ARBITRATION DECISION

CAAD: Tax Arbitration

Case No. 359/2014 – T

Subject Matter: Stamp Duty – Item 28.1 of the General Stamp Duty Table – Land for Construction

Claimant/Petitioner: A… IMOBILIÁRIA PORTUGAL, S.A.

Respondent: Tax Authority and Customs Authority (hereinafter ATA)

1. Report

On 24-04-2014, the public limited company A… IMOBILIÁRIA PORTUGAL, S.A., legal entity number …, with registered office at …, hereinafter referred to as the Petitioner, submitted to the Administrative Arbitration Centre (CAAD) a request for constitution of an arbitral tribunal with a view to annulling the tax act for assessment of Stamp Duty, from the year 2012, under item no. 28 of the General Stamp Duty Table (TGIS), relating to land for construction.

The Petitioner alleges that the property to which the Stamp Duty assessment refers is land for construction, and therefore, does not have a residential allocation for purposes of the taxation provided for in item 28.1 of the General Stamp Duty Table (TGIS).

The Petitioner further alleges that the assessment in question does not contain the proper substantiation required by law, makes an incorrect interpretation of Article 1, No. 1 of the Stamp Duty Code and of item 28.1 of the TGIS as well as Article 6, No. 1, paragraph f) of Law No. 55-A/2012 of 29-10, and violates the principles of legality, justice, equality, impartiality, priority obligations of the State, private initiative, economic activity and foreign investments, as set out in Articles 13, 81, 86, 87, 104 and 266 of the Constitution of the Portuguese Republic.

A sole arbitrator was appointed on 17-06-2014: Suzana Fernandes da Costa.

In accordance with the provisions of Article 11, No. 1, paragraph c) of RJAT, the singular arbitral tribunal was constituted on 02-07-2014.

The Tax Authority and Customs Authority submitted a response on 24-09-2014, beginning by alleging that the request was untimely, since the time limit for filing a request for arbitral pronouncement is 90 days from the expiration of the voluntary payment period of the tax.

The ATA further contends that the request for declaration of illegality and consequent annulment of the disputed assessment should be judged to be without merit, since the assessment in question constitutes a correct interpretation of item 28.1 of the General Stamp Duty Table, given that the aforementioned property has the legal nature of a property with residential allocation. The ATA also states in its response that it does not appear necessary to hear the witnesses.

On 08-10-2014, the Petitioner requested the attachment to the file of a petition, which, by order of 10-10-2014, the tribunal decided not to admit.

In the same order, the meeting provided for in Article 18 of RJAT was scheduled for 19-11-2014 at 14:30 hours.

On 15-10-2014, the Petitioner's counsel requested postponement of the meeting, as he was prevented on 19-11-2014. And on 29-10-2014 a new date for the meeting was scheduled: 05-12-2014 at 14:30 hours.

On 04-12-2014 the ATA informed that the legal counsel who would represent it could not attend the meeting, stating that it did not object to holding the same, and attached the decision issued in case no. …/2014-T, in which the company A… Imobiliária Portugal, S.A. is also the Petitioner and in which the circumstances would appear to be entirely identical to those of the present case.

On 05-12-2014 the meeting provided for in Article 18 of RJAT took place, in which the representative of the Petitioner pronounced on the exception invoked by the Respondent in its response, and informed the tribunal of the points on which the two witnesses would pronounce.

It was decided to notify the Respondent to pronounce within 5 days on whether it would maintain its position regarding the conduct of the witness examination and to proceed with the attachment of the administrative proceeding. The date of 02-01-2015 was also set for the purposes of rendering the arbitral decision.

On 30-12-2014, an order was issued rejecting witness evidence, granting a period of 10 days for the parties to submit their written submissions, and extending by one month the time limit for issuing the decision.

