Summary
Full Decision
Arbitral Decision [1]
Claimant – A…, Head of the Indivise Estate of B…
Respondent - Tax and Customs Authority
The Arbitrator, Dr. Sílvia Oliveira, designated by the Deontological Council of the Administrative Arbitration Center (CAAD) to form the Arbitral Tribunal, constituted on 19 December 2016, with respect to the process above identified, decided as follows:
1. REPORT
1.1. Indivise Estate of B…, taxpayer no.…, represented by A…, Head of the Estate, holder of Identity Card no.…, issued on 03/09/2007 and valid until 03/02/2018, taxpayer no.…, resident at …, no.…, …, in Lisbon (hereinafter referred to as "Claimant"), submitted a request for arbitral pronouncement and constitution of a singular Arbitral Tribunal on 7 October 2016, under the provisions of article 4 and no. 2 of article 10 of Decree-Law no. 10/2011, of 20 January [Legal Regime of Arbitration in Tax Matters (RJAT)], in which the Tax and Customs Authority is the Respondent (hereinafter referred to as "Respondent").
1.2. The Claimant requests that the Arbitral Tribunal:
1.2.1. Declare the "(…) illegality and unconstitutionality of the express refusal (…) regarding a request for revision of stamp duty assessments that (…) are identified, in the global amount of € 16.114,71 (…) which were fully paid, so that it would proceed to its annulment, and consequently, to the refund (…) of the amounts unduly borne, as well as the default interest accrued from the date of each of the payments until the full refund (…) of the amounts unduly paid".
1.3. The request for constitution of the Arbitral Tribunal was accepted by the Honorable President of CAAD and automatically notified to the Respondent on 11 October 2016.
1.4. The Claimant did not appoint an arbitrator, whereby, under the provisions of article 6, no. 2, paragraph a) of RJAT, the undersigned was designated as arbitrator by the President of the Deontological Council of CAAD, with the appointment being accepted within the prescribed deadline and terms.
1.5. On 30 November 2016, the Parties were duly notified of this designation, having not expressed any intention to refuse the arbitrator's appointment, in accordance with the provisions of article 11, no. 1, paragraphs a) and b) of RJAT in conjunction with articles 6 and 7 of the Deontological Code.
1.6. In compliance with the provision of paragraph c), of no. 1, of article 11 of RJAT, the Arbitral Tribunal was constituted on 19 December 2016, having issued an arbitral order on the same date, to the effect of notifying the Respondent to, in accordance with the provisions of article 17, no. 1 of RJAT, submit a Reply, within a maximum period of 30 days and, if it wished, request the production of additional evidence.
1.7. Additionally, it was further stated in that arbitral order that the Respondent should remit to the Arbitral Tribunal, within the deadline for Reply, a copy of the administrative file.
1.8. On 1 February 2017, the Respondent submitted its Reply, having defended itself through exception and impugnation and concluding that the Arbitral Tribunal should:
1.8.1. "Declare itself materially incompetent to assess the immediate object of the dispute (express refusal of the revision request), given the manifest impropriety of the procedural means used, absolving the Respondent from the action";
1.8.2. If not so understood, "consider the exception of expiry of rights verified regarding the request for constitution of the arbitral tribunal, given that it has as mediate object the assessment of the legality of assessment acts whose period of challenge had long since expired, absolving the Respondent from the petition";
1.8.3. Or, if not so understood, "the petition for arbitral pronouncement should be judged unfounded, as the requirements and prerequisites of official revision of the tax act (…) have not been met, whose express refusal motivated the present petition, absolving the Respondent from the petition";
1.8.4. And, if not so understood, "the present action should be judged unfounded, as unproven, given the legality and constitutionality of the assessment, with the tax assessment acts impugned being maintained in the legal order, accordingly absolving the respondent entity from the petition".
1.9. Additionally, in the Reply presented, the Respondent further stated that "(…) finding no interest and utility in carrying out the arbitral meeting provided for in article 18 of RJAT, the exemption of the same is requested, as well as the presentation of arguments, and if the Claimant does not waive the latter, it is already requested that the same be presented in writing, in a successive manner".
1.10. On the same date, the Respondent attached to the case file the administrative file.
1.11. Taking into account the exceptions raised by the Respondent in its Reply, the Claimant was notified by arbitral order dated 3 February 2017, to pronounce itself, if it so wished, within a period of 10 days on the matter of exception.
1.12. The Claimant submitted, on 13 February 2017, a petition to pronounce itself on the matter of exception raised by the Respondent in its Reply, in the following terms:
1.12.1. Regarding the material incompetence invoked, the Claimant understands that "(…) it must be concluded that the Arbitral Tribunal is competent to assess the matter that is the object of the present case file", because:
a) "The official revision request had as its purpose to apply to the assessments of the years 2011 and 2012, the same interpretation that annulled the assessments relating to the same tax, and the same property, in the years 2013 and 2014, because it is the same illegality detected";
b) "The basis of the petition was notorious injustice that should have been corrected by the Tax Authority (…) because after they had corrected the assessments of the years 2013 and 2014, it is clear that the reason for that annulment was entirely applicable to the previous years, and all the deadlines were still in effect to obtain the revision of the assessment acts promoted, it should have promoted their rectification";
c) "Thus, the express refusal of the petition for revision of a tax act is an act that can be assessed by the Arbitral Tribunal (…), as it is an act that allows the maintenance of an illegal assessment act, an act that should have already been corrected in accordance with the law".
1.12.2. Regarding the exception of impropriety of the procedural means, the Claimant understands that "the debate on the procedural means competent to assess the challenge to the legality of the act of refusal of the official revision petition becomes futile" because "(…) the arbitral tribunal is materially competent to decide (…)", whereby "(…) there cannot be error in the form of process".
1.12.3. Regarding the exception of expiry of rights to petition for revision of a tax act, the Claimant does not agree with the Respondent's position, stating that even if it were understood that "(…) the rule establishing the period as 3 years (…)" as to the submission "(…) of the petition for revision of a tax act (…)", it could not "(…) ever be considered the petition completely untimely, whereby the allegation by the Tax Authority (…) does not proceed", and the Claimant states that it has "already obtained confirmation of this understanding in an arbitral decision issued (…) in a case that followed the same contours, however concerned another property of the Claimant (…)".[2]
1.13. In these terms, the Claimant concludes that "the Arbitral Tribunal should declare unfounded the exception of material incompetence of the Arbitral Tribunal to assess the matter which is the object of the present case file; declare unfounded the exception of impropriety of the procedural means, for the treatment of the matter which is the object of the present case file and declare unfounded the exception of expiry of the petition for revision of a tax act".
1.14. The Claimant was notified by arbitral order, dated 14 February 2017, to pronounce itself within a period of 5 days on the possibility of waiving the holding of the meeting referred to in article 18 of RJAT, as well as the presentation of arguments.
1.15. The Claimant submitted, on 24 February 2017, a petition to the effect of not opposing the waiver of the holding of the meeting referred to in the previous point, as well as not opposing the waiver of the presentation of arguments.
1.16. In these terms, by order of this Arbitral Tribunal, dated 24 February 2017, it was decided:
1.16.1. To dispense with the holding referred to in article 18 of RJAT;
1.16.2. To dispense with the presentation of arguments by the Parties;
1.16.3. To designate the day 24 March 2017 for purposes of issuing the arbitral decision.
1.17. Lastly, the Claimant was further warned that "until the date of issuing the arbitral decision it should proceed to the payment of the subsequent arbitration fee, in accordance with the provisions of no. 3 of article 4 of the Regulation of Costs in Tax Arbitration Proceedings and communicate this payment to CAAD" (which it proceeded to do on 2 March 2017).
