Process: 112/2015-T

Date: September 4, 2015

Tax Type: Selo

Source: Original CAAD Decision

Summary

Process 112/2015-T addressed the material competence of Portugal's tax arbitral tribunal (CAAD) to rule on official review requests concerning stamp tax assessments on building land. The applicant owned two urban properties in Porto classified as building land with tax values exceeding €1,000,000, which were assessed stamp tax in 2012 under the transitional provisions of item 28.1 of the General Stamp Tax Table (GTST) introduced by Law 55-A/2012. Despite paying all assessments, the applicant contested their legality, arguing that item 28.1 applies only to 'properties with housing use' and not to building land as defined in Article 6(3) of the Municipal Property Tax Code. On August 29, 2014, the applicant filed an official review request under Article 78 of the General Tax Law (LGT), which the Tax Authority rejected as untimely. The applicant then initiated arbitration proceedings at CAAD. The Tax Authority raised a procedural defense challenging the tribunal's material competence. The central legal issue was whether CAAD has jurisdiction to review decisions rejecting official review requests under Article 78 LGT, or whether such challenges fall outside the tribunal's statutory competence defined in the Legal Regime for Arbitration in Taxation Matters (LRAT). The case highlights the jurisdictional boundaries between administrative review procedures and arbitral proceedings in Portuguese tax law, particularly regarding stamp tax assessments on high-value real estate. The tribunal's analysis focused on interpreting the scope of its material competence under Articles 2 and 10 of the LRAT in relation to official review procedures.

Full Decision

ARBITRAL DECISION

I – Report

On 19 February 2015, A… Lda, with collective person number …, with headquarters at Av. …, no. …, in Lisbon, (hereinafter the Applicant) requested arbitral determination, pursuant to and for the purposes of what is established in Articles 2, no. 1, a) and 10, no. 1 a) of the Legal Regime for Arbitration in Taxation Matters, approved by Decree-Law no. 10/2011, of 20 January (hereinafter the LRAT) and in Articles 1 and 2 of Ordinance no. 112-A/2011, of 22 March, concerning the rejection dispatch of the official review request submitted, pursuant to Article 78 of the General Tax Law (GTL), on 29 August 2014, and consequently the request for declaration of illegality of the following tax acts:

a) Stamp tax assessments, relating to the year 2012, of the urban property located in the parish of …, municipality of Porto, registered in the urban property matrix under no. …, in the amounts of €14,429.75 and €29,941.73, assessed respectively on 07 November 2012 and 22 March 2013.

b) Stamp tax assessments, relating to the year 2012, of the urban property located in the parish of …, municipality of Porto, registered in the urban property matrix under no. …, in the amounts of €12,505.30 and €25,948.50, assessed respectively on 07 November 2012 and 22 March 2013;

  1. In the request for arbitral determination, the Applicant opted not to designate an arbitrator;

The request for constitution of the arbitral tribunal was accepted by the President of CAAD on 23 February 2015 and automatically notified to the Tax and Customs Authority (hereinafter the Respondent or TA) on the same date;

Pursuant to subsection a) of no. 2 of Article 6 and subsection b) of no. 1 of Article 11 of the LRAT, the Deontological Council designated as arbitrators: as president, Court of Appeal Judge Manuel Luís Macaísta Malheiros; as members Dr. Jaime Carvalho Esteves and Prof. Doctor Francisco José Nicolau Domingos;

  1. Dr. Jaime Carvalho Esteves justifiably resigned from the functions of arbitrator, having been replaced, pursuant to the provisions of Article 9 of the Deontological Code of CAAD, by Dr. Rui Ferreira Rodrigues, on 30 April 2015;

The Arbitral Tribunal was constituted on 22 May 2015, in conformity with the provisions of subsection c) of no. 1 of Article 11 of Decree-Law no. 10/2011, of 20 January, with the wording introduced by Article 228 of Law no. 66-B/2012, of 31 December;

The Respondent submitted its response on 29 June 2015, having attached the administrative case (PA) on 18-08-2015;

The meeting referred to in Article 18 of the LRAT was scheduled for 14 July 2015;

Prior to the holding of said meeting, on 9 July 2015, the Applicant submitted its considerations regarding the Respondent's response (which had defended itself by exception);

