Process: 120/2016-T

Date: June 21, 2016

Tax Type: Selo

Source: Original CAAD Decision

Summary

Process 120/2016-T addressed whether individual installments of Stamp Tax assessments under Item 28.1 of the Portuguese General Stamp Tax Table (TGIS) can be independently challenged before the CAAD arbitration tribunal. The claimant, A... Lda., contested €7,615.82 in third installments of 2014 Stamp Tax assessments across ten collection notes, arguing erroneous interpretation of Item 28.1 TGIS and unconstitutionality under Articles 103 and 104 of the Portuguese Constitution, which enshrine principles of equity, legality, contributive capacity, justice, equality, and fiscal proportionality. The Tax Authority raised a procedural defense of non-appealability, arguing that only the complete assessment act could be challenged, not individual installments, citing Article 89(4)(i) CPTA and Article 29(1)(c) RJAT. The tribunal rejected this defense, establishing a critical distinction between the legal nature of the Stamp Tax assessment act and its payment mechanism. The arbitrator ruled that there exists only one Stamp Tax assessment per year, though payment may be divided into installments. The assessment act itself—not the installments—constitutes the challengeable tax act. Taxpayers may contest the legality of the assessment with the reaction period calculated from any installment date. This interpretation affirms taxpayer access to justice while recognizing that challenging the same assessment through multiple installments creates litispendência (lis pendens), a procedural bar requiring dismissal without prejudice. The decision clarified that Item 28.1 TGIS applies to properties with residential units susceptible to independent use, with tax calculated on aggregate assessed values. By accepting jurisdiction over installment-based challenges while addressing litispendência as a separate procedural issue, the tribunal balanced administrative efficiency with constitutional rights to effective judicial review in tax matters.

Full Decision

ARBITRAL DECISION

Carla Castelo Trindade, Arbitrator appointed by the Deontological Council of the Administrative Arbitration Centre to constitute this arbitral tribunal, renders the following:

ARBITRAL DECISION

I – REPORT

On 29 February 2016, "A…, Lda.", holder of tax identification number …, with registered office at …, no. …, …, …-… … (hereinafter Claimant), filed a request for constitution of a single arbitral tribunal, under the terms and for the purposes of the provisions of Articles 2 and 10 of the Legal Regime of Arbitration in Tax Matters, approved by Decree-Law 10/2011, of 20 January (RJAT).

By means of the request for constitution of the arbitral tribunal and for arbitral pronouncement, the Claimant seeks the annulment of the acts of assessment of Stamp Tax, carried out under item 28.1 of the TGIS, relating to the year 2014, to which correspond the third installments in the total amount of € 7,615.82 (seven thousand, six hundred and fifteen euros and eighty-two cents), corresponding to collection notes nos. 2015 …; 2015 …; 2015 …; 2015 …; 2015 …; 2015 …; 2015 …; 2015 …; 2015 …; 2015 ….

Indeed, not accepting the above-identified Stamp Tax assessments, the Claimant requested the constitution of this arbitral tribunal, petitioning for the declaration of illegality and consequent annulment of the acts of assessment of Stamp Tax, on the grounds of, as it appears:

i. Defect of violation of law due to erroneous interpretation and application of Item 28.1 of the General Table of Stamp Tax (TGIS);

ii. Unconstitutionality of the provisions of item no. 28 of the TGIS, due to violation of the principles of equity, legality, contributive capacity, justice, equality and fiscal proportionality, under the terms of Articles 103 and 104 of the CRP, in the interpretation given thereto by the Tax and Customs Authority.

With the petition were attached 11 documents.

Since the Claimant opted for non-designation of an arbitrator, under the terms of subparagraph a) of paragraph 2 of Article 6 and subparagraph b) of paragraph 1 of Article 11 of the RJAT, as amended by Article 228 of Law no. 66-B/2012, of 31 December, the Deontological Council appointed as arbitrator of the single arbitral tribunal Dr. Carla Castelo Trindade, who communicated acceptance of the assignment within the applicable period.

The parties were notified of this appointment, and no request for recusal of the appointment as arbitrator by Dr. Carla Castelo Trindade was submitted.