2. CAUSE OF ACTION
The Claimant supports its petition, in summary, in the following manner:
2.1. It alleges that it is "(…) the sole and exclusive owner of the urban property located at …, no.…, in Lisbon, in the parish …, described in the Land Registry Office of Lisbon under the no.…, and registered in the urban tax matrix with article…, of the parish … and that at the date of issuance of the assessments referred to here it was registered in the tax matrix of the parish of … under article … (…)".
2.2. The Claimant continues by stating that "the (…) property comprises 13 (…) units susceptible of independent use (…)" and that "only 10 of the 13 independent units have residential use (…)".
2.3. The Claimant further clarifies that "the property, in full ownership [comprising (…) a total of 13 units susceptible of independent use], via its total VPT, at the date of issuance of the assessments which are the object of the present petition (…) amounted to the value of € 1.239.100,00 (…)", "and none of the units with residential use had or has today a patrimonial value exceeding € 1.000.000,00 (…)".
2.4. The Claimant further states that, in 2012, "(…) adding the VPT's of the units susceptible of independent use of the property with residential use, a patrimonial value of € 1.014.160,00 was reached (…)", "which led the Tax Authority to understand that (…) it was legitimized to levy this tax (…) by reason of the fact that the total VPT of the residential units exceeded € 1.000.000,00 (…)", "having for this purpose, considered the residential units of the said property as if they were a single property".
2.5. The Claimant continues by stating that "the Tax Authority issued an annual Stamp Duty assessment for each of the units susceptible of independent use, (…) with date 07-11-2012, the tax (…) referring to the year 2011 (…)" and "covered by the aforementioned assessments, the Tax Authority issued 11 (…) payment notices for payment of the amounts determined in the aforementioned assessments, with date (…) payment deadline until 20-12-2012, which (…) it paid timely", in the total amount of EUR 5.240,55.
2.6. In 2013, "the Tax Authority issued an annual Stamp Duty assessment for each of the units susceptible of independent use, which it did on 22-03-2013, the tax being levied through them referring to the year 2012 (…)", "(…) whose payment was divided into three installments (…)", with the Claimant having paid "(…) the 1st installments on 26-04-2013, the 2nd installments on 17-07-2013, and 3rd installments, on 27-11-2013", with the total value of the Stamp Duty paid amounting to EUR 10.874,16.
2.7. However, the Claimant understands that "(…) the tax paid (…) was not due", as it has "(…) unanimously been advocated by doctrine and jurisprudence (…)" since it has been understood that "in properties under the regime of full ownership with floors susceptible of independent use, as own patrimonial values, the arithmetic sum of those values is not admissible in order to reach the VPT of € 1.000.000,00 or higher, to apply item 28.1 of the table attached to the Stamp Duty Code".[3]
2.8. Now, given the above described, the Claimant understood that "(…) the requirements for revision of the tax acts were met (…)", because "(…) there is notorious or serious injustice and an error attributable to the services (…)", whereby it understands that "(…) the Tax Authority should proceed to the correction of the identified injustice".
2.9. Nevertheless, from the revision request submitted on 5 April 2016 resulted the express refusal, on 5 August 2016, a fact that the Claimant does not accept, because "(…) the facts that constitute the situation dealt with here make it clear that the refusal, even if express, by the Tax Authority, is illegal, because (…) it corroborates the identified error situation and allows the maintenance of a notorious and serious injustice that the law requires to be corrected".
2.10. On the other hand, and regarding the assessment acts proper, according to the Claimant, not requiring "(…) the current legal regime (…) the obligation to establish horizontal ownership (…) the Tax Authority's action translates into arbitrary and illegal discrimination", because "the Tax Authority cannot distinguish where the legislator itself understood not to, under penalty of violating the coherence of the fiscal system, as well as the principle of fiscal legality provided for in article 103 of the CRP, and furthermore the principles of justice, equality and fiscal proportionality".
2.11. In these terms, the Claimant petitions that this Arbitral Tribunal order:
2.11.1. "Revocation of the decision of express refusal (…) regarding the petition for revision of tax acts submitted by the impugnant, because it is illegal";
2.11.2. "Declaration of illegality and/or unconstitutionality of the tax assessment acts for Stamp Duty sub judice (…) and consequent annulment, with all legal consequences, including of the payment notices (…) attached (…) because they violate the provisions contained in item no. 28 of the Table attached to the Stamp Duty Code and the precepts contained in articles 13, no. 2 and 104, no. 3 of the CRP";
2.11.3. "Condemnation of the Tax Authority to the refund (…) of the amounts unduly paid by (…) on account of Stamp Duty (…) relating to the years 2011 and 2012 (…), to which should be added compensatory interest at the legal rate of 4% (…)";
2.11.4. "Condemnation of the Tax Authority to the payment of procedural costs and other legal expenses that may be due".
3. REPLY OF THE RESPONDENT
3.1. The Respondent, in the reply presented, defended itself through exception and impugnation in the manner hereinafter described:
BY EXCEPTION
Of the impropriety of the procedural means and material incompetence of the Arbitral Tribunal
3.2. The Respondent begins by alleging that "the Claimant intends to examine what it designates as express refusal in the course of the official revision request presented, deeming it illegal" but "it is clear that the Tax Authority, not having issued an express decision on the petition presented, (has still) not pronounced itself (…) on the admissibility of the prerequisites of the revision petition, namely as regards legitimacy, timeliness, adequacy of the means (…) and, consequently, has not pronounced itself on the underlying materiality (the legality of the stamp duty assessments)".
3.3. That is, according to the Respondent, "(…) such express refusal does not, obviously, comprise the assessment of the legality of the tax assessment act, which the Claimant intends, indirectly, to see annulled by this arbitral tribunal", because "as follows from article 95, no. 1, of the General Tax Law, the interested party has the right to challenge or appeal any act harmful to its rights and legally protected interests according to the procedural forms prescribed by law", and "it follows from article 97, no. 1, paragraph d) and no. 2 of the Code of Tax Procedure that, on the one hand, are challengeable administrative acts in tax matters that comprise the assessment of the legality of the assessment act and, on the other hand, are appealable administrative acts in tax matters, which do not comprise the assessment of the legality of the assessment act".
3.4. Thus, according to the Respondent, "(…) being manifest that we are not dealing with an administrative act in tax matters that comprises the assessment of the legality of the assessment act, the same cannot be subject to examination through judicial challenge (…)", "reason for which the contentious means to be used would be (…) the previously named contentious appeal [current administrative action (…)]".
3.5. Now, the Respondent understands that "it is found that the examination in question is outside the scope of matters susceptible of assessment in arbitration (…)", "that is, it is outside the material competencies of the Arbitral Tribunal, the examination and/or analysis of the express refusal of the revision petition, when it is certain that the same does not comprise the assessment of the legality of the assessment act, and cannot, therefore, be subject to judicial challenge".
3.6. In these terms, the Respondent understands that there are verified, "in the concrete case, the dilatory exceptions that translate into the impropriety of the procedural means used and consequent material incompetence of the arbitral tribunal, which prejudice the knowledge of the merits of the case, and should determine the absolution of the (…) Respondent from the action (…)".[4]
Of the expiry of rights to action regarding the challenge to the Stamp Duty assessments of the years 2011 and 2012
3.7. In this regard, the Respondent states that "(…) regarding the mediate petition for declaration of illegality and/or unconstitutionality of the tax assessment acts for stamp duty (…) for which this arbitral tribunal would, eventually, be competent, the same is manifestly untimely", because "being assessments relating to the years 2011 and 2012, issued (and paid) in 2012 and 2013, the deadline for filing the petition for constitution of the Arbitral Tribunal had long since expired (…)".