On 14 July 2015, the meeting referred to in Article 18 of the LRAT took place, at which the arbitrators and the representative of the Applicant were present, but at which the legal representative of the Respondent, who had been designated by dispatch of 5 March 2015, was absent. The Tribunal proceeded with the investigation pursuant to Article 19 of the LRAT;

At the meeting identified in the preceding number, the representative of the Applicant requested the attachment to the record of two documents which, having been mentioned in Article 38 of the response to exceptions, were inadvertently not attached thereto. The Tribunal permitted the attachment of the documents to the record and granted the Respondent 10 days to pronounce itself. The representative of the Applicant waived presentation of arguments. The tribunal also decided to rule on the exceptions finally and designated 1 October 1015 for delivery of the arbitral decision.

II – Position of the Parties

  1. The Applicant argues, in summary, the following:

12.1. It is the owner of two urban properties, both located in the parish of …, in the municipality and district of Porto, registered in the respective property matrix, one under article no. … and the other under article …;

12.2. Both are considered as building land, have tax equity values exceeding €1,000,000.00 and were assigned the location coefficient corresponding to housing;

12.3. The stamp tax assessments on the land relating to 2012 were carried out pursuant to the transitional provisions applicable in the year 2012 to the taxation provided for in item 28.1 of the General Table of Stamp Tax (GTST), introduced by Law no. 55-A/2012, of 29 October, in accordance with Article 6 of the same Law;

12.4. Despite having proceeded with payment of all assessments relating to 2012 that the Respondent required of it, the Applicant never agreed with the application of the taxation provided for in item 28.1 of the GTST, as it understood that such taxation does not apply to urban properties of the type building land;

12.5. For this reason, the Applicant submitted, on 29 August 2014, a request for official review of the assessments, requesting their annulment and the consequent reimbursement of the amount paid;

12.6. Said request was rejected because the Respondent considered it untimely;

12.7. The Applicant considers, however, that pursuant to the provisions of Article 78 of the GTL, the review of tax acts made by the entity that performed them may be carried out on the initiative of the TA, within four years following the assessment, on the basis of error attributable to the services;

12.8. The Applicant further adds that the case law of the Supreme Administrative Court has been unanimous in considering that the review of the tax act may also be promoted by the taxpayer, with the TA having the duty to proceed thereto, should the respective legal conditions be verified;

12.9. It cites the doctrine of various authors in that same sense, concluding that the request for official review concerns the illegality of the stamp tax assessments issued by the TA under Article 78 of the GTL;

12.10. The Applicant argues that the Respondent applied to its land the rates (enshrined in the transitional provision introduced by Law no. 55-A/12, of 29 October and contained in item 28.1 of the GTST) applicable to "properties with housing use assessed under the Municipal Property Tax Code", which is not the case for its land, which are urban properties for construction, and are consequently excluded from the application of item 28 of the GTST;

12.11. The Applicant bases its position on the express definitions in Article 6 of the Municipal Property Tax Code (MPTC) relating to residential urban properties and building land, in nos. 2 and 3, respectively, as well as on the non-existence, in that same Code and for tax purposes, of the type of building land with housing use;

12.12. It concludes that since item 28.1 of the GTST clearly establishes the incidence of stamp tax on properties with housing use, building land are obviously not covered;

12.13. It further argues that for housing use to exist, it is not sufficient to have a building permit, since with the permit alone there is no building and there may never be one;

12.14. It recalls that the legislator, with the transitional norm relating to item 28.1 of the GTST, aimed to tax manifestations of fortune, with emphasis on the so-called "luxury houses" and never the construction sector, which is the largest holder of building land;

12.15. It then alleges that in the sense of considering illegal the interpretation that the Respondent makes of the application of item 28.1 of the GTST has been the case law of the Tax Arbitral Tribunal functioning within the scope of CAAD, indicating and citing several of its decisions;

12.16. It then invokes the case law of the Supreme Administrative Court, with indication of several of its judgments that concluded in the sense of the illegality of the application of item 28.1 of the GTST to properties for construction;

12.17. Finally, it invokes the amendment introduced by Law no. 83-C/2013, of 31 December, to item 28.1 of the GTST, (which came to unequivocally include within the scope of application of that item building land whose construction, authorised or provided for, is for housing) with the conclusion that the legislator proceeded in 2014 to the expansion of the scope of application of item 28.1 of the GTST to building land, which before were outside its reach;

12.18. It concludes by requesting that the Tribunal judge the request for arbitral determination as well-founded and, consequently, declare:

  • the illegality and consequent annulment of the stamp tax assessments carried out by the Respondent on 07 November 2012 and 22 March 2013 (tax facts verified on 31 October and 31 December 2012) pursuant to item 28.1 of the GTST, in relation to the urban properties of the type "building land", registered in the matrix under urban articles nos. … and …, which amount to a total value of €82,825.28;

  • its right to be reimbursed the sum of €82,825.28, concerning payment unduly made of said assessments.