On 05-01-2015, the ATA informed that it had not been notified of the minutes of the meeting held and requested such notification. After notification of the minutes of the meeting to the Respondent was effected on 08-01-2015, it was decided, by order of 12-01-2015, to set aside the order of 30-12-2014, except for the extension of the time limit for the decision.

On 12-01-2015 the Petitioner requested the attachment to the file of a petition, in which it again alleged the timeliness of its arbitral request and the untimeliness of the ATA's response and submitted its submissions.

On 13-01-2015, the ATA by petition informed the file that it was not attaching any document as an administrative proceeding, as it had already attached to the file the Stamp Duty assessment in question and proof of its notification to the Petitioner.

On 15-01-2015 an order was issued ordering notification of the Petitioner to submit new submissions or to inform the file if it intended to make use of the submissions already sent. The order also ordered subsequent notification of the Respondent to submit its submissions within 10 days. In this order, the production of witness evidence was also rejected, since the points indicated by the Petitioner would be conclusive and/or would contain matters of law.

The Petitioner pronounced on 26-01-2015, informing that it intended to make use of the submissions already attached to the file. On the same date, the Petitioner sent a petition requesting notification of the ATA to attach the administrative proceeding.

On 27-01-2015 an order was issued ordering notification of the ATA to attach the administrative proceeding within 10 days, and it was also decided to extend by a further month the time limit for rendering the decision.

The AT attached the administrative proceeding to the file on 12-02-2015.

The tribunal is materially competent and is regularly constituted in accordance with RJAT.

The parties possess legal personality and capacity and are legitimate (Articles 4 and 10, No. 1 and 2 of RJAT and Article 1 of Ordinance No. 112-A/2011 of 22 March).

The proceeding is not affected by any nullities.

2. Factual Matter

2.1. Established Facts:

Upon analysis of the documentary evidence produced, the following facts are considered proven and of interest for deciding the case:

• The Stamp Duty assessment No. 2013 …, relating to the year 2012, whose payment deadline for the third instalment occurred on 30-11-2013, was delivered on 30-10-2013 in the Petitioner's electronic mailbox, as shown in documents 1 and 2 attached by the ATA with its response.

• Notification was effected on 24-11-2013, by virtue of Article 39, No. 10 of CPPT.

• The Petitioner accessed the electronic mailbox on 03-12-2013, as shown in document 2 attached by the ATA with its response.

• The Petitioner was cited on 30-01-2014, in the context of the tax enforcement proceeding no. …2013…, as shown in document 1 that the Petitioner attached with the arbitral request.

No other facts with relevance for deciding the case were proven.

2.2. Substantiation of the Established Factual Matter:

With regard to the established facts, the arbitrator's conviction was based on the documentary evidence attached to the file.

3. Legal Matter:

3.1. Question of Untimeliness of the Request

The time limit for filing a request for constitution of the arbitral tribunal is 90 days counted from the dates provided for in Nos. 1 and 2 of Article 102 of the Tax Procedure and Process Code (CPPT), in accordance with paragraph a) of No. 1 of Article 10 of RJAT.

It was proven that the ATA sent the Stamp Duty assessment in question in this case to the Petitioner's electronic mailbox on 30-10-2013. Under Article 39, No. 10 of CPPT, the Petitioner is considered notified on the 25th day following dispatch to the electronic mailbox of the notification, provided the taxpayer does not access the mailbox on an earlier date. The Petitioner only accessed the mailbox on 03-12-2013, so it is considered that it was notified on 24-11-2013.

The payment deadline for the third instalment of the Stamp Duty assessment, which is the only one at issue in this case, ended on 30-11-2013, as was proven by the attachment of the assessment in question by the ATA with its response.

Under Article 120 of the Municipal Property Tax Code (CIMI), applicable by virtue of Article 44, No. 5 of the Stamp Duty Code, when the tax amount exceeds 500 €, it is paid in three instalments, in the months of April, July and November. This is the payment deadline for each of the instalments of the Stamp Duty assessment.