Thus, in accordance with the provision of subparagraph c) of paragraph 1 of Article 11 of the RJAT, as amended by Article 228 of Law no. 66-B/2012, of 31 December, the single arbitral tribunal was constituted on 16 May 2016.

On 9 June 2016, the Tax and Customs Authority (hereinafter "Respondent") filed a response in which, on the one hand, it presented a defence by way of exception, alleging the non-appealability of the installments of the tax act of assessment of Stamp Tax, under the terms of Article 89, paragraph 1, subparagraph c) of the Code of Administrative Court Procedure (CPTA) (which corresponds to the current Article 89, paragraph 4, subparagraph i) of the CPTA, as amended by Decree-Law no. 214-G/2015, of 2 October) under Article 29, paragraph 1, subparagraph c) of the RJAT, and, on the other, by way of objection, defending the complete lack of merit of the request for arbitral pronouncement and arguing for the maintenance of the collection notes of the third installments of Stamp Tax, as they embody the correct interpretation of Item 28 of the General Table as amended by Law no. 55-A/2012, of 29 December.

Strictly speaking, this Tribunal considers that where the Respondent's response states "first and second installments" it is a manifest typographical error, since what was meant was "third installments".

Given that, in this case, none of the purposes legally entrusted to the meeting referred to in Article 18 of the RJAT were present, and having regard to the position taken by the parties in their pleadings, under the terms of Articles 16, subparagraph c) and 19 of the RJAT, as well as the principles of procedural economy and prohibition of useless acts, the holding of this meeting was dispensed with, with the parties being notified to submit arguments.

No arguments were submitted.

II. SANITATION

The arbitral tribunal was regularly constituted.

The parties possess legal standing and capacity and are entitled to sue.

The Respondent invoked, in its response, the dilatory exception of non-appealability of the installments of the tax act of assessment of Stamp Tax, in light of the provisions of Article 23, paragraph 7 of the Stamp Tax Code and Articles 113, paragraph 1 and 120 of the IMI Code, under the terms of Article 89, paragraph 4, subparagraph i) of the CPTA, under Article 29, paragraph 1, subparagraph c) of the RJAT.

Any finding of merit of the exception invoked would prevent knowledge of the merits of the case, and therefore it is necessary to decide on it at the outset.

II.A. Exception of Non-Appealability of Installments of Tax Acts of Assessment of Stamp Tax

As stated, the Respondent invoked, in its response, the dilatory exception of non-appealability of the installments of the tax act of assessment of Stamp Tax. All because, in the Tax Administration's view, the object of judicial challenge or of the tax arbitral proceeding is the tax act of assessment, and the third installment (as well as the first and second), is not, in itself, a tax act, but merely a division of the overall assessment, carried out annually. For this purpose, the Respondent assumed that "[t]he object of the present request for arbitral pronouncement is the annulment of the collection documents for payment of the 3rd installments, with payment deadline November 2015, of the assessments of item 28 of the General Table of Stamp Tax, of the year 2014, dated 20/03/2015, on the sum of the tax assessed value of the units with residential use that comprise the above-identified urban property".

However, it is not correct. This is notwithstanding the decisions that have been rendered by some arbitral tribunals, notably the decision rendered in process no. 557/2015-T.

Here is why:

This tribunal's analytical approach is based on a distinction between the legal qualification of the Stamp Tax assessment act as a tax act, although materialized for purposes of payment at two or three different moments in time, and payment itself. The first issue will lead to the consideration that the appealability of installments of Stamp Tax assessment acts is admissible, and consequently the competence of this tribunal; the second will give rise to questions of litispendence, res judicata or exceptions of untimeliness. Strictly speaking, in the case at hand it will give rise to the declaration of litispendence and consequent absolution of the instance.

Let us see why:

There is, as will be seen, only one Stamp Tax assessment. The tax resulting from these assessments may be paid in three installments. If the taxpayer wishes to contest the legality of the tax, the act being reviewed is the assessment act that gave rise to it, and the period for reaction is calculated from the date of the first, second or third installment, as we shall see.

As is known, assessment is the operation through which the tax rate is applied to the taxable base, thus determining the amount owed by the taxpayer. In this connection, the assessment act is the administrative act through which that tax calculation operation is executed by the Tax Administration.

