Process: 356/2014-T

Date: February 3, 2015

Tax Type: Selo

Source: Original CAAD Decision

Summary

This arbitral decision addresses whether Stamp Tax (Imposto do Selo) under Verba 28.1 of the General Stamp Tax Table (TGIS), introduced by Law 55-A/2012, applies to construction land (terrenos para construção) valued over €1,000,000. The claimant challenged a 2012 Stamp Tax assessment of €10,965.74 on a construction plot, arguing that land without actual residential buildings cannot be classified as 'properties with residential designation' under Verba 28.1. The taxpayer also contested the notification's validity for lack of proper reasoning under Article 36 TPPC. The Tax Authority raised a preliminary defense of untimeliness, asserting the arbitration request filed on 28.04.2014 exceeded the 90-day deadline under Article 10 of the Legal Framework for Tax Arbitration (LFTA), counted from November 2013 when the voluntary payment period ended. The Authority argued construction land has residential designation based on Municipal Property Tax Code (CIMI) definitions, which apply coefficients for residential designation when valuing construction plots. The case presents critical issues regarding: (1) whether construction land falls within Verba 28.1's scope; (2) procedural timeliness for arbitration requests; (3) arbitral tribunal jurisdiction over notification validity; and (4) the interaction between Stamp Tax Code and CIMI definitions for determining property designation. The tribunal must determine if the 90-day deadline was met and whether construction plots constitute taxable properties under the residential luxury tax provisions introduced in 2012.

Full Decision

ARBITRAL DECISION[1]

  1.  Report

A – General

1.1. A…, S.A., a company with registered office …, in Lisbon, bearing the single registration number and collective person number … (hereinafter referred to as the "Claimant"), filed, on 28.04.2014, a request for constitution of an arbitral tribunal in tax matters, seeking, as appears to this arbitral tribunal, the annulment of the assessment of Stamp Tax no. …, relating to 2012, in the amount of € 10,965.74 (ten thousand nine hundred and sixty-five euros and seventy-four cents), concerning a plot of land for construction of which it is the owner, registered in the urban property register under article U-… of the parish of …, municipality of ...

1.2. The Claimant, however, attached to its request a copy of the postal citation dated 26.01.2014, relating to the tax enforcement proceeding no. …, which is based on the non-payment of the aforementioned Stamp Tax assessment.

1.3. The said assessment, a copy of which was annexed to the Response of the Tax and Customs Authority, was based on article 1st of the Stamp Tax Code (hereinafter the "STC") and on item 28.1 of the respective General Table (the "TGIS"), amended by article 4th of Law no. 55-A/2012, of 29 October, and was duly notified to the Claimant.

1.4. Pursuant to the provisions of subparagraph a) of paragraph 2 of article 6th and subparagraph b) of paragraph 1 of article 11th of Decree-Law no. 10/2011, of 20 January, in the wording given to it by article 228th of Law no. 66-B/2012, of 31 December, the Deontological Council of the Administrative Arbitration Centre appointed Nuno Pombo as arbitrator, and the parties, once properly notified, did not express any objection to such appointment.

1.5. By order of 05.05.2014, the Tax and Customs Authority (hereinafter referred to as the "Respondent") proceeded with the appointment of Dr. … to intervene in the present arbitral proceedings, in the name and representation of the Respondent.

1.6. In accordance with the provisions of subparagraph c) of paragraph 1 of article 11th of Decree-Law no. 10/2011, of 20 January, in the wording given to it by article 228th of Law no. 66-B/2012, of 31 December, the arbitral tribunal was constituted on 02.07.2014.

1.7. On the same day 02.07.2014 the arbitral tribunal issued an order to the effect that the highest officer of the Respondent's service be notified, within a period of 30 days, to attach to the file the administrative proceedings that may exist and, if so desired, to file a response and request the production of additional evidence, and such order was notified on 07.07.2014.

1.8. On 24.09.2014 the Respondent filed its response.

B – Position of the Claimant

1.9. The Claimant begins by raising a preliminary issue, that of the validity of the notification, due to lack of substantiation, since it does not comply with what is provided for in article 36th of the Tax Procedure and Process Code (hereinafter "TPPC"), asserting that it did not even have knowledge thereof.

1.10. The Claimant considers that "the act of a tax matter is duly substantiated when it contains the decision, its grounds and means of defence and a period to react against the notified act, as well as the indication of the entity that performed it and whether it did so in the use of delegation or sub-delegation of powers", which is not the case in the instant proceedings.

