Citizens are often faced with decisions by unfair and unlawful administrative and tax authorities. The delay and high costs of legal proceedings in the Administrative and Tax Courts in Portugal are known. Often, citizens can not withstand the very serious effects of the delay of several years in obtaining the judicial decision.
What many citizens are unaware of is that they can turn to the Administrative Arbitration Center to obtain resolution of their litigation quickly and at low costs.
What is CAAD?
Arbitration is the way to resolve a conflict without going to court. One or more impartial referees listen to both parties and decide who is right. The decision of the referees has the same value as a decision of a court.
CAAD is an institutionalized arbitration center of a specialized nature created in 2009 to resolve disputes in the administrative and tax areas. Arbitration is a way to resolve a conflict without going to court.
Regarding administrative matters, the CAAD is competent to resolve disputes arising from public employment relationships and contracts concluded by pre-contracted public entities or through an arbitration agreement, if they involve entities that are not pre-linked to the CAAD.
Regarding tax matters, the Tax Regime of Tax Arbitration (RJAT), approved in 2011, provides for the possibility of resolving, by arbitration, disputes that affect the assessment of the legality of tax acts. The Tax and Customs Authority pre-linked to CAAD’s arbitration, which allows taxpayers access to fast, free and low cost arbitration. Thus, disputes between taxpayers and the Tax Authority (Finance) can be resolved through arbitration.
What are the advantages of arbitration through the caad?
The deadline for the decision is only 6 months, which guarantees a much faster decision than in administrative and tax courts.
The average time to resolve disputes at arbitration centers supported by the Ministry of Justice is only 2 to 3 months.
The arbitration proceedings in the CAAD comply with the principle of dematerialization, using a computer platform, which allows access to the file by referees and parties from anywhere in the country and without the need to travel to the CAAD premises in Lisbon. In fact, the CAAD has national territorial competence, it is able to arbitrate processes presented by citizens of the whole country.
Transparency is a fundamental element in trust in administrative and tax arbitration. All decisions made in CAAD arbitrations are published on its website, with identification of the referees.
If one of the parties not satisfied with the decision may appeal to the competent court, in accordance with the law.
Taxpayers may have recourse to arbitration when they disagree with certain decisions of the Tax Authority (Finance Offices and Finance Directorate), such as, for example, the amount that is charged to income tax (IRS or IRC), the amount that is assigned to your dwelling for the purpose of Tax (IMI), the amount that is deducted monthly from the salary (including tax ejection). The taxpayer has the possibility to appoint one of the referees.
How does CAAD arbitrage work?
Arbitration is done by arbitral tribunals that operate in the CAAD. The referees are jurists with at least ten years of administrative or fiscal experience. If necessary, it is also possible to appoint referees experts in management or economics.
These courts consist of:
A referee – if the taxpayer chooses not to appoint a referee and the amount in question does not exceed 60 thousand euros;
Three referees – if the taxpayer chooses to appoint a referee or the amount in question exceeds 60 thousand euros. In this case, one referee is appointed by the taxpayer, another by the Finance and the third (who will be the umpire-president) by the first two.
In order to guarantee the impartiality and independence of the referees, they may not have had any direct or indirect professional relationship with the taxpayer or the finances in the previous two years.
With the arbitration through the CAAD, the Ministry of Justice intends to ensure the rights of taxpayers and citizens in general, to resolve disputes between taxpayers and the Tax Authority or Administrative Entity in a quicker and simpler way, with a reduction in the number of cases settle in court.