CASALTA NABAIS distinguishes between assessment in the strict sense and assessment in the broad sense, including in the latter, beyond the assessment operation stricto sensu – application of the rate to the taxable base and consequent determination of the tax – other operations intended to determine the amount of tax, including subjective assessment – identification of the taxpayer or taxable person of the tax legal relationship – and objective assessment – determination of the taxable base, identification of the rate(s) to be applied and any deductions from the determined tax. The same author, referring to assessment in the strict sense, includes assessment in the second moment of the dynamics of taxes, clarifying that:

"[by] assessment, in turn, the tax is determined by applying the rate to the taxable base, tax that coincides with the tax to be paid, unless there are deductions from the tax, in which case the assessment also encompasses this latter operation" (Cf. Casalta Nabais (2015), "Manual de Direito Fiscal", 297 and 62).

Furthermore:

"Assessment also constituted an enforceable, executive, semi-executory administrative act which, given its character, on one hand, strictly binding and, on the other, widely standardized, lends itself greatly to having an electronic nature, that is, to being carried out using electronic means, as is already the case, since our system provides for, indeed requires, the filing and consultation of declarations by taxpayers and third parties electronically, that is, by electronic declarations" (Cf. Casalta Nabais (2015), 301-302).

With respect to the assessment of Stamp Tax, it should be noted that Article 3 of Law no. 55-A/2012, of 29 October, introduced amendments to various articles of the Stamp Tax Code, approved by Law no. 150/99, of 11 September, including its Article 44, paragraph 5 of which now provides that:

"5 – Where assessment of the tax referred to in item no. 28 of the General Table occurs, the tax is paid within the periods, terms and conditions defined in Article 120 of the IMI Code."

And, in turn, Article 120 of the IMI Code, as amended by Article 215 of Law no. 66-B/2012, of 31 December (State Budget for 2013), has the following wording:

"Article 120 – Payment Deadline

1 – The tax shall be paid:

a) In one installment, in the month of April, when its amount is equal to or less than € 250;

b) In two installments, in the months of April and November, when its amount is greater than € 250 and equal to or less than € 500;

c) In three installments, in the months of April, July and November, when its amount is greater than € 500.

2 – (…).

3 – (…).

4 – In the cases provided for in paragraphs 1 and 3, non-payment of one installment or one annuity within the established period entails the immediate maturity of the remaining ones.

5 – If the delay in assessment is attributable to the taxable person, he is notified to proceed with payment of the tax relating to all outstanding years." (emphasis in original)

From these provisions it follows that payment of Stamp Tax must be made in three installments, in the months of April, July and November, when its amount exceeds € 500.

Here it is necessary to clarify one point.

An installment does not equal a tax assessment. An installment is part of a tax assessment that is divided in time for payment purposes. On this point, the Respondent is correct. However, the Respondent cannot draw from this point the conclusion that if this is so the act is not reviewable.

In fact, moments of assessment and moments of payment are clearly individualized in the law.

For payment purposes, we have already referred to the rules contained in the law. Let us now examine the rules for assessment purposes.

Under paragraph 7 of Article 23 of the Stamp Tax Code, as amended by Article 3 of Law no. 55-A/2012, of 29 October:

"7 – In the case of tax due for situations provided for in item no. 28 of the General Table, the tax is assessed annually, in relation to each urban property, by the central services of the Tax and Customs Authority, applying, with the necessary adaptations, the rules contained in the IMI Code" (emphasis in original).

It is worth stressing that the assessment of Stamp Tax is, under paragraph 7 of Article 23 of its Code, only one. And it is carried out annually. While its payment may, under the law – most notably under Article 120 of the IMI Code – occur in three installments whose sum will, in principle, amount to the total annual assessment.

Now, as one tax arbitral tribunal has understood, in Process no. 726/2014-T, the expression "the tax is assessed annually" indicates that a single annual assessment is carried out, although it may be divided, for payment purposes, into installments, and not into as many assessments as there are installments in which the debt is to be satisfied – "the division of an assessment into installments will be, therefore, nothing more than a mere revenue collection technique" and, we add, of apportionment of the tax burden by the taxable person.