  1. The Respondent, in its response, argued the following:

Regarding the material incompetence of the Tribunal

13.1. The request for official review submitted by the Applicant was rejected for untimeliness, for which reason it can only be appreciated within the scope of a special administrative action, in accordance with the provisions of Article 191 of the Code of Procedure in Administrative Courts;

13.2. It argues that the arbitral tribunal is materially incompetent to appreciate the action, by virtue of Article 2 of the LRAT expressly enumerating, in subsections a) and b) of its no. 1, the competencies that were conferred by the legislator on the arbitral forum, and the appreciation of administrative acts in taxation matters not involving the appreciation of the legality of a tax assessment act does not appear there;

13.3. Only when the second-level act incorporates the illegality of the first-level act, by confirmation of the assessment act, will the arbitral tribunal be materially competent to know thereof;

13.4. It concludes by affirming that this same understanding has already been endorsed in several decisions emanating from the arbitral tribunals constituted to appreciate the disputes instituted in CAAD, namely those registered under numbers 73/2012-T and 843/2014-T;

Regarding the untimeliness of the Applicant's request

13.5. It states that, in the Applicant's request, there is any omission of reference to the request for annulment of the dispatch rejecting the request for official review, from which it results that the acts challenged are only the stamp tax assessments whose voluntary payment deadline occurred on 20.12.2012 and on 30.11.2013;

13.6. The deadline for presentation of a request for arbitral determination being defined pursuant to Article 10 of the LRAT, its formulation on 19.02.2015 shows its manifest untimeliness;

13.7. Thus, the Respondent concludes that either by way of the mentioned material incompetence of the arbitral tribunal to resolve the matter submitted to it, or by way of the manifest untimeliness of the presentation of the request for arbitral determination, whose mediate object will be the annulment of assessments whose voluntary payment deadline ended in 2012 and 2013, results the manifest lack of merit of the Applicant's claim;

  1. In relation to the exceptions, the Applicant alleged the following:

14.1. That at no time does it formulate a request for autonomous appreciation of the dispatch rejecting the request for official review of the stamp tax assessments;

14.2. It argues that Article 2 of Ordinance no. 112-A/2011, of 22 March, by means of which the TA bound itself to the jurisdiction of the arbitral tribunals functioning in CAAD, excludes from the scope of competence of the arbitral tribunals certain claims, among which those relating to the declaration of illegality of self-assessment acts, withholding at source and payment on account acts that have not been preceded by recourse to the administrative procedure pursuant to Articles 131 to 133 of the Code of Tax Procedure and Process, but that its claim does not fall within any of those provisions, for which reason the arbitral tribunal is competent;

14.3. It refutes the CAAD case law invoked by the Respondent by noting that one of the decisions (843/2014-T) is not available for consultation and that the other (73/2012-T) is a case that presents specificities in relation to that which the Applicant initiated. It affirms that the Respondent incurs in a reasoning error when it seeks to extrapolate to the present case – a materially different case – the understanding endorsed in said decision, without attending to the particularities of the factuality of one and the other case;

14.4. In this respect, the essential is to consider that the dispatch rejecting the request for official review involved the appreciation of the legality of the assessment acts;

14.5. It argues, in support of its thesis, that the TA in the aforementioned dispatch rejecting the official review cites uncritically the letter of Article 78 no. 1 of the GTL and then states that by virtue of the fact that more than 120 days have elapsed since the end of the deadline for voluntary payment of the assessments, the request for official review is untimely;

14.6. It continues in the sense that that same article number of 78 of the GTL has a second part, pursuant to which the deadline for carrying out the official review of the assessment act is 4 years whenever the error is attributable to the services;

14.7. It affirms that the case law of the Supreme Administrative Court has been unanimous in considering that the review of the tax act may be promoted by the taxpayer, with the TA having the duty to proceed thereto, should the respective legal conditions be verified;

