Process: 133/2015-T

Date: October 29, 2015

Tax Type: Selo

Source: Original CAAD Decision

Summary

This CAAD arbitration case (133/2015-T) addresses the application of Stamp Tax under item 28.1 of the General Stamp Tax Table (TGIS) to vertical property with multiple independent units. The claimant challenged seven Stamp Tax assessments totaling €3,617.15 for the third installment of 2013, relating to an urban building in Lisbon registered as full ownership with eight divisions having independent use. The central tax issue concerns whether the €1,000,000 tax asset value (VPT) threshold under Verba 28.1 applies to each independent unit separately or to the entire building as a whole. The claimant argued that since no individual floor or unit exceeded €1,000,000 in VPT, no Stamp Tax should be levied, making the assessments illegal. Additionally, the claimant raised constitutional concerns, alleging violations of the equality principle under Article 13 and Article 104(3) of the Portuguese Constitution. The Tax and Customs Authority responded by invoking the exception of res judicata, arguing the case was moot because a prior CAAD decision in case 639/2014-T had already annulled Stamp Tax assessments for the same property for 2013. That earlier case, decided in February 2015, addressed the first and second installments and ruled in favor of the claimant. The Authority contended that the prior decision's scope encompassed all 2013 assessments for the property, not merely the installments specifically mentioned. The arbitral tribunal scheduled a hearing to determine whether res judicata applied, requiring analysis of whether there was identity between the acts challenged in both proceedings and whether the prior decision's res judicata effect extended to the third installment assessments contested in the present case.

Full Decision

ARBITRAL DECISION

CAAD: Tax Arbitration

Case No. 133/2015 – T

Subject Matter: Stamp Tax – item 28.1 of the General Stamp Tax Table

Claimant/Applicant: A

Respondent: Tax and Customs Authority (hereinafter T.C.A.)

1. Report

On 26-02-2015, A…, widow, taxpayer no. …, resident at Street …, No. …, …, Lisbon, in the capacity of head of the estate of B…, taxpayer no. …, hereinafter referred to as the Claimant, submitted to the Center for Administrative Arbitration (CAAD) the request for constitution of an arbitral tribunal with a view to the declaration of illegality of seven Stamp Tax assessments, relating to the third installment of the year 2013, in the total amount of 3,617.15 €, relating to item 28.1 of the General Stamp Tax Table. Said documents relate to the urban property situated at Street …, No. …, …, … and … of the parish of ..., municipality of Lisbon, registered in the urban property tax register of the said parish under article …, constituted in full ownership and with eight divisions with independent use, and to the year 2013.

The Claimant alleges that, since none of the floors with independent use has a tax asset value (TAV) exceeding one million euros (1,000,000 €), Stamp Tax cannot be assessed or collected, whereby the assessments in question are illegal.

The Claimant further alleges that the interpretation of item 28.1 underlying the assessments now challenged is not in conformity with the Constitution of the Portuguese Republic (CPR), by violation of the principle of equality, enshrined in article 13 of the CPR, as well as the provisions of its article 104, no. 3.

Finally, the Claimant requests compensation under article 53 of the General Tax Law (GTL), for losses resulting from any guarantees that have been provided to suspend the tax enforcement proceedings that may be instituted.

The Claimant also states that on 28-08-2014, she filed a request for arbitral pronouncement for declaration of illegality of the Stamp Tax assessments relating to the same property and relating to the first and second installments of the year 2013, a process that proceeded under case no. 639/2014-T. And on 19-02-2015 she was notified of the decision in the said process, which found the request well-founded and annulled the tax acts in question.

The Tax and Customs Authority submitted a response on 01-06-2015, requesting that the supervening futility of the dispute be declared, pursuant to article 277, subparagraph e) of the Code of Civil Procedure (CCP), applicable by force of article 29 of the RTAT, taking into account that the Stamp Tax assessment acts now challenged have already been subject to decision within the scope of CAAD case no. 639/2014-T.