1.11. The Claimant bases its request on what it calls an "error of law regarding the facts", arguing, in summary, that as long as there are no buildings on the plots of land for construction that are capable of being used for habitation, "they are not covered by the tax act in question".

1.12. The Claimant therefore submits that plots of land for construction cannot be subsumed within the concept of "properties with residential designation" and, consequently, are not included within the scope of objective application of item 28.1 of the TGIS, since this item cannot be applied to urban properties that do not have an actual and real residential designation.

1.13. The Claimant further argues that item 28.1 of the TGIS, in seeking to tax "ownership of properties with residential designation of a value exceeding € 1,000,000.00, even in cases where such does not correspond to a manifestation of luxury on the part of their owners, but only to the mere development of their economic activity, is unconstitutional for violation of articles 13th, 81st, 86th, 87th, 104th and 266th" of the Constitution of the Portuguese Republic.

C – Position of the Respondent

1.14. The Respondent, in turn, recalls that at issue is an act of assessment of Stamp Tax relating to 2012, whose voluntary payment deadline ended in November 2013, which was notified to the Claimant through the so-called VIACTT before the end of that same deadline.

1.15. Given that article 10th of the Legal Framework for Tax Arbitration provides for a period of 90 (ninety) days for the submission of the request for constitution of an arbitral tribunal, computed according to article 279th of the Civil Code, it must be concluded that the said request is untimely.

1.16. By way of contestation, the Respondent argues that the plot of land for construction at issue has the "legal nature of a property with residential designation", and consequently contends for the maintenance of the assessment act that is the subject of the request for arbitral determination.

1.17. The Respondent's position results from the fact that there is, under Stamp Tax, no definition of the concepts of "urban property", "plot of land for construction" and "residential designation", which necessitates recourse to the Municipal Property Tax Code (the "MPTC"), in accordance with the provisions of paragraph 2 of article 67th of the STC, in the wording given to it by Law no. 55-A/2012, of 29 October, from which it necessarily follows that the notion of designation of an urban property "is based on the section relating to the valuation of immovable property" and that "if for purposes of determining the patrimonial value for tax purposes of plots of land for construction it is clear that the coefficient of designation applies in valuation, then "its consideration for purposes of applying item 28 of the TGIS cannot be ignored".

D – Conclusion of the Report

1.18. Given that the Respondent argued that the question submitted for the arbitral tribunal's consideration is a strictly legal question, it considered there to be no need for the production of additional evidence. Accordingly, the arbitral tribunal proposed that the meeting provided for in article 18th of the Legal Framework for Tax Arbitration (LFTA) be waived, and in the absence of opposition by the Claimant, by order of 26.11.2014, it considered there to be no procedural utility in holding the said meeting, since the parties had already submitted to the proceedings the elements of fact necessary and sufficient for the issuance of the decision, which was expected to take place by 31.12.2014.

1.19. By order of 22.12.2014, the arbitral tribunal invited the Claimant to comment on the exception of untimeliness raised by the Respondent, and also extended the period for the issuance of the arbitral decision, which was expected to be issued by 03.02.2015.

1.20. On 12.01.2015 the Claimant submitted written comments on the aforementioned exception of untimeliness, and took the opportunity to submit its arguments.

1.21. Regarding the exception of untimeliness, the Claimant argued that the deadline for payment was 28.02.2014, as can be seen in the document on which it bases its request and which is, in essence, the postal citation for the payment of a debt in coercive collection.

1.22. As the said document offers a payment deadline with the end date of 28.02.2014, only "after that date and in the face of the failure to voluntarily pay the tax, would the proceedings continue for its further processing, namely with the carrying out of attachments", or, in the Claimant's interpretation, the deadline for voluntary payment would have the end date of 28.02.2014.

1.23. Even if otherwise understood, the Claimant considers that it would be necessary for the arbitral tribunal to take the request for constitution of the arbitral tribunal as opportune and timely, given that subparagraphs b), e) and f) [and perhaps c)] of article 102nd of the TPPC were satisfied.

1.24. The Claimant further adds that the Respondent's Response should have been filed by 22.09.2014 and was only filed on 25.09.2014, wherefore "it should be declared to have not been filed in its entirety".

1.25. The arbitral tribunal, by order of 19.01.2015, invited the Respondent to submit its arguments, which were not submitted.