3.8. Thus, "regarding the mediate object of this case, there remains, therefore, no other solution than to seek the expiry of the right to action, a peremptory exception (…), to the extent that, importing the impossibility of the exercise of the right, it implies its extinction".
3.9. In these terms, the Respondent concludes, regarding the exceptions it raises that:
3.9.1. Being "(…) the immediate object of the present case (…) the revocation of the order of express refusal of the petition for official revision of the assessments, petition this (…) for whose assessment this Arbitral Tribunal is materially incompetent, (…)" and,
3.9.2. "As regards the mediate object, for which the Arbitral Tribunal would have competence, the petition proves to be manifestly untimely (…)".
BY IMPUGNATION
Regarding the petition for official revision
3.10. In matters of defense by impugnation, the Respondent invokes that "the Claimant bases the timeliness of its petition for constitution of the arbitral tribunal, on the express refusal of the official revision petition of the assessment (…)" but understands the Respondent that "(…) the Tribunal Arbitral cannot consider timely the present petition, as, manifestly, the legal prerequisites required (…) have not been met" because, according to the Respondent, "the petition for official revision of the assessment is not the adequate means to obtain the revision of the assessments, in the terms and period in which it was formulated, and much less, can it have the virtue of opening a new and final period for petition for constitution of the arbitral tribunal".
3.11. Indeed, the Respondent defends "(…) that at the moment the petition for official revision was formulated, the deadline for administrative claim had already been largely exceeded, whereby the initiative of the procedure would primarily belong to the tax administration", being incumbent upon the "head of the service to authorize, exceptionally, in the three years following the tax act, the revision of the taxable matter determined on the basis of serious or notorious injustice, provided that the error is not attributable to negligent behavior of the taxpayer" or "(…) the tax administration, within the period of four years following the assessment (or at any time if the tax has not yet been paid), may promote the revision of the tax acts on the basis of error attributable to the services".
3.12. Now, the Respondent understands that "(…) there was no error attributable to the services, nor is there any illegality and much less unconstitutionality, that can be attributed to the present assessments, with the services of the Tax Authority, in a bound manner, only and merely, complying with what is stipulated in the law" because "(…) the matter in question (…) is taxable matter that results from the direct application of the Law, with no margin of freedom or discretion of the tax administration".
3.13. In this compliance, the Respondent concludes that "the stamp duty assessments made to the now Claimant, do not suffer from any error attributable to the services, and much less from serious or notorious injustice, namely resulting from taxation manifestly excessive and disproportionate with reality".
3.14. And, the Respondent continues by stating that "in the absence of error attributable to the services, or serious and notorious injustice as configured by article 78 of the General Tax Law, it is concluded that the prerequisites for official revision are not met, whereby the Arbitral Tribunal cannot assess, out of hand, the legality of the assessments".
Regarding the alleged illegality and unconstitutionality of the assessments
3.15. In this regard, the Respondent alleges that "what is at issue here are assessments that result from the direct application of the legal norm, which translates into objective elements, without any subjective or discretionary assessment" whereby, according to the Respondent, the thesis defended by the Claimant that the said assessments violate the principle of legality and fiscal equality lacks legal support.
3.16. Indeed, according to the Respondent, the assessments impugned constitute "(…) a correct application of law to the facts", and "the provision of item 28.1 of the TGIS does not constitute any violation of the principle of equality, with no discrimination existing in the taxation of properties constituted in horizontal ownership and properties in full ownership with floors or units susceptible of independent use, or between properties with residential use and properties with other uses", taking into account that "horizontal ownership and vertical ownership are differentiated legal institutes".
3.17. In this manner, the Respondent defends that "(…) one cannot conclude an alleged discrimination in violation of the principle of equality when, in fact, we are dealing with distinct realities, valued by the legislator differently".
3.18. On the other hand, the Respondent argues that "(…) taxation in the context of Stamp Duty complies with the criterion of adequacy, to the exact extent that it aims at the taxation of wealth embodied in the ownership of property of high value, appearing in a context of economic crisis that cannot be ignored", and that "the measure implemented seeks to achieve maximum effectiveness, regarding the objective to be achieved, with the minimum of injury to other interests considered relevant".
3.19. In these terms, the Respondent understands that it is "(…) legitimized to opt for this mechanism of obtaining income, which would only be censurable, in light of the principle of proportionality, if it resulted manifestly indefensible".
3.20. Thus, "(…) the Tax Authority understands that the stamp duty payment notices (…) impugned in the present case file remain entirely valid and legal, concluding that they are legal".
3.21. Regarding "(…) the specific question of the (un)constitutionality of the incidence norm contained in item 28.1 of the TGIS, when interpreted in the sense here above defended (…)", the Respondent cites the Constitutional Court (Decision no. 620/2015, issued in process 305/15) which decided "(…) not to judge as unconstitutional the incidence norm contained in item 28.1 of the General Table of Stamp Duty, when interpreted in the sense that it includes urban residential properties in full ownership composed of parts susceptible of independent use and considered separately in the registration (…)".
3.22. In these terms, the Respondent understands that the Arbitral Tribunal should:
3.22.1. "Declare itself materially incompetent to assess the immediate object of the dispute (express refusal of the revision petition), given the manifest impropriety of the procedural means used, absolving the Respondent from the action";
3.22.2. "If not so understood, should consider the exception of expiry of rights verified regarding the petition for constitution of the arbitral tribunal, given that it has as mediate object the assessment of the legality of assessment acts whose period of challenge had long since expired, absolving the Respondent from the petition";
3.22.3. "Or, if not so understood, the petition for arbitral pronouncement should be judged unfounded, as the requirements and prerequisites of official revision of the tax act (…) have not been met, whose express refusal motivated the present petition, absolving the Respondent from the petition";
3.22.4. "And if not so understood, the present action should be judged unfounded, as unproven, given the legality and constitutionality of the assessment, with the tax assessment acts impugned being maintained in the legal order, accordingly absolving the respondent entity from the petition".
4. PRELIMINARY MATTERS
Regarding the assessment of the exceptions raised by the Respondent
4.1. In accordance with the provision of article 608, no. 1 of the Code of Civil Procedure (CCP), applicable by virtue of the provision of article 29 of RJAT, "(…) the judgment knows, firstly, of the procedural matters that may determine the absolution from the action (…)", and the judge must "resolve all questions that the parties have submitted to its assessment, except those whose decision is prejudiced by the solution given to others (…)" (underlined).
4.2. Having the Respondent raised the following exceptions:
4.2.1. "Of the impropriety of the procedural means and material incompetence of the Arbitral Tribunal" to assess the petition for arbitral pronouncement deduced by the Claimant and;
4.2.2. "Of the expiry of the right to action regarding the challenge to the Stamp Duty assessments of the years 2011 and 2012",
it is necessary that this Arbitral Tribunal pronounce itself, previously, on these exceptions, analyzing, firstly, the exception of the alleged material incompetence of the Arbitral Tribunal for assessment of the petition for arbitral pronouncement deduced by the Claimant.
Of the material incompetence of the Arbitral Tribunal
4.3. In this regard, and as already referred to in Chapter 3 of this Decision, the Respondent alleges that "(…) the Claimant intends to examine what it designates as express refusal in the course of the official revision request presented, deeming it illegal" but "it is clear that the Tax Authority, not having issued an express decision on the petition presented, (has still) not pronounced itself (…) on the admissibility of the prerequisites of the revision petition, namely as regards legitimacy, timeliness, adequacy of the means (…) and, consequently, has not pronounced itself on the underlying materiality (the legality of the stamp duty assessments)" whereby the Respondent understands that "it is outside the material competencies of the Arbitral Tribunal, the examination and/or analysis of the express refusal of the revision petition, when it is certain that the same does not comprise the assessment of the legality of the assessment act, and cannot, therefore, be subject to judicial challenge" (underlined).