The third instalment of Stamp Duty assessed under item 28.1 of the TGIS would have to be paid by 30-11-2013, as mentioned above and as shown in the aforementioned document attached by the ATA.

Thus, the time limit for filing the arbitral request began on 01-12-2013 and ended on 28-02-2014.

Consequently, the request for constitution of the arbitral tribunal is untimely, since it was only filed on 28-04-2014.

The Petitioner alleges, however, that the payment deadline for voluntary payment of the Stamp Duty in question is the deadline stated in the citation. However, the Petitioner is not correct.

Article 35, No. 2 of CPPT provides that "citation is the act intended to give notice to the debtor that a certain enforcement action has been brought against him or to call him to it, for the first time, an interested party." Thus, citation is the calling of the taxpayer to tax enforcement, which occurs when he has not proceeded to pay the debt within the voluntary payment period. Once that voluntary payment period has ended, the ATA proceeds with compulsory collection of the debt through the tax enforcement proceeding. Hence, when the taxpayer is cited, he has an additional period of 30 days to pay the debt.

Article 102, No. 1, paragraph c) of CPPT, applicable by virtue of the referral in Article 10, No. 1, paragraph a) of RJAT, provides for a case in which judicial challenge may be filed within a period counted from the citation. This legal rule states that the judicial challenge will be presented within three months from the "citation of subsidiary liable parties in tax enforcement proceedings". But this option only benefits subsidiary liable parties in tax enforcement proceedings, which is not the case in this proceeding, so this time limit does not benefit the Petitioner.

In the case of the Petitioner, the time limit is that provided for in Article 102, No. 1, paragraph a) of CPPT, applicable by virtue of Article 10, No. 1, paragraph a) of RJAT, that time limit being counted from the expiration of the voluntary payment deadline.

In conclusion, the present request was filed after the legal time limit for doing so had elapsed, so the Petitioner's right to challenge the Stamp Duty assessment in question in this proceeding has lapsed.

Jorge Lopes de Sousa, in the Tax Procedure and Process Code, annotated and commented, 6th edition, Áreas Editora, 2011, page 155, states that "the challenge of voidable acts must be made within the time limit provided by law for each case. If the challenge is not raised within that time limit, the right to challenge on grounds of defects giving rise to voidability is barred".

Untimeliness, translated into the lapse of the right to request arbitral pronouncement, constitutes a dilatory exception, which entails the dismissal of the instance of the Tax Authority and Customs Authority and the termination of the instance (Article 288, No. 1, paragraph e) of the Civil Procedure Code).

The resolution of this preliminary question prejudges the examination of the other issues raised by the Petitioner, in accordance with the provisions of Article 660, No. 2 of the CPC, applicable ex vi Article 29, No. 1, paragraph e) of RJAT (in this sense, see the Judgment of the Supreme Administrative Court of 07-12-2011, case no. …/11).

4. Decision

In light of the foregoing, it is determined that the exception of lapse invoked by the Respondent is well-founded and, consequently, that the request for arbitral pronouncement is dismissed.

5. Value of the Proceeding:

In accordance with the provisions of Article 315, No. 2, of the CPC and 97-A, No. 1, paragraph a) of CPPT and 3, No. 2 of the Regulation of Costs in Tax Arbitration Proceedings, the value of the action is fixed at 14,844.50€.

6. Costs:

In accordance with Article 22, No. 4, of RJAT, and Table I attached to the Regulation of Costs in Tax Arbitration Proceedings, the amount of costs is fixed at 918.00€ to be borne by the Petitioner of the arbitral request.

Notify.

Lisbon, 2 March 2015.

Text prepared by computer, in accordance with Article 138, No. 5 of the Civil Procedure Code (CPC), applicable by referral from Article 29, No. 1, paragraph e) of the Tax Arbitration Regime, reviewed by me.

The sole arbitrator

(Suzana Fernandes da Costa)