The T.C.A. states that, although the Claimant has petitioned in that process only the part relating to the first and second stamp tax assessments, the decision in the said process annulled the stamp tax assessment acts of the year 2013 relating to the immovable property situated at Street …, No. …, …, … and … of the parish of ..., municipality of Lisbon, registered in the urban property tax register of the said parish under article ….

The T.C.A. further states that, should this not be so understood and the files are to proceed, the T.C.A. presents as its response the one presented within the scope of case no. 639/2014-T.

Finally, the T.C.A. requested waiver of the holding of the meeting and the production of arguments.

A sole arbitrator was appointed on 15-04-2015, Suzana Fernandes da Costa. In accordance with the provisions of article 11, no. 1, subparagraph c) of the RTAT, the single arbitral tribunal was constituted on 30-04-2015.

On 17-06-2015, an order was issued ordering notification of the Respondent to attach to the file the decision in CAAD case no. 639/2014-T, and notification of the Claimant to pronounce herself within 10 days on the T.C.A.'s request for waiver of the meeting and of arguments.

Since the T.C.A. did not attach to the file the decision in case no. 639/2014-T within the stated deadline and an exception had been raised, an order was issued scheduling the meeting provided for in article 18 of the RTAT for 21-10-2015 at 15:30 hours.

At the meeting there appeared Mr. C, in the capacity of representative of the Claimant, and Ms. D, jurist in representation of the Director General of the T.C.A.

The representative of the Claimant pronounced herself on the exception invoked by the Respondent in its response, and likewise, the representative of the Respondent declared her intention to attach to the file the decision in case no. 639/2014-T, which was admitted.

Furthermore, the parties confirmed that in the CAAD decision of case no. 639/2014-T there is an identity in the Claimant and in the property which is the subject matter of the files relating to the present case.

The arbitral tribunal further decided to designate 29-10-2015 for the delivery of the arbitral decision. Finally, the Claimant was warned to, by that date, proceed with payment of the subsequent arbitral fee.

The parties have legal standing and capacity and are legitimate (articles 4 and 10, nos. 1 and 2 of the RTAT and article 1 of Ordinance No. 112-A/2011 of 22 March).

The arbitral request is timely, pursuant to article 10, no. 1, subparagraph a) of Decree-Law No. 10/2011 of 20 January and article 102, no. 1, subparagraph a) of the Code of Tax Procedure and Process.

The case does not suffer from nullities and no preliminary matters were raised.

2. Factual Matters

2.1. Facts Proven:

Having analyzed the documentary evidence produced and the position of the parties contained in the procedural documents, the following facts are considered proven and with interest for the decision of the case:

  1. The Claimant filed, on 28-08-2014, a request for arbitral pronouncement for declaration of illegality of the Stamp Tax assessments of the year 2013, relating to the first and second installments, relating to the property situated at Street …, No. …, …, … and … of the parish of ..., municipality of Lisbon, registered in the urban property tax register of the said parish under article …, a process that proceeded under case no. 639/2014-T.

  2. On 19-02-2015 the Claimant was notified of the decision in the said arbitral process, which found the request well-founded and annulled the Stamp Tax assessments of the year 2013 relating to the said property.

No other facts with relevance for the decision of the case were proven.

2.2. Justification of the Proven Factual Matters:

With respect to the facts proven, the arbitrator's conviction was based on the documents attached to the file by the parties and on facts admitted by agreement.

3. Matters of Law:

3.1. On the Exception of Res Judicata

The Tax and Customs Authority requested, in its response, the declaration of the supervening futility of the dispute, pursuant to article 277, subparagraph e) of the Code of Civil Procedure (CCP), applicable by force of article 29 of the RTAT, taking into account that the Stamp Tax assessment acts now challenged would have already been subject to decision within the scope of CAAD case no. 639/2014-T.

The exception of res judicata is thus at issue, which must be assessed.

Article 24, no. 2 of the RTAT provides that the arbitral decision on the merits of the claim, which does not admit of appeal or challenge, precludes the right to, on the same grounds, claim, challenge, request revision or promote official revision, or raise arbitral pronouncement on the acts which are the subject matter of these requests or on the consequent assessment acts.