4.4. Now, being the determination of the competence of the courts a matter of public order and its knowledge should precede that of any other matter, [as extracted from the combined reading of the provisions of articles 16 of the Code of Tax Procedure and Process (CTPP), of 13 of the Code of Process in Administrative Courts (CPAC) and of 96 of the CCP, subsidiarily applicable by referral from no. 1 of article 29 of RJAT], this exception should be analyzed forthwith for, if it is judged well-founded, the knowledge of the merits of the case (or part thereof) will be prejudiced, justified by a decision of absolution from the action [article 89, no. 2 of CPAC, subsidiarily applicable by virtue of the provision of article 29, no. 1, paragraph c) of RJAT].
4.5. In general terms, in accordance with the provision of article 2 of RJAT, the competence of arbitral tribunals comprises "the declaration of illegality of acts of assessment of taxes, self-assessment, withholding at source and payment on account", as well as "the declaration of illegality of acts of determination of the taxable matter when not giving rise to the assessment of any tax, of acts of determination of the collectable matter and of acts of determination of patrimonial values" (underlined). [5]
4.6. On the other hand, article 95 of the General Tax Law (GTL) provides that "the interested party has the right to challenge or appeal any act harmful to its rights and legally protected interests, according to the procedural forms prescribed by law", and may be harmful, in particular, "the assessment of taxes (…)".
4.7. In this matter, it results from the normative framework above transcribed that, in general terms, the claim for declaration of illegality of assessment acts may be subject to, either judicial challenge, or petition for arbitral pronouncement.
4.8. In the case under analysis, the Claimant petitions that the "(…) illegality and unconstitutionality of the express refusal (…) regarding a petition for revision of stamp duty assessments that (…) are identified (…)" be declared and that "(…) it would proceed to its annulment, and consequently, to the refund (…) of the amounts unduly borne (…)", accrued with the respective interest, calculated in accordance with the law on the amounts "(…) unduly paid" (underlined).
4.9. In this regard, and as concerns the petition for annulment of the act of express refusal of the petition for revision of the Stamp Duty assessments relating to the years 2011 and 2012, it must analyze, forthwith, and in greater detail, the competence of arbitral tribunals.
4.10 Indeed, in general terms, the competence of arbitral tribunals that function at CAAD is, firstly, limited to the matters indicated in article 2, no. 1, of RJAT and, in accordance with this rule, the competence of arbitral tribunals comprises (as above listed in point 4.5.) namely, "the declaration of illegality of acts of assessment of taxes (…)" (underlined).
4.11. In addition to the direct assessment of the legality of the type of acts described in article 2 of RJAT, are also included in the competencies of arbitral tribunals that function at CAAD the competencies to assess acts of second or third degree that have as object the assessment of the legality of acts of that nature, namely, of acts that decide administrative claims and hierarchical appeals, as can be inferred from the express references that are made in article 10, no. 1, paragraph a), of RJAT to no. 2 of article 102 of the CTPP (which refers to the judicial challenge of decisions on administrative claims) and to the decision of the hierarchical appeal.
4.12. On the other hand, it has also been understood, in harmony with the jurisprudence of the Supreme Administrative Court that, following the declaration of illegality of assessment acts, issued in a judicial challenge proceeding, decisions may be issued condemning the payment of compensatory interest as well as, by virtue of article 171, no. 1, of the CTPP, condemnation to the payment of indemnification for undue guarantee.
4.13. Nevertheless, beyond the situations above listed, it has been understood that there is no legal support to allow other condemnations to be issued by arbitral tribunals, even if they are a consequence of the declaration of illegality of assessment acts.
4.14. Thus, the competence of arbitral tribunals is limited to the matters indicated in article 2, no. 1, of RJAT and, in a second line, the said competence (of arbitral tribunals that function at CAAD) is also limited by the terms in which the Tax Administration is bound to that jurisdiction (in accordance with the provision of Regulation no. 112-A/2011, of 22 March).
4.15. In fact, article 4 of RJAT provides that "the binding of the tax administration to the jurisdiction of the tribunals constituted in accordance with this law depends on a regulation of the Government members responsible for the areas of finance and justice, (…)".
4.16. In these terms, in light of this second limitation of the competence of arbitral tribunals that function at CAAD, the resolution of the question of competence depends, essentially, on the terms of this binding because, even if one is dealing with a situation that can be framed in the aforementioned article 2 of RJAT, if it is not covered by the binding above identified, the possibility of the dispute being jurisdictionally decided by this Arbitral Tribunal will be excluded.
4.17. Now, in accordance with the provision of paragraph a), of article 2 of the Regulation above referred to, are expressly excluded from the scope of the binding of the Tax Administration to the jurisdiction of arbitral tribunals that function at CAAD the "claims relating to the declaration of illegality of acts of self-assessment, withholding at source and payment on account that have not been preceded by recourse to the administrative process in accordance with articles 131 to 133 of the Code of Tax Procedure and Process", whereby this express reference to the prior "recourse to the administrative process" should be interpreted as referring to cases in which such recourse is mandatory, through the administrative claim (which is the administrative means indicated in articles 131 to 133 of the CTPP), to whose terms it refers.
4.18. In the concrete case, having the declaration of illegality and annulment of the act of refusal of the petition for official revision relating to the Stamp Duty assessments of the year 2011 and the year 2012 been requested, it is important, before all, to clarify whether the declaration of illegality of acts of refusal of petitions for revision of the tax act, provided for in article 78 of the GTL, is included in the competencies attributed to arbitral tribunals that function at CAAD, in accordance with the provision of article 2 of RJAT.
4.19. In fact, in this article 2 of RJAT no express reference is made to these acts, unlike what occurs with the legislative authorization on which the Government relied to approve RJAT, when it refers to "petitions for revision of tax acts" and "administrative acts that comprise the assessment of the legality of assessment acts".
4.20. However, the formula "declaration of illegality of acts of assessment of taxes, self-assessment, withholding at source and payment on account", used in paragraph a), of no. 1 of article 2 of RJAT does not restrict (in a mere declarative interpretation), the scope of arbitral jurisdiction to cases in which an act of that nature is directly challenged.
4.21. Indeed, the illegality of assessment acts may be declared jurisdictionally as a corollary of the illegality of an act of second degree, which confirms an assessment act, incorporating its illegality.
4.22. The inclusion in the competencies of arbitral tribunals that function at CAAD of cases in which the declaration of illegality of the acts indicated there is effected through the declaration of illegality of acts of second degree (which are the immediate object of the impugnatory claim), results with certainty from the reference that in that rule is made to assessment acts, self-assessment, withholding at source and payment on account, which are expressly referred to as being included among the competencies of arbitral tribunals.
4.23. Once the conclusion has been obtained that the formula used in paragraph a) of no. 1 of article 2 of RJAT does not exclude cases in which the declaration of illegality results from the illegality of an act of second degree, it will also encompass cases in which the act of second degree is that of refusal of petition for revision of the tax act (since no reason is seen for restricting, especially since, in cases in which the revision petition is made within the deadline of the administrative claim, it should be equated with an administrative claim).
4.24. Thus, the express reference to article 131 of the CTPP that is made in article 2 of the Regulation above referred to cannot have the effect of excluding the possibility of assessing petitions for illegality of acts of refusal of petitions for official revision of assessment acts.
4.25. In the case under analysis, being the tax acts underlying the revision petition, two assessments of Stamp Duty (relating to the years 2011 and 2012), made by the Respondent itself, and having the latter had knowledge of the rules it applied (making a prior pronouncement, via administrative claim, on the legality of the legal situation created with the assessment acts in question unnecessary), with the official revision petition presented an opportunity was provided to the Tax Administration to pronounce itself on the merits of the claim of the taxpayer before the latter resorted to the judicial path.