In fact, with respect to Stamp Tax assessment, it has been repeatedly stated, in various decisions of arbitral tribunals constituted under the auspices of the CAAD that (to this effect, among others, the decisions rendered in processes nos. 205/2013-T, 408/2014-T, 726/2014-T, 736/2014-T, 90/2015-T and 137/2015-T):

"the tax assessment is only one and only it will constitute an injurious act, susceptible of being the object of a single challenge, so that when the law provides for its payment in several installments, staggered over time, the annulment of the tax act will have consequences with respect to all of them, causing the obligation to pay to cease or imposing the obligation to refund the amounts of tax already paid by the taxable person, as well as redress of the situation through payment of compensatory interest, all at the charge of the Tax and Customs Authority." (arbitral decision rendered in process no. 90/2015-T).

And here we agree with the above-referenced decisions.

However, do not confuse matters.

Stating that the Stamp Tax assessment is only one, and that there are not as many assessments as installments, thus denying the autonomous and individual challengeability of each installment, does not mean that the challengeability of Stamp Tax assessment acts which, for payment purposes, are divided into two or three installments, is entirely denied.

That is to say, there is no doubt that we have only one Stamp Tax assessment act which, by force of the provision in Article 120 of the IMI Code, applicable on a subsidiary basis, must be paid in three installments. Each installment constitutes only the tripartite payment of the same Stamp Tax assessment act in question.

This was also the understanding of a tax arbitral tribunal, in process no. 479/2015-T, in which it was held that:

"In sum, and from the conjunction of the legal provisions referred to above, it is possible to conclude that Stamp Tax is assessed annually, and payment in installments is nothing more than a collection technique for the tax and not its partial payment. [5]

In this manner, the assessment is only one and only it constitutes an injurious act, susceptible of being challenged. (…)

That is to say, a declaration of illegality of the tax acts of assessment of Stamp Tax is required, to which correspond the respective payment installments.

Therefore, contrary to what the TA states, the object of the request for arbitral pronouncement is the tax act of assessment and not each of the Stamp Tax installments individually considered".(…)

Thus, the argument invoked by the TA regarding the incompetence of the arbitral tribunal, as well as the non-appealability of the acts, falters, and therefore the verification of the exceptions in question is deemed to lack merit".

Now let us look to the concrete case:

With respect to the property, in full ownership, located at … no. …, registered in the urban property matrix under article … in 2015, a Stamp Tax assessment act was issued on the tax assessed value of each of the units/divisions capable of independent use, totaling a taxable amount of € 2,284,750.00 (cf. Doc. 1 of the request for tribunal constitution).

This assessment act gave rise to the issuance of collection notes, for each unit/division capable of independent use, for payment in three installments. All of them forming an integral part of the assessment act.

The Stamp Tax assessment acts in question thus gave rise to a first installment, for which the payment deadline was 30 April 2015. They also gave rise to a second installment, for which the payment deadline was 31 July 2015. Finally giving rise to a third installment, in the amount of € 7,615.82 – to which correspond collection notes nos. 2015 …; 2015 …; 2015 …; 2015 …; 2015 …; 2015 …; 2015 …; 2015 …; 2015 …; 2015 … – and for which the payment deadline was 30 November 2015.

Thus, it is a single tax assessment act, issued on the TPV of the part of the property allocated to residential use, although paid in three installments, with each collection note, forming an integral part of a given installment – let it be stressed – of the same tax act – relating to a unit/division capable of independent use.

And it is the legality of the Stamp Tax assessment acts that the Claimant contests, even though she has filed a request for tribunal constitution for the first two installments – process 666/2015-T – and another request – the present one – for the third installments. Each installment forms part of/is included within the total amount of tax assessed by the Respondent. The Claimant contests here part – the part corresponding to the third installment – of a whole – the Stamp Tax assessment acts issued.

Once again, there is no doubt that the Stamp Tax assessment is only one and that it is done annually. There is also no doubt that assessment act cannot be confused with payment. There is also little doubt that when payment is bipartite or tripartite the assessment act giving rise to it is not disfigured into a collection note or appearance of a tax act to the extent that each payment/installment is part of a whole, the underlying tax act.

What cannot be confused are matters of the object of the request – annulment of the underlying tax act relating to one or more installments relating to the payment of that act – with matters of legal qualification of acts. Or in other words, one cannot confuse the legal qualification of the Stamp Tax assessment act as a tax act, although materialized for payment purposes at two or three different moments in time, with payment itself.

