Process: 327/2018-T

Date: December 12, 2018

Tax Type: IMI

Source: Original CAAD Decision

Summary

This CAAD arbitral decision (Process 327/2018-T) addressed a housing cooperative's challenge to Municipal Property Tax (IMI) assessments for 2015 and 2016, totaling €7,602.03. The cooperative, A..., claimed entitlement to IMI exemption under Article 66-A(9) of the Tax Benefits Statute (EBF) for properties held in superficies rights. However, the arbitral tribunal never reached the merits of the exemption claim. The Tax Authority raised a preliminary objection based on the untimeliness of the arbitration request. The tribunal found that the cooperative filed its request on July 10, 2018, well beyond the 90-day deadline established in Article 10(1) of RJAT. This deadline runs from the end of the voluntary payment period: May 31, 2016 for the 2015 assessment and November 30, 2017 for the 2016 assessment. Although the cooperative had filed administrative review requests that were denied on April 5, 2018, the tribunal clarified that the deadline must be calculated from the original assessment acts, not from the denial of administrative reviews. The cooperative's arbitration request challenged the underlying IMI assessments themselves, not the administrative review decisions, which are distinct legal acts. Consequently, the tribunal dismissed the case due to expiration of the right of action under Article 287(1)(e) of the Civil Procedure Code. The cooperative was ordered to pay procedural costs of €612. This decision emphasizes the critical importance of strict compliance with filing deadlines in Portuguese tax arbitration, even when taxpayers pursue administrative remedies first.

Full Decision

ARBITRAL DECISION

REPORT

A..., taxpayer no. ..., with registered office at Street..., no. ... to ..., ...-... ... (Claimant), filed on 10/07/2018, a request for arbitral determination, in which it petitions for the annulment of the assessment acts for Municipal Property Tax (IMI), relating to 2015 and 2016, in the total amount of € 7,602.03.

The Honorable President of the Ethics Council of the Centre for Administrative Arbitration (CAAD) designated, on 23/07/2018, the signatory of this decision as sole arbitrator.

On 19/09/2018, the arbitral tribunal was constituted.

In compliance with the provisions of article 17, paragraph 1, of the Legal Framework for Tax Arbitration (RJAT), the Tax and Customs Authority (AT) was notified on 19/09/2018, to, if it so wishes, submit a response and request the production of additional evidence.

On 25/10/2018, the AT responded, raising the untimeliness of the request for arbitral determination, by way of exception and by objection.

On 09/11/2018, by arbitral order, this arbitral tribunal decided to waive the holding of the meeting provided for in article 18 of the RJAT, inviting both parties to, if they so wish, submit optional written submissions and scheduled the date for rendering the final decision.

The Claimant and the AT did not submit optional written submissions.

PRELIMINARY EXAMINATION

The arbitral tribunal was duly constituted.

The parties possess legal personality and capacity and are entitled to bring proceedings, with no defects in representation occurring.

The proceedings do not suffer from defects affecting their validity.

Consequently, the conditions are met for the final decision to be rendered.

FACTUAL MATTER

FACTS CONSIDERED PROVED

In light of the documents submitted to the proceedings, the following are considered proved:

The Claimant is a housing cooperative whose principal purpose is the construction, promotion, and acquisition of dwelling units for the housing of its members.

In accordance with article 4 of its Statutes, the Claimant's purpose is, through the cooperation and mutual aid of its members, the satisfaction, without profit motive, of their housing needs and, furthermore, the promotion of culture in general and of the principles and practice of cooperativism.

The Claimant is the holder of full property rights over urban properties located at ..., in the Union of Parishes of ... and ..., in …, registered in the respective urban property register, under articles ..., ..., ... and ....

The IMI assessment acts no. 2015 ... and no. 2016 ..., in the amount of, respectively, € 3,340.29 and € 4,261.74, were levied on the aforementioned urban properties in right of superficies.

The aforementioned assessment acts were subject to administrative review requests, both of which were dismissed by orders dated 05/04/2018, notified by letters dated 06/04/2018.

The Claimant filed, on 10/07/2018, the request for arbitral determination at issue.

FACTS NOT CONSIDERED PROVED

There are no facts relevant to the decision that have not been considered proved.

PRELIMINARY ISSUE FOR DECISION

Pursuant to the provisions of article 10, paragraph 1, of the RJAT, the time limit for filing the request for constitution of the arbitral tribunal is 90 days counted from the facts provided for in article 102, paragraph 1 and 2, of the CPPT, in the case at hand, the end of the period for voluntary payment of tax installments legally notified to the taxpayer.

Now, the payment date for the sole IMI installment of the year 2015 ended on 31/05/2016 and the payment deadline for the third and final installment of the IMI assessment of the year 2016 is 30/11/2017.

In fact, in the case at hand, the present arbitral request was filed on 10/07/2018, that is to say, well beyond the time limit referred to in article 10, paragraph 1, of the RJAT.

It is true that the Claimant filed administrative review requests against the IMI assessments of the years 2015 and 2016, which received, respectively, no. ...2016... and no. ...2017..., and that both were dismissed by orders dated 05/04/2018, notified by letters dated 06/04/2018.

