determined that there was error attributable to the services from which results payment of the tax debt in an amount higher than legally due.
In this case, the error affecting the annulled assessments is attributable to the Tax Authority and Customs Authority, which practiced the assessment acts subject of the present arbitral action, without the necessary factual and legal support.
The Applicant thus has the right to be reimbursed the amount it paid (pursuant to articles 100 of the General Tax Law and 24(1) of the RJAT) by virtue of the annulled acts and further to be indemnified for the undue payment through the payment of indemnification interest, by the Respondent, from the date of the undue payment until its reimbursement, at the legal suppletive rate, pursuant to articles 43(1) and (4) and 35(10) of the General Tax Law, article 559 of the Civil Code and Ordinance no. 291/2003, of 8 April.
C. DECISION
In these terms, the Tribunal hereby decides to judge fully favorably the arbitral request filed and, in consequence:
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declares the illegality of the VAT Interest Assessment Statements identified above, with reference to periods 201202 to 201212, that date from September 2018, in the amount of €246,683.42, with reference to Compensatory Interest, not recognizing the said acts the possibility of affecting the tax acts subject of the present dispute;
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annuls the acts of VAT assessment and respective interest, relating to periods 201202 to 201212, in the amount of €1,720,243.61, identified in point 1 of the Report of the present decision, as well as the implied rejection of the administrative appeal and hierarchical appeal, which had the same as their object;
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condemns the Tax Authority to payment of indemnification interest to the Applicant according to the terms fixed above.
D. Value of the Case
The value of the case is fixed at €1,720,243.61, pursuant to article 97-A(1)(a) of the Code of Tax Procedure and Process, applicable by virtue of paragraphs a) and b) of article 29(1) of the RJAT and paragraph 3 of article 3 of the Regulation of Costs in Tax Arbitration Proceedings.
Let notification be made.
Lisbon, 28 February 2019
The Presiding Arbitrator
(José Pedro Carvalho)
An Arbitrator Member
(Clotilde Celorico Palma)
An Arbitrator Member
(António Carlos dos Santos)
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