Process: 131/2015-T

Date: October 30, 2015

Tax Type: Selo

Source: Original CAAD Decision

Summary

Arbitral Decision 131/2015-T addressed a Stamp Tax (Imposto do Selo) dispute concerning vertical property ownership in Lisbon under Verba 28.1 of the General Stamp Tax Table (TGIS). The applicants challenged Stamp Tax assessments totaling €9,565.48 for the 2013 tax year on a building held in vertical ownership, registered under an urban article in Areeiro parish. The property comprised multiple floors or divisions with independent use. The applicants argued the assessments violated Verba 28.1 TGIS, Article 67(2) of the Stamp Tax Code (STC), Articles 2, 6(2), and 12(3) of the Real Property Tax Code (CIMI), and constitutional provisions under Articles 13, 18, 103(2), and 104(3) of the Portuguese Constitution (CRP). They sought declarations of illegality and unconstitutionality of the assessments. However, the Tax Authority (TCA) demonstrated that the identical tax payments had already been definitively decided in prior CAAD case 486/2014-T on January 20, 2015. The arbitral tribunal, constituted under Decree-Law 10/2011 (Legal Regime for Tax Arbitration - RJAT), declared extinction of the proceedings due to subsequent loss of purpose under Article 277(e) of the Civil Procedure Code. Since the substantive issues had been resolved with final effect in the earlier arbitration, the tribunal could not re-adjudicate the same matter. The applicants accepted this outcome. Costs of €918 were allocated to the applicants pursuant to Article 6(4) of the Tax Arbitration Costs Regulation (RCTAP), as they had improperly initiated duplicate proceedings for the same tax assessments. This decision illustrates the res judicata principle in Portuguese tax arbitration and the procedural requirements for challenging Stamp Tax on vertical property through CAAD.

Full Decision

ARBITRAL DECISION

  1. On 25 February 2015, A…, Tax Identification Number … and B…, Tax Identification Number …, hereinafter referred to as the Applicants, requested the constitution of an arbitral tribunal and filed a request for arbitral pronouncement, pursuant to subparagraph a) of article 2(1) and subparagraph a) of article 10(1) of Decree-Law No. 10/2011, of 20 January (Legal Regime for Arbitration in Tax Matters, hereinafter referred to only as LRAT), in which the Tax and Customs Authority (hereinafter referred to as TCA) is respondent.

  2. The Applicants are represented in these proceedings by their proxy, Dr. C, and the Respondent is represented by the legal advisors, Dr. D and Dr. E.

  3. The request for constitution of the arbitral tribunal was accepted by His Excellency the President of CAAD and was notified to the Respondent on 30 April 2015.

  4. By means of the request for constitution of the arbitral tribunal and arbitral pronouncement, the Applicants seek the annulment of various Stamp Tax assessment acts, relating to the year 2013, better identified in the initial application, in the total amount of €9,565.48 (nine thousand five hundred and sixty-five euros and forty-eight cents), which fell upon the property registered under urban article … of the parish of Areeiro, municipality and district of Lisbon, in vertical ownership, concerning various floors or divisions with independent use.

  5. Having verified the formal regularity of the application presented, pursuant to the provisions of subparagraph a) of article 6(2) of the LRAT and the Applicants not having proceeded to nominate an arbitrator, the undersigned was appointed by the President of the Ethics Council of CAAD.

  6. The Arbitrator accepted the appointment made, and the arbitral tribunal was constituted on 30 April 2015, at the headquarters of CAAD, located at Avenida Duque de Loulé, No. 72-A, in Lisbon, as evidenced by the minutes of constitution of the arbitral tribunal that were drawn up and are attached to these proceedings.

  7. The Applicants seek that the Stamp Tax assessment acts indicated in paragraph 13 of the initial application be declared illegal and unconstitutional and annulled, for violation of the provisions of item 28.1 of the GTST, article 67(2) of the STC and articles 2, 6(2) and 12(3) of the CITC and articles 13, 18, 103(2) and 104(3) of the CRP, concluding by requesting the TCA to issue in favour of the Applicants the competent titles of annulment of the Stamp Tax assessments.

  8. The Tribunal is competent and is regularly constituted, pursuant to the provisions of subparagraph a) of article 2(1) and articles 5 and 6, all of the LRAT.

  9. The parties have legal standing and capacity, prove themselves to be legitimately interested, are regularly represented and the proceedings are not affected by any nullities.

  10. Given the applications filed with the proceedings by the parties, it is verified that the Stamp Tax payments at issue here have already been the subject of a decision, on 20 January 2015, in the context of CAAD case No. 486/2014-T.

  11. This concerns the second payment of the year 2013 of the property registered under urban article … of the parish of Areeiro, municipality and district of Lisbon, in the amount of €9,565.78, and the aforementioned CAAD decision has already become final.