1.26. The Parties enjoy legal personality and legal capacity and have standing pursuant to article 4th and paragraph 2 of article 10th of the Legal Framework for Tax Arbitration (LFTA), and article 1st of Ordinance no. 112-A/2011, of 22 March.

1.27. The proceedings do not suffer from any nullity, and the Respondent raised the exception of untimeliness of the request for constitution of the arbitral tribunal, which must be immediately considered, since the decision taken on it may preclude further considerations regarding the merits of the case.

  1.  Factual Matters

2.1. Proven Facts

2.1.1. The Claimant is the sole owner of the urban property registered in the property register of the parish of …, municipality of Loures, under article ... (the "Property") (document attached with the Respondent's Response and document no. 1 attached with the Claimant's arguments, whose contents are hereby reproduced).

2.1.2. The Property is described as a plot of land for construction (documents no. 1 attached with the Claimant's arguments).

2.1.3. The Property was assigned a patrimonial value for tax purposes of € 3,289,723.55 (document presented with the Respondent's Response).

2.1.4. For purposes of determining its patrimonial value for tax purposes, the Property was given residential designation (understanding of both Parties).

2.1.5. The Claimant was notified of the tax assessment act of Stamp Tax no. …, in the total amount of € 10,965.74, before the deadline for payment, which was the end of November 2013 (document no. 2 attached with the Respondent's Response, whose contents are hereby reproduced).

2.1.6. The Claimant did not proceed with the voluntary payment of the tax that was being demanded of it (it is concluded from the existence of a tax enforcement proceeding).

2.1.7. Due to the failure to voluntarily pay the tax that was being demanded of the Claimant, the Respondent initiated a tax enforcement proceeding against it, which proceeded under number …, the postal citation thereof, dated 26.01.2014, which the Claimant received, and which gave rise to the present arbitral proceedings.

2.2. Unproven Facts

There are no facts relevant to the consideration of the merits of the case that have been found to be unproven.

  1.  Legal Matters

a) Preliminary Issue – the exception of untimeliness of the request for arbitral determination

The first issue that must be resolved, because it renders unnecessary any other considerations regarding the merits of the case, is that of the possible untimeliness of the request for arbitral determination.

As stated, the Respondent, in its Response, raises the exception of untimeliness of the request for arbitral determination. The Claimant, however, argues that such pleading, having been filed on 25.09.2014 (in fact, it was the day before, but this imprecision is not material in this case) and not on 22.09.2014, should be declared to have not been filed in its entirety.

Now, this exception of untimeliness is subject to ex officio consideration [cf. subparagraph h) of paragraph 1 of article 89th of the Code of Procedure in Administrative Courts, applicable subsidiarily pursuant to subparagraph e) of paragraph 1 of article 29th of the LFTA], for which reason, regardless of whether the Respondent's Response is deemed to have been filed or not, the arbitral tribunal considers it must pronounce on the said exception.

b) Period for Submission of the Request for Arbitral Determination

In article 10th, paragraph 1 of the LFTA, the periods for submission of the request for constitution of the arbitral tribunal are established. They are:

(i) 90 days counted from the facts provided for in paragraphs 1 and 2 of article 102nd of the TPPC, regarding acts susceptible to independent contestation and, as well, from the notification of the decision or the expiration of the legal period for the hierarchical appeal; and

(ii) 30 days counted from the notification of the acts provided for in subparagraphs b) and c) of article 2nd of the LFTA, in the remaining cases.

Subparagraph a) of paragraph 1 of article 102nd of the TPPC refers to the expiration of the period for voluntary payment of tax payments legally notified to the taxpayer. Now, it must be acknowledged that the period for voluntary payment of the tax demanded of the Claimant expired at the end of November 2013. Therefore, counting from the expiration of that period, 30 November 2013, the Claimant would have 90 days within which to request the constitution of the arbitral tribunal. Given that this request was made only on 28.04.2014, its untimeliness is thereby demonstrated.

The argument put forth by the Claimant that the voluntary payment of the said tax would have as its limit the date of 28.02.2014 does not hold. And it does not hold because precisely the document that expresses that payment deadline is already a postal citation, through which the Respondent informs the Claimant that a tax enforcement proceeding has been instituted against it, the debt being enforced being the tax collection that was not voluntarily satisfied. Hence, to this tax debt are added the amounts relating to default interest and costs, which are only justified by the failure to make the voluntary payment to which the law refers, within the period also established by law.