14.8. It considers that the Respondent in the dispatch rejecting the official review should have explicitly pronounced itself on the reason why it considered there to have been no error of the services and that, from the fact that it did not do so, unequivocally results a tacit judgment on the legality of the assessment acts;

14.9. It alleges that the dispatch of the Respondent is apparently of mere form, but in reality implicitly involves a judgment on the legality of the acts, considering that they do not result from error attributable to the services;

14.10. It further adds that a different understanding contains the danger that the TA could preclude access to tax jurisdiction or arbitral jurisdiction in similar cases, it being sufficient for it to issue dispatches of mere apparent form, invoking the 120-day deadline and that simply omit the judgment that was at the basis of the choice of that deadline versus the 4-year deadline in the case of error attributable to the services;

14.11. It understands that the untimeliness of the request for arbitral determination invoked by the dear respondent is without legal foundation since the norms on the competence of the arbitral tribunals do not confuse with the norms on deadlines for presentation of the request for constitution of the arbitral tribunal;

14.12. Indeed, from the combined analysis of the relevant articles in this matter (Article 10 of the LRAT and Article 102, no. 1 b) of the CTPP), the notification of (…) tax acts, even if they do not give rise to any assessment, as is the case with the rejection of the official review, constitutes, by itself, determinative fact for the beginning of the counting of the 90-day period provided for in Article 10 no. 1, a) of the LRAT;

14.13. For this reason, the deadline for presenting a request for arbitral determination is not counted from the end of the deadline for voluntary payment of the assessments, but from the date of rejection of the request for official review, a fact provided for in b) of no. 1 of Article 102 of the CTPP by reference to Article 10, no. 1, a) of the LRAT. Having the Applicant been notified of the dispatch rejecting the request for official review on 15 December 2014 and, with the counting of the 90-day challenge period beginning from that moment, it is manifest that the present request for arbitral determination was timely presented, on 19 February 2015;

14.14. The Applicant further accuses the Respondent of having, throughout the proceedings, conduct of little coherence, by virtue of in the response having presented contradictory grounds seeking to induce the arbitral tribunal into error regarding the act that is the object of the arbitral proceedings. For if on one hand the Respondent alleges that "the request thus omits any reference to the request for annulment of the dispatch rejecting the Request for Official Review", on the other, it constructs the argumentation relating to "impropriety of the remedy" on the assumption that the request formulated by the Applicant concerns the prima facie rejection;

14.15. Finally, it states that two other requests for official review in all respects identical to the request in question in the present case were appreciated by other Finance Services (from Lisbon) and were considered timely.

III – Determination of Issues

  1. The parties have legal capacity and standing, have legitimacy pursuant to Articles 4 and 10, no. 2, of the LRAT and Article 1 of Ordinance no. 112-A/2011, of 22 March, and are legally represented;

  2. The Respondent raised two exceptions, for which reason the Tribunal, before pronouncing itself on the matter that is the object of the Applicant's request above transcribed, must rule on the exceptions raised relating to the material incompetence of the tribunal and the untimeliness of the request.

  3. Regarding the absolute incompetence of the Arbitral Tribunal to appreciate the request:

17.1. Taking into account that the scope of material competence of the tribunal is of public order and its knowledge precedes that of any other matter [Article 13 of the Code of Procedure of Administrative Courts (CPAC) applicable ex vi of Article 29, no. 1, subsection c) of the LRAT], and that the breach of the rules of competence in reason of subject matter determines the absolute incompetence of the tribunal, which is of official knowledge [Articles 16, nos. 1 and 2 of the Code of Tax Procedure and Process (CTPP) applicable ex vi of Article 29, no. 1, subsections a) and c) of the LRAT], it is necessary to begin by appreciating the dilatory exception raised by the Respondent concerning the incompetence of the Arbitral Tribunal.

17.2. For such purpose, it is appropriate to determine the material competence of the tax arbitral tribunals, as well as the content of the challenged act.

17.3. The former is defined in no. 1 of Article 2 of the LRAT in the following terms:

"The competence of the arbitral tribunals comprises the appreciation of the following claims:

a) The declaration of illegality of tax assessment acts, self-assessment acts, withholding at source acts and payment on account acts;

b) The declaration of illegality of taxable matter determination acts when they do not give rise to the assessment of any tax, taxable matter determination acts and tax equity value determination acts".