For from the question of what is the object of the request flow possible questions of litispendence, or at the limit, questions of res judicata. This, in the case where taxpayers challenge, or as in this case file requests for tribunal constitutions for each installment in so far as the same act is always being analyzed – which, it may be added, appears to have occurred in the concrete case.

It is therefore insisted that the object of the request for arbitral pronouncement presented by the Claimant is the review of the (il)legality of the Stamp Tax assessment acts, of item 28 of the TGIS, referring to the year 2014, issued on the tax assessed value of the parts of the property with residential allocation. Thus, when the Claimant requests the constitution of an arbitral tribunal after the expiry of the voluntary payment period for the third installment, and even though she is bringing these collection notes to the knowledge of this Arbitral Tribunal and not the assessment acts themselves, what she seeks is, in fact, the review of the underlying assessment acts.

The conclusion we have been defending above would even be reached in a more empirical and consequently less legal argument.

Let us see:

If in the case of taxes whose payment is not carried out all at once – such as the cases possibly of IMI or Stamp Tax – the taxpayer is not notified of the assessment act but only of the two or three installments to which there is place, would this mean that he could not react administratively, judicially or jurisdictionally to this act (tax, or tax matter or other)? A conclusion such as this would contradict, at the very least, the principle of effective judicial protection and of access to law, which is grounded constitutionally both in Article 20, as well as in Article 268, paragraph 4 of the Constitution.

Recall that the principle of effective judicial protection requires that for any and every conflict that deserves judicial resolution it be possible to find a competent court and a procedural remedy that provides adequate and sufficient protection to interests deserving legal protection.

In the words of GOMES CANOTILHO and VITAL MOREIRA, the right to effective judicial protection is enshrined in Article 20, paragraph 1 of the CRP, and it is itself, "a fundamental right constituting an indispensable guarantee of the protection of fundamental rights, being therefore inherent to the idea of the rule of law" (Cf. Gomes Canotilho/Vital Moreira (2010), "Constituição da República Portuguesa Anotada", Vol. I, 408)

This principle and fundamental right is also embodied in Article 9 of the General Tax Law, in which paragraph 1 guarantees access to tax justice for the full and effective protection of all rights or legally protected interests and, in paragraph 2, the right of access to courts, providing for the possibility of challenging or appealing tax acts that infringe rights or legally protected interests.

Now, as far as matters of competence are concerned – those relating to the legal qualification of acts – Article 2, paragraph 1, subparagraph a), of the RJAT determines the competence of the arbitral tribunal for the review of claims relating to the declaration of illegality of acts of assessment of taxes, of self-assessment, of withholding at source and of payment on account.

Retrieving what was stated above, the object of the present arbitral proceeding corresponds, without a shadow of a doubt, to the Stamp Tax assessment acts underlying the challenged collection notes, regardless of, by mere revenue collection technique, its payment (and, logically, its collection) being divided into two or three installments.

And in the name of the principle of effective judicial protection, these Stamp Tax assessment acts – let it be stressed, although they are paid in three installments – shall (or must necessarily be) reviewable.

Thus, the dilatory exception of non-appealability of assessment installments lacks merit.

II.B Exception of Litispendence

As stated above, by assuming the object of the request in the case of taxes paid in two or more installments – as in the case at hand – as the annulment of the underlying tax act, questions of litispendence or res judicata may be at issue, namely when two different tribunals are called upon to decide on the same tax acts although with respect to different installments.

Indeed, if upon notification for payment of the first installment, the taxable person requests the constitution of an arbitral tribunal contesting the legality of the Stamp Tax assessment act, again requesting the constitution of another arbitral tribunal contesting the legality of the same assessment act when notified of the second or third installments, an exception of litispendence or res judicata will be found, to the extent that in the scope of these three requests for arbitral tribunal constitution presented the request is always the same: the annulment of the Stamp Tax assessment act, the payment of which is divided into three installments.

Thus, to state that the taxpayer may react contentiously against any one of the installments in so far as the underlying tax act is the same, does not mean that he may react against all of them at the same time and in different proceedings. All because, strictly speaking, reacting against the first, the request being the (il)legality of the Stamp Tax assessment act, a decision with respect to this will "encompass" the following installments. Not reacting to the first he may react against the second, and not reacting to the second he may react to the third.