Thus, the exception of res judicata requires a "subsisting relation between what has already been judged and what is submitted for decision with the new action, in the present case, the new request for arbitral pronouncement," as referred to in the CAAD decision in case no. 141/2015-T.

Comparing the present files with the decision in CAAD case no. 639/2014-T attached by the Respondent, there is identity of the Claimant and identity of the immovable property which is the subject matter of the Stamp Tax assessments. Furthermore, in case no. 639/2014-T, the Stamp Tax assessment of the year 2013 was at issue, and in the present files the Claimant seeks the annulment of the third installments of the Stamp Tax assessment of the year 2013.

See point 3 of the report of the said decision, which states "the Claimant seeks the annulment of the acts of Stamp Tax (ST) assessment, dated 17/03/2014, practiced under item 28.1 of the General Stamp Tax Table, amended by article 4 of Law No. 55-A/2012, of 29/12, with reference to the year 2013 and to the divisions susceptible of independent use, with residential use, of the urban property registered in full ownership under article … of the urban property tax register of the parish of ..., municipality and district of Lisbon, on the grounds of illegality and unconstitutionality." And the decision states that "the Arbitral Tribunal decides: a) to find well-founded the request for annulment, with all legal effects, of the assessed acts challenged," and as to the value of the case mentions "the value of the case is fixed at € 10,851.50," a value which corresponds to the sum of the three installments of Stamp Tax for the year 2013.

It is thus verified that the present arbitral petition seeks the annulment of the 2013 Stamp Tax assessments, an effect which has already been achieved with the decision in case no. 639/2014-T.

As the decision in case no. 141/2015-T states, "the stamp tax assessment act assessed was only one, the T.C.A. having been condemned to annul the entire Stamp Tax assessment act in question."

Article 23, no. 7 of the Stamp Tax Code provides that "in the case of tax owed by the situations provided for in item no. 28 of the General Table, the tax is assessed annually, (…), applying, with the necessary adaptations, the rules contained in the CIMT."

Thus, as the tax is assessed annually, there is only one assessment per year, although payment is made in three installments.

See the CAAD decisions in cases no. 205/2013 and 726/2014, which state that "from the circumstance that the value of the assessment can be paid in several installments, it does not follow that there are three assessments. It is, rather, an assessment that can be paid in several installments, and the taxpayer is not prevented from challenging it due to the fact that only the payment period for one of them has elapsed."

Thus, we conclude that having annulled the Stamp Tax assessment act of the year 2013 of article … within the scope of the decision in case no. 639/2014-T, and there being no other matter to be discussed in the present case, the exception of res judicata invoked by the T.C.A. in the present files must be found well-founded.

4. Decision

In light of the foregoing, it is determined that the exception of res judicata invoked by the Respondent is well-founded, and consequently, the request for arbitral pronouncement is found to be without merit.

5. Value of the Case:

In accordance with the provisions of article 306, no. 2, of the CCP and 97-A, no. 1, subparagraph a) of the CTPP and 3, no. 2 of the Regulation of Costs in Tax Arbitration Proceedings, the value of the case is fixed at 3,617.15 €.

6. Costs:

Pursuant to article 22, no. 4, of the RTAT, and Table I annexed to the Regulation of Costs in Tax Arbitration Proceedings, the amount of costs is fixed at 612.00 €, owed by the Claimant of the arbitral request.

Notify.

Lisbon, 29 October 2015.

Text prepared by computer, pursuant to article 138, no. 5 of the Code of Civil Procedure (CCP), applicable by reference from article 29, no. 1, subparagraph e) of the Tax Arbitration Regime, reviewed by me.