4.26. Thus, it is unequivocal that the law expressly grants taxpayers the possibility of choosing between the administrative claim or the official revision of assessment acts and, with the official revision petition being formulated within the deadline of the administrative claim, it is perfectly equatable with an administrative claim.
4.27. In these terms, securing with the revision of the tax act the possibility of assessment of the claim of the taxpayer before access to the contentious path (which is intended to be achieved with the challenge), the most correct solution [because it is the most coherent with the legislative intent to "strengthen effective and actual protection of the rights and legally protected interests of taxpayers" (manifested in no. 2 of article 124 of Law no. 3-B/2010, of 28 April)], is the admissibility of the arbitral path to assess the legality of assessment acts previously assessed in a revision procedure without need for prior presentation of an administrative claim.
4.28. Now, reached at this point of prior framing, it is important to analyze whether the Respondent's reasoning is correct when it states that "it is outside the material competencies of the Arbitral Tribunal, the examination (…) of the express refusal of the revision petition, when it is certain that the same does not comprise the assessment of the legality of the assessment act, and cannot, therefore, be subject to judicial challenge".
4.29. As above already referred to, article 2 of RJAT defines "the competence of arbitral tribunals", but does not expressly include the assessment of claims for declaration of illegality of acts of refusal of petitions for official revision of tax acts.
4.30. However, the fact that in paragraph a), of no. 1, of article 10 of RJAT reference is made to nos. 1 and 2 of article 102 of the CTPP (in which the various types of acts that give rise to the deadline for judicial challenge are indicated, including, the administrative claim), lets it be perceived that all types of acts susceptible of being challenged through the judicial challenge process, encompassed by those nos. 1 and 2, will be covered, within the jurisdiction of arbitral tribunals that function at CAAD, provided that they have as object an act of one of the types indicated in that article 2 of RJAT.[6]
4.31. But, the same argument that is extracted from the legislative authorization also leads to the conclusion that the possibility of using the arbitral process will be excluded when, in the judicial tax process, the judicial challenge or the action for recognition of a right or legitimate interest is not usable.
4.32. Indeed, being this the sense of the said legislative authorization law and inserting itself in the relative reservation of legislative competence of the Assembly of the Republic to legislate on the "tax system" (including, as concerns the guarantees of taxpayers) and on the "organization and competence of courts", cannot the said article 2 of RJAT be interpreted as attributing, to arbitral tribunals that function at CAAD, competence for assessment of the legality of other types of acts (for whose challenge are not suitable the judicial challenge process and the action for recognition of a right or legitimate interest), under penalty of unconstitutionality, for lack of coverage in the legislative authorization law that limits the power of the Government.
4.33. In this regard, although in article 165, no. 1, paragraph i), of the Constitution of the Portuguese Republic (CRP), in which the relative reservation of legislative competence of the Assembly of the Republic is defined, reference is made to the creation of taxes and tax system, this rule must be integrated with the content of no. 2 of article 103 of the same, in which reference is made that the law determines the incidence, the rate, fiscal benefits and guarantees of taxpayers, which constitutes an explicit statement of the scope of matters included in that reservation, as has been, uniformly, understood by the Constitutional Court.[7]
4.34. Thus, to resolve the question of the competence of this Arbitral Tribunal it becomes necessary to establish in what terms the legality of an act of refusal of a petition for revision can be assessed, in a tax tribunal, through the judicial challenge process or if an action for recognition of a right or legitimate interest will have to be used.
4.35. In general terms, the act of refusal of a petition for revision of a tax act constitutes an administrative act, in light of the definition provided by article 120 of the Code of Administrative Procedure (CAP) [subsidiarily applicable, in tax matters, by virtue of the provision of article 2, paragraph d), of the GTL, article 2, paragraph d), of the CTPP, and article 2, no. 1, paragraph d), of RJAT], because it constitutes a decision of an organ of the Administration that under the authorization of norms of public law intended to produce legal effects in an individual and concrete situation.
4.36. On the other hand, it is also indisputable that it is an act in tax matters because the application of norms of tax law is made in it, that is, an act of refusal of a petition for revision constitutes an "administrative act in tax matters".
4.37. From the provision in paragraphs d) and p), of no. 1 and of no. 2, of article 97 of the CTPP is inferred the rule that the challenge of administrative acts in tax matters should be effected, in the judicial tax process, through judicial challenge or special administrative action (which succeeded the contentious appeal, in accordance with article 191 of the CPAC) depending on whether these acts comprise or do not comprise the assessment of the legality of administrative acts of assessment.
4.38. In these terms, in light of this criterion of distribution of the fields of application of the judicial challenge process and the special administrative action, the acts issued in procedures of official revision of assessment acts may only be challenged through the judicial challenge process when they comprise the assessment of the legality of these assessment acts, and if the act of refusal of the petition for official revision of the assessment act does not comprise the assessment of the legality of this the special administrative action will apply.[8]
4.39. Now, adopting the understanding that the judicial challenge process is the suitable procedural means to challenge acts of refusal of petitions for official revision of assessment act, it will be possible to conclude that one is not dealing with a situation in which in the judicial tax process an action for recognition of a right or legitimate interest could be used, as its application in tax contentious matters has a residual nature, since these actions "may only be proposed whenever this procedural means is the most suitable to ensure full, effective and actual protection of the right or legally protected interest" (see article 145, no. 3, of the CTPP).[9]
4.40. In fact, the legislative concern in excluding, from the competencies of arbitral tribunals that function at CAAD, the assessment of the legality of administrative acts that do not comprise the assessment of the legality of assessment acts, besides resulting, forthwith, from the generic directive of creation of an alternative means to the judicial challenge process and the action for recognition of a right or legitimate interest, results with clarity from paragraph a), of no. 4, of article 124 of Law no. 3-B/2010, of 28 April, in which are indicated among the possible objects of the tax arbitration process "the administrative acts that comprise the assessment of the legality of assessment acts", as this specification can only be justified by a legislative intent to exclude from the possible objects of the arbitration process the assessment of the legality of acts that do not comprise the assessment of the legality of assessment acts.
4.41. Therefore, the solution to the question of the competence of this Arbitral Tribunal connected with the content of the act of express refusal of the petition for revision of the two assessment acts of Stamp Duty subject of the petition, depends on the analysis of that act.
4.42. Now, in the case under analysis, there was no an express decision of refusal of the petition for official revision of the identified assessment acts but rather the formation of the presumption of express refusal.
4.43. Indeed, in accordance with the provision of article 57, no. 1 of the GTL, "the tax procedure must be concluded within the period of four months (…)", and in accordance with the provision of no. 5 of the same article, and "without prejudice to the principle of celerity and diligence, the failure to comply with the deadline referred to in no. 1, counted from the entry of the taxpayer's petition in the competent service of the tax administration, raises the presumption of its refusal for purposes of hierarchical appeal, contentious appeal or judicial challenge" (underlined).
4.44. On the other hand, in accordance with the provision of article 95, no. 1 of the GTL, "the interested party has the right to challenge or appeal any act harmful to its rights and legally protected interests, according to the procedural forms prescribed by law", and no. 2 of the same article lists some of the acts that "may be harmful, namely (…)", "the refusal, express or presumed and total or partial, of claims, appeals or petitions for revision or reformation of the assessment (…)" [paragraph d)] (underlined).[10]
4.45. Thus, in light of the above stated in the previous points, it will be concluded that, being the figure of presumed refusal a legal fiction intended to permit, to the interested parties, the contentious reaction against the non-compliance by the tax administration with the legal deadlines for decision, and taking into account that this act of presumed refusal comprises (although not express), an assessment of the legality of the underlying assessment act(s), the suitable procedural means of contentious reaction to the same will be that of judicial challenge (and not of special administrative action, as the Respondent defends in its Reply), to be deduced within the period of 90 days, following the formation of the presumption of express refusal [in accordance with the provision of article 102, no. 1, paragraph a) of the CTPP].[11]
4.46. In these terms, it is unequivocal that the Respondent's reasoning is incorrect when it states that "(…) such express refusal does not (…) comprise the assessment of the legality of the tax assessment act (…)" and that, therefore, "it is outside the material competencies of the Arbitral Tribunal, the examination (…) of the express refusal of the revision petition (…)", because this act cannot "(…) be subject to judicial challenge".