17.4. In light of this provision, it should be understood, as with Lopes de Sousa, that the competence of the arbitral tribunals "is restricted to activity connected with tax assessment acts, remaining outside its competence the appreciation of the legality of administrative acts of total or partial rejection or revocation of exemptions or other tax benefits, when dependent on recognition by the Tax Administration, as well as other administrative acts relating to tax matters that do not involve appreciation of the assessment act, to which subsection p) of no. 1 of Article 97 of the CTPP refers" (Jorge Lopes de Sousa, Commentary on the Legal Regime for Tax Arbitration in Guide to Tax Arbitration, Almedina, 2013, p. 105).

The appreciation of the competence of the arbitral tribunal involves a judgment on the adequacy to the case sub judice of the remedial process of special administrative action or of the judicial challenge process, having regard to the provisions of Article 97 of the CTPP, which defines the respective fields of application, distinguishing "challenge of administrative acts in taxation matters that involve the appreciation of the legality of the assessment act" (subsection d) of no. 1) and "contentious recourse from total or partial rejection or revocation of exemptions or other tax benefits, when dependent on recognition by the tax administration, as well as other administrative acts relating to tax matters that do not involve appreciation of the legality of the assessment act" (subsection p) of no. 1), whereby, pursuant to no. 2 of Article 97, the "contentious recourse of administrative acts in taxation matters, which do not involve appreciation of the legality of the assessment act, from the tax administration, comprising the central government, regional governments and their members, even when performed by delegation, is regulated by the norms on procedure in administrative courts".

To concretise such distinction between the scope of application of these procedural remedies, which, by force of subsection a) of no. 1 of Article 2 of the LRAT, has relevance in the definition of the competence of the tax arbitral tribunals, constitutes consolidated case law orientation that "the use of the judicial challenge process or contentious recourse (currently special administrative action, by force of the provisions of Article 191 of the CPAC) depends on the content of the challenged act: if this involves appreciation of the legality of an assessment act the judicial challenge process shall be applicable and if it does not involve such appreciation the contentious recourse/special administrative action is applicable" (see the Supreme Administrative Court decision of 25.6.2009, case no. 0194/09).

17.5. In this manner, keeping in mind these basic principles, to determine the competence of the arbitral tribunal it is necessary to investigate the content of the challenged act, in order to verify whether it involves appreciation of an assessment act.

For this purpose, as results from the term "appreciation" used in subsection d) of no. 1 of Article 97 of the CTPP, it is sufficient that, in the act in question, there has been evaluated or examined the "legality of the assessment act", even if that appreciation is not the basis of the administrative decision (see, in this sense, the arbitral decision of 06/12/2013, rendered in case no. 117/2013-T).

Such is the consolidated understanding of the case law of the Arbitral Tribunals functioning within the scope of CAAD (see decisions nos. 148/2014-T, 236/2013-T and 244/2013-T, among others).

Also the case law of the Supreme Administrative Court has been pronouncing itself in the same sense, see decisions of 14-05-2015 (01958/13), 18-06-2014 (01752/13) and 28-05-2014 (Case 01263/13), among many others.

17.6. As for the content of the challenged act and as clearly results from the request for arbitral determination, namely from its Articles 27, 28, 41, 42 and respective prayer for relief, and further from Article 34 of the response to exceptions, presented by the Applicant on 09 July 2015, the act challenged in these proceedings is that of rejection of the request for review of the stamp tax assessments mentioned above, submitted to the TA on 29 August 2014, pursuant to Article 78 of the GTL.

Thus:

Article 27: "The Applicant does not agree with the rejection of the request for official review based on untimeliness (…)", ------

Article 28: "The TA alleges to justify the final decision of rejection that the request for official review of the assessments is untimely, in that, the deadline for presentation of the request for official review is 120 days counted from the end of the deadline for voluntary payment of the tax obligation, which has already elapsed", -----

Article 41: "Therefore the Applicant cannot conform to the rejection of the request for official review, since it is timely, pursuant to Article 78 no. 1 of the GTL, the TA's decision suffering from legal defect", ------

Article 42: "Notwithstanding the TA having rejected the request for official review on the basis of untimeliness, which has no legal basis, as demonstrated above (…)", -------

Prayer for relief: "For which reasons the present request for arbitral determination must be judged well-founded, as proven, and in consequence: (i) The illegality and consequent annulment of the stamp tax assessments, carried out in 2012 and 2013 (…), ----

Article 34 of the response to exceptions: "Indeed, having the Applicant requested official review of the tax act of assessment, the deadline for presenting a request for arbitral determination regarding that act ceases to be counted from the date limit for voluntary payment of the tax, as what becomes relevant is the date of rejection of the request for official review, a fact provided for in subsection b) of no. 1 of Article 102 of the CTPP by reference to Article 10 no. 1, subsection a) of the LRAT".