The sole arbitrator,

Suzana Fernandes da Costa

Frequently Asked Questions

Automatically Created

What is Verba 28.1 of the Portuguese Stamp Tax General Table and how does it apply to properties valued over one million euros?
Verba 28.1 of the Portuguese General Stamp Tax Table (Tabela Geral do Imposto do Selo) imposes Stamp Tax on urban properties with a tax asset value (valor patrimonial tributário - VPT) exceeding €1,000,000. This provision applies annually to properties meeting this valuation threshold. The tax is assessed in installments throughout the year. In cases involving vertical property (buildings divided into independent units), a key interpretive question arises: whether the €1 million threshold applies to each autonomous unit individually or to the aggregate value of the entire building registered under a single property article. The claimant in this case argued that the threshold must be assessed unit-by-unit, meaning Stamp Tax only applies if an individual unit exceeds €1 million in VPT.
How does the CAAD assess Stamp Tax liability for buildings registered as vertical property with independent units?
The CAAD (Centro de Arbitragem Administrativa) assesses Stamp Tax liability for vertical property by examining whether the property structure consists of independent units with separate use and whether each unit should be evaluated individually against the €1,000,000 VPT threshold under Verba 28.1. In this case, the building was registered as full ownership (propriedade plena) with eight divisions having independent use (uso independente). The arbitration process involved determining whether the tax administration correctly applied Stamp Tax by aggregating the total property value or whether each autonomous unit should be assessed separately. A prior CAAD decision (639/2014-T) had ruled in favor of the taxpayer on this issue for the same property, annulling assessments for earlier 2013 installments, establishing precedent for how vertical property should be treated under this stamp tax provision.
Is the €1,000,000 VPT threshold for Stamp Tax applied to each independent unit or to the total property value?
The core dispute in vertical property Stamp Tax cases concerns whether the €1,000,000 VPT threshold applies per independent unit or to the total property value. The claimant's position, supported by a prior favorable CAAD decision (639/2014-T), argues that when a building is divided into autonomous units with independent use, each unit must individually exceed the €1 million threshold to trigger Stamp Tax liability under Verba 28.1. Conversely, the Tax Authority's assessments apparently treated the entire building as a single taxable unit, aggregating the values of all eight divisions. This interpretation significantly impacts tax liability, as a building with multiple units each valued under €1 million would escape taxation under the per-unit approach but face substantial tax under the aggregate approach. The CAAD's prior ruling favoring the per-unit interpretation for the same property suggests this is the legally correct application.
Can a taxpayer challenge Stamp Tax assessments on vertical property through Portuguese tax arbitration at CAAD?
Yes, taxpayers can challenge Stamp Tax assessments on vertical property through Portuguese tax arbitration at CAAD. This case demonstrates the process: the claimant submitted a request for constitution of an arbitral tribunal (pedido de constituição de tribunal arbitral) to challenge seven Stamp Tax assessments relating to Verba 28.1. The arbitration is governed by the RTAT (Regime Jurídico da Arbitragem em Matéria Tributária) and must be filed within the statutory deadlines under Article 10 of Decree-Law 10/2011 and Article 102 of the Tax Procedure Code (CPPT). Taxpayers can contest both the legality of assessments and raise constitutional challenges, as this claimant did by alleging violations of equality principles. CAAD arbitration provides an alternative to judicial courts for resolving tax disputes, with binding decisions that have res judicata effect.
What happens when duplicate Stamp Tax liquidations are contested in separate CAAD arbitration proceedings?
When duplicate Stamp Tax liquidations are contested in separate CAAD arbitration proceedings, the exception of res judicata (caso julgado) may apply to prevent re-litigation of identical issues. In this case, the Tax Authority invoked supervening futility of the dispute under Article 277(e) of the Civil Procedure Code, arguing that the prior CAAD decision in case 639/2014-T—which annulled Stamp Tax assessments for the first and second installments of 2013 for the same property—had already resolved the matter. The critical question is whether the prior decision's res judicata effect extends beyond the specific assessment acts mentioned in that petition to encompass all 2013 assessments for the property, including the third installment challenged in the subsequent case. Article 24(2) of RTAT provides that arbitral decisions preclude subsequent challenges to the same acts on the same grounds. The tribunal must assess whether there is sufficient identity of parties, subject matter, and legal cause between the two proceedings to trigger res judicata protection.