4.47. In consequence, this Arbitral Tribunal concludes that the exception of material incompetence is unfounded as concerns the petition for assessment of the legality of the act of express refusal of the petition for official revision relating to the assessment acts of Stamp Duty (of the years 2011 and 2012), because there is, as we have seen, no impropriety of the procedural means used by the Claimant.
Of the expiry of rights to action regarding the challenge to the Stamp Duty assessments of the years 2011 and 2012
4.48. Having the exception of material incompetence of the Arbitral Tribunal to assess the immediate object of the petition for arbitral pronouncement (petition for assessment of the legality of the act of express refusal of the petition for official revision relating to the assessment acts of Stamp Duty of the years 2011 and 2012) been declared unfounded, it is now necessary to analyze the exception of expiry of the right to action, invoked by the Respondent, regarding the mediate petition underlying in the case file, that is, regarding the timeliness of the arbitral petition as concerns the challenge to the assessment acts of Stamp Duty of the years 2011 and 2012.
4.49. In the case sub judice, as above already referred to, the Claimant requested, on 5 April 2016, the revision of the assessment acts of Stamp Duty of the years 2011 and 2012, on the basis of "notorious or serious injustice" (see articles 47 et seq. of the revision petition of the tax acts) or if not so understood "(…) (by absurdity) (…) the situation sub judice would always fall within the scope of application of article 78, no. 1 of the GTL" because, according to the Claimant, "in the case in question the assessment of the tax occurs through gross error attributable to the services" (see articles 67 et seq. of the revision petition of the tax acts), concluding the Claimant its revision petition that "(…) whether by way of no. 1 or by way of no. 2 of article 78 of the GTL, the (…) petition is timely" (see article 73 of the revision petition of the tax acts) (underlined).
4.50. As we have seen, in this regard the Respondent understands that "(…) as for the (…) petition for declaration of illegality and/or unconstitutionality of the tax assessment acts (…) the same is manifestly untimely", because "(…) being assessments relating to the years 2011 and 2012, issued (and paid) in 2012 and 2013, the deadline for filing the petition for constitution of the Arbitral Tribunal had long since expired (…)", concluding thus that the "expiry of rights import the absolution in whole or in part from the petition (…)".
4.51. In this matter, it may be stated, preliminarily, that the arbitral nature of this tribunal and the application of the tax arbitration regime do not entail any modification regarding the nature, modalities and manner of counting the deadlines (as extracted from the reading of RJAT) and, if there were any doubts, article 29 of RJAT provides for the subsidiary application of the norms of a procedural or processual tax nature, of the norms on organization and process in administrative and tax tribunals, of the CAP and of the CCP.
4.52. In general terms, taking into account the provision of no. 1 of article 102 of the Code of Tax Procedure and Process (CTPP), the deadline for deduction of judicial challenge is three months counted from the facts enumerated in that article, namely, from the "end of the deadline for voluntary payment of tax installments legally notified to the taxpayer" or from the "formation of the presumption of express refusal".
4.53. On the other hand, in accordance with the provision of article 10, no. 1, paragraph a) of RJAT, the petition for constitution of an arbitral tribunal must be presented "within the period of 90 days, counted from the facts provided for in nos. 1 and 2 of article 102 of the CTPP (...)".
4.54. In the case under analysis, the Claimant requests that the "revocation of the decision of express refusal (…) regarding the petition for revision of tax acts presented" be declared and that the "(…) illegality and/or unconstitutionality of the tax assessment acts for Stamp Duty sub judice (…)" be declared, that is, of the assessment acts of Stamp Duty relating to the years 2011 and 2012 (dated 7 November 2012 and 22 March 2013, respectively).
4.55. Now, having the Claimant been notified:
4.55.1. Of the Stamp Duty assessment of the year 2011, whose payment notice for the "Single Installment" of tax had as deadline for voluntary payment "20 December 2012" and,
4.55.2. Of the Stamp Duty assessment of the year 2012, whose payment notices had as deadlines for voluntary payment, respectively "April/2013", "July/2013" and "November/2013" and,
And having the formation of the presumption of express refusal relating to the petition for revision of the Stamp Duty assessments of the years 2011 and 2012 occurred (the four-month deadline for conclusion of the tax procedure having elapsed, "counted from the entry of the taxpayer's petition in the competent service of the tax administration", that is, four months from 5 April 2016), it is easily understood that, in either case, the counting of the above-referred deadline in points 4.52. and 4.53. for presentation of the petition for constitution of an Arbitral Tribunal will not begin on the day following the end of the deadline for voluntary payment of the tax installments, but rather on the day following the date on which the express refusal of the petition for revision of the Stamp Duty tax acts in question is presumed (5 August 2016) because, legitimately, the examination of the legality of the act of express refusal of that petition for revision of the said tax acts is also petitioned (whose legality is also intended to be examined).
4.56. Thus, having the petition for arbitral pronouncement been submitted on 7 October 2016, it is considered timely regarding the examination of the legality of the act of refusal of the petition for revision of the Stamp Duty assessment acts which is the object of the petition, as a way to examine the legality of the Stamp Duty assessments relating to the years 2011 and 2012.
4.57. In these terms, this Arbitral Tribunal concludes that the exception of expiry of the right to action as concerns the challenge to the Stamp Duty assessments of the years 2011 and 2012 which are the object of the Petition for Arbitral Pronouncement is unfounded.
4.58. Finally, heed should also be paid to the matter raised by the Respondent (included in the defense by impugnation but concerning the alleged untimeliness of the arbitral petition) that it cannot "(…) the Arbitral Tribunal consider timely the present petition, as, manifestly, the legal prerequisites required by article 78 of the GTL (…) have not been met" because the Respondent understands that "in the absence of error attributable to the services, or serious and notorious injustice as configured by article 78 of the General Tax Law, it is concluded that the prerequisites for official revision are not met, whereby the Arbitral Tribunal cannot assess, out of hand, the legality of the assessments".
4.59. In general terms, article 78 of the GTL provides for the revision of the tax act "at the initiative of the taxpayer" or at the initiative "of the tax administration", the former "within the deadline of administrative claim and on the basis of any illegality", and the latter "within the period of four years following the assessment or at any time if the tax has not yet been paid, on the basis of error attributable to the services".
4.60. However, this does not mean that the taxpayer cannot, within the deadline for official revision, request this same revision, as results not only from the principles of legality, justice, equality and impartiality (article 266, no. 2 of the CRP), as well as from the written law itself, that is from article 78, no. 7 of the GTL itself.[12]
4.61. Indeed, the jurisprudence of the "Supreme Administrative Court has pronounced itself to the effect that the taxpayer can request the revision of the tax act (…) within the period of four years, on the basis of error attributable to the services (…)" because "(…) as occurs regarding any tax act, independently of being able to use the normal means of defense (administrative claim, hierarchical appeal and judicial challenge), the taxpayer can also request the revision of the tax act within the deadline of administrative claim on the basis of any illegality (…)", and can "also request the tax administration, within the period of four years following the assessment, to revoke the act on the basis of error attributable to the services", being "thus (…) to conclude that, the fact that the deadline for administrative claim and judicial challenge of the act of assessment has elapsed, did not prevent the impugnant from requesting official revision" (underlined). [13]
4.62. The above stated in the previous points is also expressed in the Decision of the Supreme Administrative Court of 11 May 2015 (Process no. 0319/05), in the terms of which it was understood that "article 78 of the GTL provides for the revision of the tax act at the initiative of the taxpayer or of the tax administration, the former within the deadline of administrative claim and on the basis of any illegality, and the latter within the period of four years following the assessment or at any time if the tax has not yet been paid, on the basis of error attributable to the services", and that "this does not mean that the taxpayer cannot, within the deadline for official revision, request this same revision", as "results, forthwith, from the principles of legality, justice, equality and impartiality (…)" (underlined).