17.7. The request for review mentioned above was rejected, by dispatch of the Chief of the Finance Services of Porto 4, of 12 December 2014, rendered in the following terms: "I agree, whereby I reject prima facie the request in the terms and with the grounds contained in the draft decision timely notified. Notify, informing the applicant that from this dispatch may, if it so wishes, appeal hierarchically, within the period of 30 days from notification, pursuant to no. 1 of Article 66 of the Code of Tax Procedure and Process (CTPP)".

In turn, the draft decision, notified to the Applicant through letter no. …/…-10, of said Finance Services, of 11 November 2014, was rendered in the following terms: "Pursuant to the information and proposal below, with which I agree, I draft the prima facie rejection of the request as untimely. Notify the claimant to, if it so wishes, exercise the right to prior hearing, in writing, within the period of 15 (fifteen) days, pursuant to Article 60 of the General Tax Law".

17.8. From the foregoing results the obvious conclusion that the Tax Authority did not appreciate the legality of the assessment.

The act that is in question, which constitutes the immediate object of the present proceedings, is, consequently and unquestionably, the decision of rejection, on grounds of untimeliness, of the request for official review and not the stamp tax assessments (item 28.1 of the GTST) carried out by the TA on 07 November 2012 and 22 March 2013.

17.9. We are, therefore, before an administrative act in taxation matters which, by not appreciating or discussing the legality of the assessment act, cannot be challenged through judicial challenge, pursuant to the provisions of subsection a) of no. 1 of Article 97 of the CTPP and of Article 2 of the LRAT (see Supreme Administrative Court decision of 28-04-2010 - Case 0120/09), which is to say, it does not fall within the scope of the material competence of the Arbitral Tribunals.

17.10. Thus, this Arbitral Tribunal is materially incompetent to appreciate and decide on the request that is the object of the dispute sub judice, pursuant to Articles 2, no. 1, subsection a) and 4, no. 1, both of the LRAT and Articles 1 and 2, subsection a), of Ordinance no. 112-A/2011, of 22-03-2011, which constitutes a dilatory exception preventative of the knowledge of the merits of the case, pursuant to the provisions of Article 576, nos. 1 and 2 of the CPC, ex vi of Article 2, subsection e) of the CTPP and Article 29, no. 1, subsections a) and e) of the LRAT, which obstructs the knowledge of the request and the absolution of the TA from the instance, pursuant to Articles 576, no. 2 and 577, subsection a) of the CPC, ex vi of Article 29, no. 1, subsections a) and e) of the LRAT.

  1. The knowledge of the other exception invoked by the Respondent (untimeliness of the Applicant's request) as well as of the merits is thereby prejudiced.

IV - DECISION

Considering the grounds set forth, this Tribunal decides:

a) Judge as well-founded the dilatory exception of incompetence in reason of subject matter raised by the Tax and Customs Authority;

b) Absolve the Respondent from the instance (Articles 96 and 278 of the Civil Procedure Code);

c) Judge, in consequence, the knowledge of the remaining exceptions and of the merits as prejudiced; and

d) Condemn the Applicant to payment of costs (Article 22-4 of the LRAT), fixing these at the amount of €2,754.00, pursuant to Table I attached to the Regulation of Costs in Tax Arbitration Proceedings.

Case value: In accordance with the provisions of Article 306, no. 2, of the CPC and 97-A, no. 1, subsection d), of the CTPP and 3, no. 2, of the Regulation of Costs in Tax Arbitration Proceedings, the case value is fixed at €82,825.28.

Lisbon, 04 September 2015.

