Process: 138/2015-T

Date: May 25, 2015

Tax Type: Selo

Source: Original CAAD Decision

Summary

In CAAD Arbitral Decision 138/2015-T, the tribunal addressed fundamental procedural questions regarding stamp tax assessments under item 28.1 of the General Stamp Duty Table (TGIS). The claimant, A... S.A., sought to challenge only the second and third installments of stamp duty assessments for 2013, while simultaneously having another arbitral proceeding pending that also contested the same assessments. The tribunal considered whether to summarily dismiss the claim based on two grounds: lis pendens (duplicate litigation) and uncontestability of the impugned acts. The core legal issue centered on whether tax assessment installments constitute separate contestable acts or form part of a single assessment. Citing José Casalta Nabais, the tribunal examined the concept of tax assessment as comprising subjective assessment (taxpayer identification), objective assessment (taxable base determination), assessment in strict sense (applying the rate), and possible deductions. Article 23(7) of the Stamp Duty Code establishes that stamp tax under item 28 is assessed annually, with Article 113(2) CIMI providing that assessment occurs in February-March of the following year. The tribunal emphasized that a single annual assessment exists, regardless of payment being divided into installments. The decision reinforced that allowing installment payments does not create multiple assessments or multiple contestable acts. Drawing on Jorge Lopes de Sousa's doctrine, the tribunal confirmed that summary dismissal is permissible in tax arbitration based on procedural economy principles and Article 89 of the Code of Procedure in Administrative Courts. The ruling established that when the same tax assessment is challenged in multiple proceedings, lis pendens applies, warranting summary dismissal of the subsequent claim. This decision clarifies that taxpayers cannot fragment challenges to a single tax assessment by contesting individual installments separately, nor can they pursue duplicate proceedings challenging the same assessment, as both practices violate fundamental procedural principles and waste judicial resources.

Full Decision

ARBITRAL DECISION

I

1. On 27.02.2015, the Claimant A..., S.A., legal entity no. ..., with registered office at ..., no. ..., Lisbon, requested the CAAD to constitute an arbitral tribunal, pursuant to article 10 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 is the Respondent, with a view to the declaration of illegality and unconstitutionality and consequent annulment of the stamp duty assessment acts, item 28.1 of the General Stamp Duty Table, relating to the year 2013, which it identified as follows:

2. The request for constitution of the arbitral tribunal was accepted by His Excellency the President of the CAAD and notified to the Tax and Customs Authority.

Pursuant to the provisions of no. 1 of article 6 of the LRAT, by decision of the President of the Deontological Council, duly communicated to the parties within the legally applicable timeframes, the undersigned was designated as arbitrator, and communicated to the Deontological Council and to the Administrative Arbitration Centre the acceptance of the appointment within the regularly applicable timeframe.

The Arbitral Tribunal was constituted on 7.05.2015.

3. In the request for arbitral ruling submitted the following appears:

4. In the claim, the Claimant formulates the following request:

II-

5. Taking into account that the Claimant requests the declaration of illegality of tax assessments, but only with respect to the second and third installments of the same and, on the other hand, alleges that in another pending arbitral proceeding, it petitioned the declaration of illegality of the assessments, relating (also) to the installments that in this proceeding it comes to impugn, it appears to the Tribunal to be pertinent to consider the occurrence of the verification of the requirements that justify the summary dismissal of the request for arbitral ruling due to the occurrence of the exception of lis pendens or, alternatively, of uncontestability of the impugned acts.

Regarding the possibility of summary dismissal in the arbitral proceeding we cite Jorge Lopes de Sousa[1], whose understanding we follow:

"(...) before receiving the request, the arbitral tribunal should assess whether it suffers from deficiency or remedial irregularities, namely whether it satisfies the requirements indicated in no. 2 of article 10 (...).

This possibility of initial intervention by the arbitral tribunal in the reception of the request seems to also imply the possibility of summary dismissal.

In fact, the issuance of orders of summary dismissal is inserted in the basic principle of procedural economy, which contains its maximum expression in the prohibition of the practice of useless acts (...). For this reason, in the matter of summary dismissal, the rule is that it is only not possible when the calling of the opposing party to the process is carried out ex officio by the secretariat and there is no initial intervention by the arbitral tribunal (...).

Thus, the evaluative coherence of the legal system, which is the primary interpretive element (article 9, no. 1 of the Civil Code), imposes the conclusion that the summary dismissal of the petition for judicial impugnation will be admissible.[2]

In accordance with the provisions of article 89 of the Code of Procedure in Administrative Courts, subsidiarily applicable, given the nature of the omitted case, to proceedings for impugnation of acts, the request for arbitral ruling should be summarily dismissed when it is manifest:

(...)

-That the act is uncontestable [article 89, no. 1, letter c) of the Code of Procedure in Administrative Courts];

(...).

-That lis pendens occurs or there exists res judicata [article 89, no. 1, letter i) of the Code of Procedure in Administrative Courts].

(...)"

Let us see.