However, should he react against all – using different remedies or initiating separate proceedings – there will be litispendence or res judicata, all because the object of the request – Stamp Tax assessment act – is, let it be stressed, the same.

In civil procedure litispendence, or the exception of litispendence, presupposes the repetition of a cause while the previous one is still pending, under the terms of Article 580, paragraph 1, of the CPC, applicable to arbitral proceedings under Article 29, paragraph 1, subparagraph e) of the RJAT. The exception of litispendence has the purpose of preventing the tribunal from being placed in the position of having to contradict or reproduce a previous decision as provided in Article 580, paragraph 2, of the CPC. In turn, Article 581 sets forth the requirements of litispendence (and of res judicata), establishing what is understood by "repetition of the cause". Thus, this article requires that the triple identity of parties, claim and cause of action be verified.

That is, that the parties be the same from the standpoint of their legal quality, that the same legal effect be sought to be obtained, and that the claim put forward in the two actions proceeds from the same legal fact.

Litispendence thus has subjective limits – the identity of the parties from the standpoint of their legal quality –, objective limits – the identity of the claim and the cause of action, under the terms of Article 581, paragraphs 3 and 4 cited – and also temporal limits – since the occurrence of litispendence must be assessed by reference to the moment it is reviewed – which means that, even if there is a repetition of the cause, if the claimant comes to withdraw from one of the actions before the exception of litispendence is reviewed, the situation of litispendence ceases to exist.

With respect to the application of the exception of litispendence in arbitral proceedings, it is necessary to refer to what should be understood as identity of claim and of cause of action, following closely the understanding of CARLA CASTELO TRINDADE (Cf., "Regime Jurídico da Arbitragem Tributária Anotado", p. 149-153).

Now, in the request for arbitral pronouncement what is at issue is the challenge of a tax act and the request is for the declaration of illegality. Thus, there will be identity of claim if in two distinct requests for arbitral tribunal constitution, the declaration of illegality of the same tax act(s) is requested.

On the other hand, this request will be made on the basis of any of the defects provided for in Article 99 of the Tax Procedure Code, namely the erroneous qualification and quantification of income, profits, asset values and other tax facts; incompetence; absence or defect of the legally required reasoning and omission of other legal formalities.

Now, the cause of action will be the same when the grounds invoked for the declaration of illegality are identical. In both proceedings there is alleged the erroneous qualification and quantification of income, profits, asset values and other tax facts resulting from the same facts or with the same legal reasoning; or in both there is alleged incompetence; or in both the absence or defect of the legally required reasoning resulting from the same facts or with the same legal reasoning is argued; or, finally, in both the same omission of other legal formalities is alleged.

Thus, given identity of parties and identity of claim, the verification of litispendence in tax arbitral proceedings depends on the invocation of the same grounds for the declaration of illegality of the act that is to be challenged.

The exception of litispendence, although not alleged by the Respondent, is an exception of official knowledge, under Article 578 of the CPC under Article 29, paragraph 1, subparagraph e) of the RJAT.

Having established this, it is necessary to assess whether this exception exists in the concrete case.

Now this tribunal is aware that the Claimant previously filed, prior to the request being analyzed now, a request for tribunal constitution relating to the first and second installments of Stamp Tax assessed for the year 2014, which is pending before a tax arbitral tribunal of the CAAD under process number 666/2015-T.

Thus, and in the sequence of what was understood above regarding the object of the present proceeding, the Claimant filed two requests for tribunal constitution, both with the same object: the Stamp Tax assessment acts that assessed Item no. 28.1 affecting the same property relating to the year 2014, albeit with respect to different installments.

Process no. 666/2015-T, in which the assessment act was challenged by way of the first and second installments, awaits the rendering of a decision by the arbitral tribunal.

Now, the rule of litispendence applicable to tax proceedings, whether judicial or arbitral, is that contained in the CPC and which we referred to above. It is therefore necessary to assess whether the triple identity required by Article 581 of the CPC, applicable on a subsidiary basis, is verified.