4.63. As regards the "error attributable to the services contained in article 78, no. 1 at the end of the GTL (…)", it has been understood by the jurisprudence of the Supreme Administrative Court, namely, in Decision no. 01009/10, of 22/03/2011 that the said "(…) comprises error of law (…) which is not only simple lapse, material or factual error, as is clarified by no. 3 of article 78 of the GTL, in the version that was introduced by Law no. 55-B/04, of 30 December".[14]
4.64. Moreover, as stated in the Decision of the Supreme Administrative Court of 12/12/2001 (appeal 26.233), cited in the Decision identified in the previous point, "being error of law in the assessment (…) and being it made by the services, it is to the tax administration that this error is attributable (…)", and this "imputability to the services (…) is independent of the fault of any of its officials in making the assessment affected by error as the tax administration is generically obliged to act in compliance with the law (arts. 266, no. 1 of the CRP and 55 of the GTL), whereby, independently of proof of fault of any of the persons or entities that comprise it, any illegality not resulting from an action of the taxpayer will be attributable to the fault of the services themselves" (underlined).[15]
4.65. In the case sub judice, the Claimant requested, on 5 April 2016, the revision of the assessment acts of Stamp Duty of the years 2011 and 2012, because it understood that there was notorious or serious injustice and, if not so understood, there would always be, in the Stamp Duty assessments at issue, "(…) gross error attributable to the services".
4.66. In this regard, as the Supreme Administrative Court has been deciding, "although the concept of error attributable to the services (…) does not comprise every vice (in particular, form or procedural vices) but only errors, these comprise error in the factual and legal prerequisites, and this imputability to the services is independent of demonstrating the fault of the officials involved in issuing the act affected by the error" (underlined).[16]
4.67. In the case under analysis, either in the petition for revision of the assessment acts, or in the petition for arbitral pronouncement, the examination of the legality of the assessment acts of Stamp Duty of the years 2011 and 2012 is intended, and for this it is necessary to verify the factual and legal prerequisites that originated them and, in consequence, to assess the legality of the same.
4.68. Thus, as above we have seen, the Claimant could effect the said petition for revision within the period of four years, on the basis of error attributable to the services, whereby that revision petition is timely, as is also the arbitral petition subsequently submitted.
5. PRELIMINARY JUDGMENT
5.1. The petition for arbitral pronouncement is timely as it was presented within the period provided in paragraph a) of no. 1 of article 10 of RJAT [as analyzed in Chapter 4 of this Decision ("Preliminary Matters"), to which we refer here].
5.2. The Parties enjoy legal personality and capacity, are legitimate as concerns the petition for arbitral pronouncement and are duly represented, in accordance with the provisions of articles 4 and 10 of RJAT and of article 1 of Regulation no. 112-A/2011, of 22 March.
5.3. The Tribunal is competent as concerns the assessment of part of the petition for arbitral pronouncement formulated by the Claimant [as analyzed in Chapter 4 of this Decision ("Preliminary Matters"), to which reference is made here].
5.4. The cumulation of petitions effected here by the Claimant, is legal and valid, in accordance with the provisions of article 3, no. 1 of RJAT, given that the well-foundedness of the petitions depends, essentially, on the assessment of the same factual circumstances and the interpretation and application of the same principles or rules of law.
5.5. No other exceptions have been raised that should be known about beyond those raised by the Respondent (see analysis in Chapter 4 of this Decision).
5.6. No nullities are verified whereby it is now necessary to know about the merits of the petition.
6. MATERIAL FACTS
Of the proven facts
6.1. The following facts are considered as proven (supported by the documents hereinafter identified, attached by the Claimant, as well as by the administrative file, attached by the Respondent):
6.1.1. The Claimant is the owner of the urban property located at …, no.…, in Lisbon, described in the Land Registry Office of Lisbon under the no. … and registered in the urban tax matrix, since 2006, under the registration article no. … (extinct article…), of the parish of … (extinct parish of …), as per a copy of the Urban Property Registration Booklet, attached with the petition (doc. no. 4 and 5).
6.1.2. The said urban property is constituted in the regime of vertical (or full) ownership, being composed of 6 floors, intended, at the date to which the tax assessments relate, to commerce and habitation, in a total of thirteen floors or units susceptible of independent use, of which only ten had residential use, as per copy of the Urban Property Registration Booklet, attached with the petition (doc. no. 5).[17]
6.1.3. The total VPT of the said urban property was, in 2011, EUR 1.239.100,00, determined in the framework of an evaluation carried out on 2 October 2009, and the total of the VPT of all units or floors susceptible of independent use intended for habitation was EUR 1.048.110,00 (as results from the totalization of the VPT individually considered for purposes of issuing the Stamp Duty assessment payment notices of 2011), copies of whose payment notices were attached with the petition (doc. no. 7 to 17).[18]
6.1.4. The VPT of each of the units (or parts susceptible of independent use) intended for habitation, included in the Stamp Duty assessment payment notices of 2011, was between EUR 33.550,00 (value attributed to the unit called "Ground Floor E") and EUR 102.950,00 (value attributed to "5 D" and "5 E"), as per copy of the Urban Property Registration Booklet, attached with the petition (doc. no. 5).
6.1.5. The Claimant was notified of the payment notices for payment of the "Single Installment" relating to the Stamp Duty assessment (whose assessments that gave rise to it are dated 7 November 2012), relating to the year 2011 (whose payment deadline was "20 December 2012"), relating to the above identified property (see points 6.1.1. and 6.1.2.), as per copies of the respective payment documents attached with the petition (docs. no. 7 to 17) [the amounts are expressed in Euro (EUR)]:
IDENTIFICATION OF STAMP DUTY ASSESSMENT PAYMENT NOTICES FOR THE YEAR 2011
| Document No. | Floor | VPT | Collection | Single Installment | Doc. Attached to Petition |
|---|---|---|---|---|---|
| 2012 … | Ground Floor | 33.550,00 | 167,75 | 167,75 | 7 |
| 2012 … | 1 D | 99.440,00 | 497,20 | 497,20 | 8 |
| 2012 … | 1 E | 99.440,00 | 497,20 | 497,20 | 9 |
| 2012 … | 2 D | 100.970,00 | 504,85 | 504,85 | 10 |
| 2012 … | 2 E | 100.970,00 | 504,85 | 504,85 | 11 |
| 2012 … | 3 D | 101.960,00 | 509,80 | 509,80 | 12 |
| 2012 … | 3 E | 101.960,00 | 509,80 | 509,80 | 13 |
| 2012 … | 4 D | 101.960,00 | 509,80 | 509,80 | 14 |
| 2012 … | 4 E | 101.960,00 | 509,80 | 509,80 | 15 |
| 2012 … | 5 D | 102.950,00 | 514,75 | 514,75 | 16 |
| 2012 … | 5 E | 102.950,00 | 514,75 | 514,75 | 17 |
| TOTAL | | 1.048.110,00 | 5.240,55 | | |
6.1.6. For purposes of determining the incidence of Stamp Duty of item 28 on diverse autonomous parts of the property (above identified), was considered by the Respondent (i) the totalization of the VPT of all units or floors susceptible of independent use with residential use (which amounted, as already referred to in point 6.1.3. and in point 6.1.5., to EUR 1.048.110,00 and (ii) the residential use of the said autonomous parts.