6. No. 1 of the Legal Regime for Arbitration in Tax Matters provides that the jurisdiction of arbitral tribunals comprises the examination of the following claims:

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

b) The declaration of illegality of acts of determination of taxable matter when it does not give rise to the assessment of any tax, of acts of determination of taxable matter and of acts of determination of patrimonial values;"

This provision can be compared with article 97 of the Code of Procedure and Tax Process where the claims subject to the tax judicial proceeding are indicated, providing in letter a) of no. 1 that the tax judicial proceeding comprises "The impugnation of tax assessments, including parafiscal taxes and acts of self-assessment, withholding at source and payment on account".

In turn, article 95 of the General Tax Law provides that:

"1 - The interested party has the right to impugn or appeal against any act that is harmful to its rights and legally protected interests, according to the forms of procedure prescribed by law.

2 - The following can be harmful, in particular:

a) The assessment of taxes, also considering as such for the purposes of this law acts of self-assessment, withholding at source and payment on account;

(...).

7. From the regulatory framework above transcribed it results, undoubtedly, that the claim for declaration of illegality of assessment acts may be subject to, both judicial impugnation and request for arbitral ruling.

The question that arises is whether the claim for annulment of assessments limited to the second and third installments referring to the tax acts in question may be subject to a request for arbitral ruling, and it should be added that the Claimant alleged that it had already impugned the tax assessment acts and that the respective proceeding is pending in Arbitral Tribunal in the proceeding.

Apparently, the Claimant, although cautiously, sustains the understanding that each one of the installments may separately be subject to a request for arbitral ruling, referring to the tax assessment acts.

8. For the solution of this question it appears pertinent to bear in mind the concept of "tax assessment" (article 97, no. 1, letter a) of the Code of Procedure and Tax Process) or "acts of tax assessment" (article 2, no. 1, letter a) of the LRAT).

In the teaching of José Casalta Nabais "Assessment in the broad sense, that is, as the set of all operations intended to ascertain the amount of the tax, comprises: 1) The subjective assessment intended to determine or identify the taxpayer or obligor of the tax-legal relationship, 2) The objective assessment through which the taxable matter of the tax is determined and, likewise, the rate to be applied is determined, in the case of a plurality of rates, 3) Assessment in the strict sense expressed in the determination of the collection through the application of the rate to the taxable matter, and 4) the (possible) deductions from the collection."[3].

9. As follows from the notion of assessment given to us by the illustrious Professor, for each tax fact there will be, in principle, a single assessment, by which the collection to be paid will be determined. This is, moreover, what follows from article 23, no. 7 of the Stamp Duty Code by providing that "In the case of tax due 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 CIMI".

In turn, article 113, no. 2 of the CIMI, applicable by reference from that norm of the Stamp Duty Code, provides that "the assessment (...) is carried out in the months of February and March of the following year".

From the circumstance that, by force of law, the same may be paid in several installments, it does not follow, naturally, that several assessments have occurred. The assessment is only one and only it constitutes a harmful act, susceptible of being impugned that can only, evidently, be the subject of a single impugnation.

Naturally, when the law provides for the payment of the assessment amount in several installments, the annulment of the tax act will have consequences with respect to all of them, causing the obligation to pay them to cease or imposing the obligation of restitution (and possibly of compensatory interest) on the Tax and Customs Authority, in case of payment by the obligor.

10. What the law does not provide, neither in the arbitral forum, nor in the judicial impugnation proceeding is the claim for annulment of payment of installments per se, since such effect will only follow from the annulment of the tax assessment act which, as we have seen, consists of the quantification of the total amount to be paid and which is only and solely a single tax act.

11. On the other hand, the tax acts that the Claimant comes to impugn (although with reference only to the 2nd and 3rd installments), according to itself, are already impugned in another arbitral proceeding.

Thus, in light of article 89, no. 1 of the Code of Procedure in Administrative Courts (hereinafter CPTA), subsidiarily applicable (article 29, no. 1, letter c) of the LRAT), the requirements on which the summary dismissal of the petition depends manifestly occur.

In fact, the assessment acts identified in the request for arbitral ruling being already impugned in another proceeding, the exception of lis pendens is verified (letter f) of no. 1 of article 89 of the CPTA).

Should it be understood that the subject matter of the present proceeding is not the assessment acts (which is not understood to be the case since, both in the identification of the subject matter of the request for arbitral ruling and in the claim the Claimant manifests the intention to impugn and obtain the annulment of the "stamp duty assessment acts"), by the present proceeding seeking only the annulment of the second and third installments relating to such act, the conclusion could not fail to be the same, on the grounds, in this case, of uncontestability, for the reasons set out above (article 89, no. 1, letter c) of the CPTA).

III-

Thus, with the grounds indicated above, and in light of the principle of procedural economy and the unlawfulness of the practice of useless acts, the arbitral tribunal decides to summarily dismiss the request for arbitral ruling.

Value of the action: €53,987.26 (fifty-three thousand nine hundred and eighty-seven euros and twenty-six cents) pursuant to the provisions of article 306 no. 2 of the Code of Civil Procedure and article 97-A, no. 1, letter a) of the Code of Procedure and Tax Process and article 3, no. 2 of the Regulation of Costs in Arbitration Proceedings.