Now, there is no doubt whatsoever that the identity of parties is verified, to the extent that the Claimant is in both proceedings "A…, Lda" and the Respondent is the Tax and Customs Authority. With respect to identity of claim, this is also identical in both proceedings – the declaration of illegality and consequent annulment of the Stamp Tax assessment acts relating to the year 2014.

Regarding the identity of the cause of action, this depends on the invocation of the same grounds for the declaration of illegality of the act that is to be challenged. This identity exists to the extent that, in both proceedings, the ground of illegality is, precisely, defect of violation of law due to erroneous interpretation and application of Item 28.1 of the General Table of Stamp Tax (TGIS) and the unconstitutionality of the provisions of item no. 28 of the TGIS, due to violation of the principles of equity, legality, contributive capacity, justice, equality and fiscal proportionality, under the terms of Articles 103 and 104 of the CRP, in the interpretation given thereto by the Tax and Customs Authority.

Thus, treating cases with the same parties, the same claim and an identical cause of action, in arbitral proceedings pending simultaneously, the occurrence of an exception of litispendence is verified, which, under the terms of Article 576, paragraph 2 of the CPC under Article 29, paragraph 1, subparagraph e) of the RJAT, prevents this tribunal from knowing the merits of the case.

Under Article 582, paragraph 1 of the CPC, applicable under Article 29, paragraph 1, subparagraph e) of the RJAT, litispendence must be raised in the action filed in second place, which is deemed to be the action for which the defendant was cited later.

For the foregoing reasons, and under Articles 577, subparagraph i), 576, 580, 581, 576, paragraph 2 and 278, paragraph 1, subparagraph e) of the CPC, under Article 29, paragraph 1, subparagraph e) of the RJAT, the Respondent is absolved of the present arbitral instance.

V. DECISION

Therefore, in this arbitral tribunal it is decided:

a) To find the exception of autonomous non-appealability of installments to lack merit;

b) To absolve the Respondent of the present arbitral instance, given the existence of a dilatory exception of litispendence, to the extent that process no. 666/2015-T is pending before the CAAD, whose parties, claim and cause of action are identical to the present proceeding.

VI. VALUE OF THE PROCEEDING

The value of the proceeding is fixed at € 7,615.82, under the terms of Article 97-A, paragraph 1, a), of the Tax Procedure and Process Code, applicable by force of subparagraphs a) and b) of paragraph 1 of Article 29 of the Legal Regime of Tax Arbitration and paragraph 2 of Article 3 of the Regulation of Costs in Tax Arbitration Proceedings.

VII. COSTS

Under the terms of Articles 12, paragraph 2, and 22, paragraph 4, both of the Legal Regime of Tax Arbitration, and Article 4, paragraph 4, of the aforementioned Regulation, the arbitration fee is fixed at € 612.00 under the Terms of Table I of the Regulation of Costs in Tax Arbitration Proceedings, to be paid by the Claimant, since, due to a fact attributable to her, litispendence was declared with the consequent absolution of the present instance.

Let notice be given.

Lisbon

21 June 2016

The Arbitrator

(Carla Castelo Trindade)

Text prepared by computer, under the terms of Article 138, paragraph 5 of the Civil Procedure Code (CPC), applicable by reference from Article 29, paragraph 1, subparagraph e) of the Tax Arbitration Legal Regime.

The present decision is written in accordance with the former spelling rules.