6.1.7. For purposes of tax assessment, the Respondent applied the rate of 0.5% of Stamp Duty on the individual VPT of each of the fractions intended for habitation above identified in point 6.1.5.
6.1.8. The Claimant made the payment of the assessment payment notices identified in point 6.1.5., above, on 19 December 2012, as per copies of the respective banking transfer documents "…", attached with the petition.
6.1.9. The totalization of the VPT of all units or floors susceptible of independent use intended for habitation was, on 31 December 2012, EUR 1.087.414,15 (as results from the totalization of the VPT individually considered for purposes of issuing the Stamp Duty assessment payment notices of 2012), copies of whose payment notices were attached with the petition (doc. no. 19 to 50).[19]
6.1.10. The VPT of each of the units (or parts susceptible of independent use) intended for habitation, included in the Stamp Duty assessment payment notices of 2012, was between EUR 34.808,13 (value attributed to the unit called "Ground Floor E") and EUR 106.810,63 (value attributed to "5 D" and "5 E"), as per copy of the Urban Property Registration Booklet, attached with the petition (doc. no. 5).
6.1.11. The Claimant was notified of the payment notices for payment of the three installments relating to the Stamp Duty assessment (whose assessments that gave rise to it are dated 22 March 2013), relating to the year 2012 (whose payment deadline was, respectively, "April/2013", "July/2013" and "November/2013"), relating to the above identified property (see points 6.1.1. and 6.1.2.), as per copies of the respective payment documents attached with the petition (docs. no. 19 to 50) [the amounts are expressed in Euro (EUR)]:
IDENTIFICATION OF STAMP DUTY ASSESSMENT PAYMENT NOTICES FOR THE YEAR 2012
[Table of payment notices for 2012 with similar structure as 2011 table, showing Ground Floor through 5 E with respective VPT, Collection amounts, and Installment payments]
TOTAL: 1.087.414,15 - 10.874,16
6.1.12. For purposes of determining the incidence of Stamp Duty of item 28 on diverse autonomous parts of the property (above identified), was considered by the Respondent (i) the totalization of the VPT of all units or floors susceptible of independent use with residential use (which amounted, on 31 December 2012, to EUR 1.087.414,15, that is, was higher than EUR 1.000.000,00) and (ii) the residential use of the said autonomous parts.
6.1.13. For purposes of tax assessment, the Respondent applied the rate of 1% of Stamp Duty on the individual VPT of each of the fractions intended for habitation above identified in point 6.1.11.
6.1.14. The Claimant made the payment of the assessment payment notices identified in point 6.1.11., above, on 26 April 2013, 17 July 2013 and 27 November 2013, respectively, as per copies of the respective banking transfer documents "…", attached with the petition.
6.1.15. The Claimant submitted, on 5 April 2016, a petition for revision of the tax assessment acts of Stamp Duty relating to the years 2011 and 2012, relating to the above identified payment notices (see point 6.1.5 and 6.1.11.).
6.1.16. The Respondent did not pronounce itself regarding this petition for revision of a tax act, whereby the Claimant legally presumed, on 5 August 2016, the express refusal of the same.
6.2. No other facts were proven capable of affecting the decision on the merits of the petition.
Of the unproven facts
6.3. As concerns the tax assessments relating to the year 2012, the nature (services or residential) of the unit susceptible of independent use identified as "Ground Floor E" was not unequivocally proven.
6.4. No other facts were verified as unproven with relevance to the arbitral decision.
7. MATTER OF LAW
7.1. In the case under analysis, having the exceptions raised by the Respondent been judged unfounded (see Chapter 4 of this Decision), and this Arbitral Tribunal having been considered competent to know the arbitral petition presented, it is now necessary to proceed to the analysis of the factual matters given as proven so as to assess the (il)legality of the act of express refusal of the petition for revision of the Stamp Duty assessment acts identified, relating to the years 2011 and 2012, as well as to assess the (il)legality of the Stamp Duty assessments relating to those two years.
7.2. In this compliance, for purposes of the above stated in the previous point, it will be important to provide an answer to the following disputed matter of law (underlying the Petition for Arbitral Pronouncement):
7.2.1. Is the subjection to Stamp Duty, in accordance with what is provided in item no. 28.1 of the TGIS, determined by the VPT that corresponds to each one of the parts of the property with residential use or if, on the contrary, it is determined by the global VPT of the property, which would correspond to the sum of all the VPT's of the floors (with that type of use), which form part of it?
7.3. In this regard, the Claimant defends that "in properties in the regime of full ownership with floors susceptible of independent use, as own patrimonial values, the arithmetic sum of those values is not admissible in order to reach the VPT of € 1.000.000,00 or higher, to apply item 28.1 of the table attached to the Stamp Duty Code".
7.4. On the other hand, the Respondent understands that the assessments impugned constitute "(…) a correct application of law to the facts", and "the provision of item 28.1 of the TGIS does not constitute any violation of the principle of equality, with no discrimination existing in the taxation of properties constituted in horizontal ownership and properties in full ownership with floors or units susceptible of independent use, or between properties with residential use and properties with other uses".
7.5. Now, for purposes of responding to the question above stated in point 7.2.1., it will be important to analyze the changes arising from Law no. 55-A/2012, of 29 October (that is, the addition to the TGIS of item 28) because that diploma "introduced a set of changes in the codifying statutes of three taxes – Personal Income Tax, Corporate Income Tax and Stamp Duty – as well as in the General Tax Law, among which the rule under analysis, all guided by the obtaining of supplementary fiscal revenue and, in general, to counteract budgetary imbalance". [20][21]
7.6. Indeed, in 2012, "invoking the principles of social equity and fiscal justice, the taxation of capital income and mobile capital gains was aggravated (…)", having been introduced "(…) measures to strengthen the fight against tax fraud and evasion (…) to which was added the introduction, in the context of Stamp Duty, of the taxation of legal situations (…), which was understood to be capable of supporting increased fiscal burden, thereby distributing more equitably the sacrifice to achieve the budgetary consolidation required of taxpayers" (underlined).[22]
7.7. And if there were any doubts as to the alleged unconstitutionality of item 28 of the TGIS, for alleged violation of the principles of proportionality, equality and contributive capacity, the Constitutional Court pronounced itself, namely, in the context of the Decision of 11 November 2015 (process no. 542/14), in the terms of which it decided "(…) not to judge as unconstitutional the norm of item 28 and 28.1 of the General Table of Stamp Duty, added by article 4 of Law no. 55-A/2012, of 29 October, to the extent that it imposes annual taxation on the ownership of urban residential properties, whose patrimonial value is equal to or greater than € 1.000.000,00", "there being no verification of violation of constitutionality parameters (…), nor any others (…)" (underlined).[23][24]
7.8. Indeed, and as regards the principle of tax equality and contributive capacity, that Court dispels the "fog" of unconstitutionality, because:
7.8.1. "As was seen, the legislative alteration had as its purpose to broaden the taxation of assets, making it fall more intensely on the ownership that, by its value substantially higher than (…) that of the generality of urban residential properties, reveals greater indicators of wealth and, as such, is susceptible of grounding the imposition of increased contribution for public account sanitation to its holders, in realization of the stated principle of social equity in austerity" (underlined).
7.8.2. On the other hand, that Decision further clarifies that "the constitutional principle of tax equality (…) finds concretion in the generality and uniformity of taxes", and that "generality means that all citizens are subject to the payment of taxes (…)" [continues in truncated text]
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