Costs against the Claimant in the amount of €2,142, pursuant to no. 4 of article 22 of the LRAT.

Notify.

Lisbon, CAAD, 25 May 2015

The Arbitrator

(Marcolino Pisão Pedreiro)

[1] Commentary to the Legal Regime for Arbitration in Tax Matters, in GUIDE TO TAX ARBITRATION, Coord. Nuno Villa-Lobos and Mónica Brito Vieira, 2013, Almedina, p. 202). (See JORGE LOPES DE SOUSA, Commentary to the Legal Regime for Arbitration in Tax Matters, in Guide to Tax Arbitration, Coord. Nuno Villa-Lobos and Mónica Brito Vieira, 2013, Almedina, pp. 193-194)

[2] The author further adds that "With respect to the parallel situation provided for in article 110, no. 1 of the Code of Procedure and Tax Process for the judicial impugnation proceeding, the Supreme Administrative Court has peacefully accepted the possibility of summary dismissal of judicial impugnation petitions, as can be seen from the following rulings:

Of 10-03-2005, proceeding no. 1022/04; of 25-05-2005, proceeding no. 400/2005; of 22-02-2006, proceeding no. 1253/05; of 05-04-2006, proceeding no. 1286/05; and of 27-05-2009, proceeding no. 76/09" (Op. cit. p. 194, note 90)

[3] TAX LAW, 3rd Edition, Almedina, 2005, p. 318.

Frequently Asked Questions

Automatically Created

What is lis pendens (litispendência) in Portuguese tax arbitration proceedings?
Lis pendens (litispendência) in Portuguese tax arbitration refers to the procedural exception that arises when the same tax matter is simultaneously being litigated in two separate proceedings. Under Article 89(1)(i) of the Code of Procedure in Administrative Courts, applicable subsidiarily to tax arbitration under LRAT, lis pendens constitutes grounds for summary dismissal of the subsequent claim. In Process 138/2015-T, the claimant had already challenged the same stamp tax assessments in another pending arbitral proceeding, triggering this exception. The principle prevents duplicate litigation, protects judicial economy, and avoids potentially contradictory decisions on identical tax assessments.
Can stamp tax (Imposto de Selo) liquidation acts under TGIS item 28.1 be challenged through CAAD arbitration?
Yes, stamp tax liquidation acts under TGIS item 28.1 can be challenged through CAAD arbitration. Article 2(1)(a) of the Legal Regime for Arbitration in Tax Matters (LRAT - Decree-Law 10/2011) expressly grants arbitral tribunals jurisdiction to examine claims for 'declaration of illegality of acts of assessment of taxes.' This parallels Article 97(1)(a) of the Tax Procedure Code (CPPT), which provides for judicial impugnation of tax assessments. Stamp duty assessments fall squarely within the category of contestable tax acts under both judicial and arbitral routes, giving taxpayers the choice of forum for challenging stamp tax under item 28.1 of the General Table.
When can a CAAD arbitral tribunal issue a preliminary rejection (indeferimento liminar) of a tax claim?
A CAAD arbitral tribunal can issue a preliminary rejection (indeferimento liminar) based on Article 89 of the Code of Procedure in Administrative Courts, applied subsidiarily to tax arbitration. Summary dismissal is grounded in the principle of procedural economy and the prohibition of useless acts. Specific grounds include: (c) when the act is uncontestable; and (i) when lis pendens or res judicata exists. In Process 138/2015-T, the tribunal considered summary dismissal both because the claimant attempted to challenge only individual payment installments rather than the complete assessment act, and because the same assessment was already being contested in another pending arbitral proceeding, constituting lis pendens.
What happens when the same tax liquidation is contested in two separate arbitral proceedings?
When the same tax liquidation is contested in two separate arbitral proceedings, the exception of lis pendens applies, requiring summary dismissal of the second proceeding. As established in Decision 138/2015-T, Article 89(1)(i) of the Code of Procedure in Administrative Courts mandates dismissal when lis pendens occurs. The first-filed proceeding takes precedence, and the subsequent claim must be rejected to avoid duplicate litigation, prevent waste of judicial resources, and eliminate the risk of contradictory decisions. This rule reflects fundamental procedural principles applicable to tax arbitration under LRAT, ensuring orderly and efficient resolution of tax disputes while protecting both taxpayer rights and administrative efficiency.
How does the principle of procedural economy apply to duplicate stamp tax arbitration requests?
The principle of procedural economy in duplicate stamp tax arbitration requests prohibits useless acts and requires efficient use of judicial resources. In Decision 138/2015-T, the tribunal applied this principle by considering summary dismissal when the claimant filed a second arbitral proceeding challenging the same stamp tax assessment already contested in a pending proceeding. Citing Jorge Lopes de Sousa, the decision emphasized that procedural economy reaches maximum expression in preventing redundant litigation. Summary dismissal serves this principle by immediately terminating proceedings that would waste tribunal resources, duplicate work already underway, and potentially generate conflicting decisions on identical tax acts, thereby protecting the integrity and efficiency of the tax arbitration system.