Moreover, the very document to which we have referred expressly mentions that it concerns "coercive collection". Now, if collection is coercive, it cannot at the same time be voluntary. Even if the taxpayer accepts the payment of the enforced debt in the coercive collection phase, the taxpayer will never be satisfying, voluntarily and in a timely manner, the tax credit. Such voluntariness presupposes, prima facie, the performance of an obligation within the period legally established. Given that the period for payment of the tax expired on 30 November 2013, the Claimant cannot argue that, after that date, and already in the context of an enforcement proceeding intended to collect that which was not paid in a timely manner, the period for its voluntary payment is still running. This conclusion, unless I am mistaken, is necessary even when the tax enforcement officer sets a period for payment (and now not only of the tax, but also of the respective interest and costs), in order to bring the enforcement to an end and, at the same time, avoid the adverse consequences that could result from its continuation.

Therefore, the tribunal does not find that subparagraph a) of paragraph 1 of article 102nd of the TPPC is satisfied.

However, as we have seen, the Claimant contends that the timeliness of the request presented will in any case be evident in light of what subparagraphs b), e) and f) of the same provision provide. It is worth revisiting them:

Article 102nd
Judicial Contestation. Period for Submission

1 - Contestation shall be submitted within a period of three months counted from the following facts:

(…)

b) Notification of the remaining tax acts, even when they do not give rise to any assessment;

(…)

e) Notification of the remaining acts that may be the subject of independent contestation pursuant to this Code;

f) Knowledge of acts prejudicial to legally protected interests not covered in the previous subparagraphs.

Let us recall that the Claimant bases its request on the aforementioned postal citation, with the identification of the debt being enforced, in the coercive collection phase. This document is dated 26.01.2014 and the Claimant's request is of 28.04.2014, that is, between one and the other dates there are 91 days. But even if 90 days had not elapsed, it would always have to be concluded that the postal citation is part of a tax enforcement proceeding, previously instituted and which is made known to the person against whom enforcement is sought.

Unless I am mistaken, it is excluded from the scope of competence of arbitral tribunals to consider disputes arising from tax enforcement proceedings.

It is paragraph 1 of article 2nd of the LFTA that defines the competence of arbitral tribunals.

Article 2nd
Competence of Arbitral Tribunals and Applicable Law

1 - The competence of arbitral tribunals comprises the consideration of the following claims:

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

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

As is clear to see, the requests that may be submitted for the consideration of arbitral tribunals are only those that are related to the legality of assessment acts and of acts that determine the taxable matter. Therefore, arbitrability is not recognized for acts performed within the scope of a tax enforcement proceeding. Accordingly, the arbitral tribunal cannot consider the request for arbitral determination if it concerns not the assessment act of Stamp Tax whose voluntary payment deadline expired on 30.11.2013 but rather the citation of the tax enforcement proceeding that resulted from the failure to voluntarily pay that same tax.

  1.  Decision

Pursuant to the foregoing terms and grounds, the arbitral tribunal decides:

a) To declare the request for arbitral determination seeking the annulment of the Stamp Tax assessment claimed herein to be untimely;

b) To declare itself incompetent to consider the request for arbitral determination if it has as its object an act relating to the tax enforcement proceeding no. …, instituted by the Respondent against the Claimant.

  1.  Value of the Proceedings

In accordance with the provisions of paragraph 2 of article 315th of the Code of Civil Procedure, subparagraph a) of paragraph 1 of article 97th-A of the TPPC and also paragraph 2 of article 3rd of the Regulation of Costs in Tax Arbitration Proceedings, the value of the proceedings is fixed at € 10,965.74.

  1.  Costs

For the purposes of the provisions of paragraph 2 of article 12 and paragraph 4 of article 22nd of the LFTA and paragraph 4 of article 4th of the Regulation of Costs in Tax Arbitration Proceedings, the amount of costs is fixed at € 918.00, pursuant to Table I annexed to the said Regulation, to be borne in full by the Claimant.