The Arbitrators,

(Manuel Luís Macaísta Malheiros)

(Francisco José Nicolau Domingos)

(Rui Ferreira Rodrigues)

Frequently Asked Questions

Automatically Created

Can the CAAD arbitral tribunal rule on requests for official review (revisão oficiosa) of stamp tax assessments?
The material competence of CAAD arbitral tribunals is limited by Articles 2 and 10 of the Legal Regime for Arbitration in Taxation Matters (LRAT). Generally, CAAD lacks material competence to rule on requests for official review (revisão oficiosa) under Article 78 of the General Tax Law. Official review is an administrative procedure initiated by the taxpayer requesting the Tax Authority to correct its own errors within four years of assessment. The rejection of such requests falls outside the scope of arbitrable matters defined in the LRAT. CAAD's competence extends to challenging the legality of tax acts themselves, not to reviewing administrative decisions on official review procedures. Taxpayers who receive rejections of official review requests must pursue hierarchical appeals or judicial review through administrative courts rather than tax arbitration.
What are the grounds for material incompetence of the Portuguese tax arbitral tribunal?
Grounds for material incompetence of the Portuguese tax arbitral tribunal include: (1) disputes not involving arbitrable tax matters as defined in Articles 2 and 10 of the LRAT; (2) challenges to administrative decisions on procedural matters like official review rejections rather than substantive tax assessments; (3) matters reserved for administrative courts or other specialized jurisdictions; (4) disputes where the applicant lacks standing or the act challenged is not a definitive tax act; and (5) cases involving taxes or acts excluded from the LRAT's scope. Material incompetence is a matter of public policy that tribunals must examine ex officio and results in dismissal of the arbitration request without prejudice to the taxpayer seeking relief through proper channels.
How does Article 78 of the General Tax Law (LGT) apply to stamp tax liquidation disputes?
Article 78 of the General Tax Law establishes official review (revisão oficiosa) as an administrative procedure where the Tax Authority may correct tax acts containing errors attributable to its services within four years of assessment. While Article 78 contemplates initiative by the Tax Authority, jurisprudence recognizes taxpayers may request such review. However, regarding stamp tax liquidations, challenges to rejections of Article 78 review requests do not constitute direct challenges to the tax assessments themselves. For stamp tax disputes, taxpayers must either: (1) file timely administrative complaints under Article 70 of the Tax Procedure and Process Code within the statutory deadline, or (2) challenge the substantive legality of the stamp tax assessment directly through arbitration or judicial review. Article 78 review requests rejected as untimely or on procedural grounds must be appealed through hierarchical administrative appeals, not through CAAD arbitration which addresses the merits of tax assessments.
What happens when a taxpayer challenges stamp tax assessments on high-value properties through arbitration?
When a taxpayer challenges stamp tax assessments on high-value properties through arbitration at CAAD, the tribunal examines both its competence and the substantive merits. For properties assessed under item 28.1 of the General Stamp Tax Table (applicable to properties with tax values exceeding €1,000,000), common challenges involve whether the property qualifies as having 'housing use' versus being building land. If the taxpayer previously filed an official review request under Article 78 LGT that was rejected, and then seeks arbitration challenging that rejection rather than the underlying assessment, the tribunal will likely declare itself materially incompetent. However, if the arbitration request directly challenges the stamp tax assessment's legality (arguing, for example, that building land is excluded from item 28.1), CAAD has competence to rule on the merits, examining whether the property classification and tax application comply with the Municipal Property Tax Code definitions and GTST provisions.
What are the procedural requirements for contesting Imposto do Selo (stamp tax) liquidations before CAAD?
Procedural requirements for contesting Imposto do Selo liquidations before CAAD include: (1) filing the arbitration request within the statutory deadline—generally within 90 days of the final administrative decision or within the timeframe for judicial appeals; (2) properly identifying the contested tax acts (assessments) with dates, amounts, and property identification; (3) paying required arbitration fees unless exemption applies; (4) demonstrating that the challenge concerns an arbitrable matter under Articles 2 and 10 of the LRAT; (5) ensuring the dispute involves definitive tax acts rather than preliminary or procedural decisions; and (6) complying with form requirements of the LRAT and Ordinance 112-A/2011. Critically, taxpayers must challenge the stamp tax assessments themselves, not administrative decisions rejecting review requests. If prior administrative remedies were pursued (like Article 78 official review), these do not extend deadlines for arbitration unless specific suspension provisions apply. Failure to meet competence or procedural requirements results in rejection or dismissal of the arbitration request.