  12. The TCA acknowledges in its application that we are faced with a subsequent loss of purpose of the action, pursuant to article 277, subparagraph e) of the CCP, applicable by virtue of the provisions of article 29 of the LRAT, a declaration which the TCA requests of the Tribunal.

  13. Notified for this purpose, the Applicants appear in the proceedings to state that they accept everything that the TCA refers to regarding the alleged subsequent loss of purpose of the action.

  14. Thus, in view of the position manifested by the parties and the evident annulment of the Stamp Tax assessment acts here contested, the extinction of the instance is declared due to subsequent loss of purpose of the action, pursuant to article 277, subparagraph e) of the CCP, applicable by virtue of the provisions of article 29 of the LRAT.

  15. The value of the case is set at €9,565.48 (nine thousand five hundred and sixty-five euros and forty-eight cents) pursuant to article 97-A(1)(a) of the TPC, applicable by virtue of subparagraphs a) and b) of article 29(1) of the LRAT and article 3(2) of the Costs Regulation in Tax Arbitration Proceedings.

  16. Costs to be borne by the Applicants in accordance with the provisions of article 6(4) of the RCTAP, considering that the Applicants requested in two proceedings the annulment of the same tax, having already obtained such effect within the scope of the decision rendered in Case No. 486/2014-T.

Costs which, pursuant to article 22(2) of the LRAT, article 4 of the RCTAP, and Table I attached to the latter, are fixed at the amount of €918.00.

Let it be notified.

Lisbon, 30 October 2015

The Arbitrator

(Jorge Carita)

Frequently Asked Questions

Automatically Created

Is Stamp Tax (Imposto do Selo) under Verba 28.1 TGIS applicable to buildings held in vertical property (propriedade vertical)?
Stamp Tax under Verba 28.1 TGIS applies to high-value immovable property including buildings in vertical ownership (propriedade vertical). However, the specific application depends on whether each independent unit meets the €1 million threshold individually or whether the entire building is assessed as one property. This decision references challenges to such assessments but was extinguished procedurally without substantive resolution, as the identical issue had been definitively decided in CAAD case 486/2014-T. The core controversy involves whether vertical property regime creates separate taxable units or a single property for Stamp Tax purposes.
Can individual units in a vertical property building be assessed separately for the €1 million Stamp Tax threshold?
The assessment of individual units in vertical property for the €1 million Stamp Tax threshold is a central controversy in Portuguese tax law. Taxpayers argue that each autonomous fraction with independent registration should be assessed separately under Article 2 of CIMI, which defines autonomous property units. If units are valued individually below €1 million, Verba 28.1 tax would not apply. Conversely, tax authorities may aggregate values when units share a single urban article registration. This decision does not resolve this substantive question, as it was extinguished due to prior adjudication in case 486/2014-T.
What constitutional principles apply to Stamp Tax on high-value residential properties in Portugal?
Constitutional challenges to Stamp Tax on high-value properties invoke multiple principles: equality (Article 13 CRP), protecting disproportionate taxation across similar taxpayers; property rights (Article 62 CRP); proportionality and legal certainty (Article 18 CRP); and tax system fairness (Articles 103-104 CRP). Taxpayers argue that incorrect application of Verba 28.1 to vertical property units violates these principles, particularly when independent units below thresholds are aggregated artificially. Article 67(2) STC and Articles 2, 6(2), and 12(3) CIMI govern property identification and valuation, forming the statutory basis for constitutional challenges.
How can taxpayers challenge Stamp Tax liquidations through CAAD arbitration under Decreto-Lei 10/2011 (RJAT)?
Taxpayers challenge Stamp Tax liquidations through CAAD (Administrative Arbitration Center) under Decree-Law 10/2011 (RJAT) by filing a request for constitution of an arbitral tribunal within the statutory deadline. The request must identify contested acts, amounts, legal grounds, and desired relief. Under Article 2(1)(a) and Article 10(1)(a) RJAT, taxpayers can request annulment of tax assessments. An arbitrator is appointed by CAAD's President if parties don't nominate one. The arbitral tribunal reviews legality, constitutionality, and procedural compliance. Successful challenges result in annulment orders compelling TCA to issue cancellation titles. Decisions are binding and may be appealed on limited grounds.
What are the grounds for annulment of Imposto do Selo assessments on vertical property under Articles 2, 6, and 12 of CIMI?
Grounds for annulment under CIMI Articles 2, 6, and 12 include: misidentification of taxable property (Article 2 defines real property and autonomous units); incorrect property valuation methodology (Article 6(2) establishes valuation rules); and improper classification affecting tax liability (Article 12(3) governs property matrix registration). For vertical property, taxpayers argue each autonomous fraction constitutes a separate 'prédio' under Article 2 CIMI, requiring individual assessment against Stamp Tax thresholds. Violations of these provisions render assessments illegal under Portuguese administrative law, justifying annulment through CAAD arbitration pursuant to Article 10(1)(a) RJAT.