Lisbon, 3 February 2015

The Arbitrator

(Nuno Pombo)

		[1] The drafting of this arbitral decision does not comply with the new Orthographic Agreement

Frequently Asked Questions

Automatically Created

Is Stamp Tax (Imposto do Selo) applicable to construction land (terrenos para construção) under Verba 28.1 of the TGIS?
O Imposto do Selo é potencialmente aplicável a terrenos para construção ao abrigo da Verba 28.1 da TGIS se o seu valor patrimonial tributário exceder €1.000.000. A questão central é se terrenos para construção se qualificam como 'prédios de natureza habitacional'. A Autoridade Tributária defende que sim, com base no artigo 67.º, n.º 2 do Código do Imposto do Selo (na redação da Lei 55-A/2012), que remete para o Código do IMI, onde os terrenos para construção são avaliados aplicando-se coeficientes de afetação habitacional. O contribuinte argumenta que apenas prédios com edifícios efetivamente destinados a habitação devem ser tributados, não terrenos sem construção. A decisão depende da interpretação da expressão 'prédios de natureza habitacional' e da aplicabilidade das definições do CIMI ao Imposto do Selo.
What are the time limits for filing an arbitration request (pedido de pronúncia arbitral) to challenge a Stamp Tax assessment?
O prazo para apresentar pedido de pronúncia arbitral contra uma liquidação de Imposto do Selo é de 90 dias, conforme o artigo 10.º do Regime Jurídico da Arbitragem em Matéria Tributária (RJAT). Este prazo conta-se nos termos do artigo 279.º do Código Civil. A contagem inicia-se a partir da notificação da liquidação ou, no caso de imposto autoliquidado, do termo do prazo de pagamento voluntário. No presente caso, a Autoridade Tributária alegou intempestividade porque o pedido foi apresentado em 28.04.2014, quando o prazo de pagamento voluntário terminou em novembro de 2013, ultrapassando largamente os 90 dias legais. A tempestividade do pedido é condição essencial para a competência do tribunal arbitral apreciar o mérito da causa.
Can an arbitral tribunal rule on the validity of a Stamp Tax notification for lack of proper reasoning (fundamentação)?
A competência do tribunal arbitral para apreciar vícios de notificação por falta de fundamentação é limitada e discutível. Embora o contribuinte tenha suscitado questão prévia sobre a validade da notificação por alegada falta de fundamentação nos termos do artigo 36.º do CPPT, esta questão insere-se na apreciação da legalidade do ato tributário. Os tribunais arbitrais têm competência para anular atos tributários quando ilegais, incluindo por vícios de forma. Contudo, se a notificação foi efetivamente realizada e o contribuinte dela teve conhecimento (como aparenta pelo facto de ter impugnado o ato), a questão pode ser relegada para segundo plano, especialmente se o pedido for considerado intempestivo. A fundamentação da notificação e do ato de liquidação são requisitos distintos que devem ser analisados separadamente.
What happens if a taxpayer submits an untimely arbitration request against a Stamp Tax liquidation on construction plots?
Se o pedido de pronúncia arbitral for apresentado intempestivamente, o tribunal arbitral não tem competência para conhecer do mérito da causa, devendo absolver a Autoridade Tributária da instância. A intempestividade é uma exceção dilatória que obsta ao conhecimento do objeto do pedido. No caso concreto, a Autoridade Tributária arguiu que o pedido apresentado em 28.04.2014 é intempestivo face ao prazo de 90 dias contado desde novembro de 2013 (fim do prazo de pagamento voluntário). O tribunal arbitral convidou o requerente a pronunciar-se sobre esta exceção por despacho de 22.12.2014. Se confirmada a intempestividade, o processo será extinto sem apreciação do mérito, mantendo-se válida a liquidação de Imposto do Selo. O contribuinte argumentou que o prazo seria 28.02.2014, conforme citação postal em processo de execução fiscal.
Does the arbitral tribunal have jurisdiction to assess Stamp Tax disputes involving Verba 28.1 introduced by Lei n.º 55-A/2012?
O tribunal arbitral tem competência material para apreciar litígios relativos ao Imposto do Selo decorrente da aplicação da Verba 28.1 da TGIS, introduzida pela Lei n.º 55-A/2012, desde que cumpridos os requisitos procedimentais. A competência dos tribunais arbitrais em matéria tributária está definida no artigo 2.º do RJAT e abrange a apreciação da legalidade de atos de liquidação de tributos, incluindo o Imposto do Selo. A Verba 28.1, que incide sobre a titularidade de prédios de valor superior a €1.000.000, não está excluída da arbitragem tributária. Contudo, a competência está condicionada à tempestividade do pedido e ao respeito pelos pressupostos processuais. No caso, a questão da competência confunde-se com a da intempestividade: se o pedido foi apresentado fora do prazo legal de 90 dias, o tribunal carece de competência para conhecer do mérito, independentemente da complexidade ou novidade das questões jurídicas suscitadas.