However, as follows from the content of the request formulated by the Claimant, that "the illegality be declared and the consequent annulment of the acts of assessment of Municipal Property Tax, with the legal consequences thereof," the object of the present request for arbitral determination is the declaration of illegality and annulment of the IMI assessment acts of the years 2015 and 2016, and not the acts dismissing the administrative review requests, which constitute different acts in content, form, and legal requirements.

In that regard, the timeliness of the request for arbitral determination is assessed in relation to the assessment acts, and it is found that the same is manifestly untimely.

In fact, the dilatory exception of expiration of the right of action determines the dismissal of the action by the AT, under the terms of article 89, paragraph 1, subparagraph h) of the Code of Administrative Procedure in Courts (CPTA) and subparagraph e) of paragraph 1 of article 287 of the Code of Civil Procedure (CPC).

DECISION

On the grounds set out, the arbitral tribunal decides:

To declare the action extinguished by expiration of the right of action, pursuant to article 287, paragraph 1, subparagraph e) of the CPC (applicable by virtue of the referral provided for in article 2 of the RJAT), with the consequences arising therefrom;

To condemn the Claimant to pay the costs of proceedings.

VALUE OF PROCEEDINGS

The value of the proceedings is fixed at € 7,602.03 (seven thousand, six hundred and two euros and three cents), pursuant to article 97-A of the Code of Tax Procedure and Process (CPPT), applicable by virtue of subparagraphs a) and b) of paragraph 1 of article 29 of the RJAT and paragraph 2 of article 3 of the Regulation of Costs in Tax Arbitration Proceedings (RCPAT).

COSTS

Costs to be borne by the Claimant, in the amount of € 612 (six hundred and twelve euros), pursuant to Table I of the Regulation of Costs in Tax Arbitration Proceedings, pursuant to paragraph 2 of article 22 of the RJAT.

Notify.

Lisbon, 12 December 2018

The Arbitrator,

(Hélder Filipe Faustino)

Text prepared by computer, pursuant to the provisions of paragraph 5 of article 131 of the CPC, applicable by referral of subparagraph e) of paragraph 1 of article 29 of the RJAT. The wording of the present decision is governed by the orthography prior to the 1990 Orthographic Agreement.

Frequently Asked Questions

Automatically Created

Are housing cooperatives exempt from IMI under Article 66-A(9) of the Tax Benefits Statute (EBF)?
The decision does not address the substantive question of whether housing cooperatives qualify for IMI exemption under Article 66-A(9) EBF, as the case was dismissed on procedural grounds before reaching the merits. Article 66-A(9) EBF potentially provides IMI exemptions for cooperatives, but specific requirements regarding the cooperative's activities, property use, and compliance with cooperative principles must be met. The cooperative would need to demonstrate that properties are used exclusively for members' housing without profit motive.
Can a cooperative challenge IMI tax assessments through CAAD tax arbitration proceedings?
Yes, cooperatives can challenge IMI assessments through CAAD arbitration proceedings, but must strictly comply with the 90-day filing deadline established in Article 10(1) RJAT. This deadline runs from the end of the voluntary payment period for the tax, not from subsequent administrative review decisions. In this case, the cooperative's request was dismissed as untimely because it was filed beyond the statutory deadline, demonstrating that procedural compliance is essential for accessing tax arbitration.
What are the requirements for cooperatives to qualify for IMI property tax exemptions in Portugal?
While this decision did not rule on the substantive requirements, Article 66-A(9) EBF exemptions for cooperatives generally require: (1) formal recognition as a housing cooperative; (2) properties used exclusively for members' housing needs; (3) operation without profit motive; (4) compliance with cooperative principles of mutual aid and cooperation; and (5) proper registration and compliance with cooperative legislation. The cooperative must demonstrate that properties serve the statutory cooperative purpose rather than commercial objectives.
What is the deadline for filing a request for arbitral pronouncement (pedido de pronúncia arbitral) after a tax claim is denied?
The deadline for filing a request for arbitral pronouncement (pedido de pronúncia arbitral) at CAAD is 90 days under Article 10(1) RJAT, calculated from the facts in Article 102(1) and (2) CPPT—typically the end of the voluntary payment period. Critically, this tribunal clarified that when challenging the underlying tax assessment (rather than the denial decision itself), the deadline runs from the original assessment, not from notification of administrative review denial. Filing administrative reviews does not extend or reset this deadline for arbitration purposes.
How does the CAAD arbitral tribunal handle IMI liquidation disputes involving cooperative property ownership?
The CAAD arbitral tribunal handles IMI disputes involving cooperatives by first examining procedural requirements, including timeliness, legal standing, and proper identification of the challenged acts. The tribunal distinguishes between challenging original IMI assessment acts versus challenging administrative review decisions, as these are separate acts with different legal requirements and deadlines. When cooperatives hold property rights in superficies (surface rights), IMI assessments on those rights can be challenged, but strict procedural compliance is mandatory for the tribunal to reach substantive issues like cooperative exemptions under the EBF.