Frequently Asked Questions

Automatically Created

What is Verba 28.1 of the Portuguese General Stamp Tax Table (TGIS) and how does it apply to high-value properties?
Verba 28.1 of the Portuguese General Stamp Tax Table (TGIS) imposes annual Stamp Tax on high-value real estate properties, specifically targeting urban properties with residential units susceptible to independent use (floors or divisions that can function autonomously). The tax applies to properties whose aggregate tax assessed value exceeds statutory thresholds. Introduced and amended by Law 55-A/2012 of 29 December, Item 28.1 calculates the tax based on the sum of patrimonial values of all residential units within a single urban property. The tax is assessed annually by the Tax Authority based on property valuations, and taxpayers receive collection notes that may divide the total amount into up to three installments throughout the year. The provision targets luxury real estate holdings and generates recurring revenue from high-value residential property ownership, representing a wealth tax component within Portugal's Stamp Tax system.
Can individual installments of a stamp tax assessment be independently challenged before the CAAD arbitration tribunal?
Yes, individual installments of stamp tax assessments can be independently challenged before CAAD, according to Process 120/2016-T. The tribunal established that while there is only one Stamp Tax assessment act per year, its division into payment installments (first, second, or third) does not prevent judicial review. The key distinction is between the assessment act itself—which is the challengeable administrative act—and the payment mechanism through which it is collected. Each installment represents a manifestation of the underlying assessment act, and taxpayers may initiate their challenge upon receiving any installment, with the reaction period calculated from that installment's notification date. However, challenging the same assessment through multiple installments creates litispendência (lis pendens), a procedural bar that requires dismissal of subsequent challenges. The Tax Authority's argument that installments lack independent appealability under Article 89(4)(i) CPTA was rejected, affirming taxpayer access to arbitration while preventing duplicative proceedings through litispendência rules.
How does the CAAD determine whether property units are susceptible to independent use under Portuguese stamp tax law?
CAAD determines whether property units are susceptible to independent use under Portuguese stamp tax law by examining whether floors or divisions within an urban property can function autonomously for residential purposes. This analysis focuses on whether each unit possesses the physical characteristics, infrastructure, and legal configuration enabling separate occupation and use independent of other units in the property. The concept of 'andares ou divisões suscetíveis de utilização independente' (floors or divisions susceptible to independent use) is central to applying Item 28.1 TGIS, as the tax base aggregates the assessed values of all such independently usable residential units within a single property. The determination considers architectural layout, separate entrances, self-contained facilities (kitchens, bathrooms), utility connections, and cadastral registration. Properties with multiple autonomous residential units trigger higher Stamp Tax liability than single-family dwellings, as each independently usable unit contributes its patrimonial value to the aggregate tax base. This prevents fragmentation strategies where owners might argue that luxury properties should be taxed as single units rather than as collections of valuable independent residences.
What constitutional principles apply when challenging stamp tax assessments on real estate under Articles 103 and 104 of the Portuguese Constitution?
When challenging stamp tax assessments on real estate under Articles 103 and 104 of the Portuguese Constitution, several constitutional principles apply as grounds for review. Article 103 enshrines the tax system's foundational principles, requiring that taxation satisfy public needs, promote just wealth distribution, and respect equality and contributive capacity. Article 104 specifically addresses progressive taxation and wealth redistribution objectives. Claimants challenging Item 28.1 TGIS assessments invoke: (1) the principle of equity, requiring fair treatment of similarly situated taxpayers; (2) the principle of legality, demanding clear statutory authorization for tax obligations; (3) the principle of contributive capacity, requiring taxes to correlate with taxpayers' economic ability to pay; (4) the principle of justice, ensuring tax burdens align with constitutional values; (5) the principle of equality, prohibiting arbitrary discrimination; and (6) the principle of fiscal proportionality, preventing excessive or confiscatory taxation. These principles provide substantive grounds to challenge both the interpretation and application of stamp tax provisions and the constitutional validity of the statutory provisions themselves, particularly when Tax Authority interpretations allegedly exceed legislative intent or impose disproportionate burdens on property ownership.
What is the role of litispendência (lis pendens) as a procedural defense in Portuguese tax arbitration proceedings?
Litispendência (lis pendens) serves as a dilatory procedural defense in Portuguese tax arbitration that prevents duplicative proceedings concerning the same tax assessment. When a taxpayer challenges the same Stamp Tax assessment act through multiple arbitration requests—typically by contesting different installments of the same annual assessment—the second or subsequent proceedings are barred by litispendência. The defense requires identity of parties (same taxpayer and Tax Authority), identity of cause of action (challenge to the same assessment act), and identity of object (annulment of the same tax determination). In Process 120/2016-T, the tribunal explained that because there exists only one Stamp Tax assessment per year, despite payment division into installments, challenging the assessment through its first installment and then again through its third installment creates litispendência. This procedural bar results in 'absolvição da instância' (absolution from the instance)—dismissal without prejudice to the merits. Litispendência protects judicial economy by preventing parallel proceedings that could yield contradictory decisions, ensures res judicata integrity, and compels taxpayers to consolidate all challenges to a single assessment in one proceeding, calculated from their chosen installment notification date.