Summary
Full Decision
ARBITRAL DECISION
- REPORT
1.1. A..., S.A., taxpayer no..., hereinafter referred to as the Claimant, filed on 25/09/2015 a request for arbitral ruling, in which it requests the annulment of "...additional assessment no. 2015 ... (...) relating to Stamp Tax for the year 2014, in the total amount of € 9,436.42...".
1.2. The Honorable President of the Ethics Council of the Administrative Arbitration Center (CAAD) appointed Francisco Nicolau Domingos as arbitrator on 23/11/2015.
1.3. The arbitral tribunal was constituted on 09/12/2015.
1.4. In compliance with the provision of article 17, no. 1 of Decree-Law no. 10/2011 of 20 January (RJAT), the Respondent was notified on 10/12/2015 to, if it so wished, present a response and request the production of additional evidence.
1.5. On 05/01/2016 the Respondent presented its response, in which it invoked the exception of res judicata and attached the arbitral decision rendered in case no. 334/2015-T.
1.6. The tribunal, faced with such exception, on 12/01/2016 invited the Claimant to pronounce on the same.
1.7. The Claimant, duly notified on 12/01/2016, made no response.
1.8. The tribunal on 18/04/2016 dispensed with the holding of the meeting referred to in article 18, no. 1 of the RJAT, on the grounds of the principle of autonomy of the arbitral tribunal in conducting the proceedings and in determining the rules to be observed with a view to obtaining, within a reasonable period, a ruling on the merits of the claims formulated, see article 16, para. c) of the RJAT, and also determined that the parties, if they so wished, present written pleadings and set a date for the rendering of the final decision.
- SUBJECT MATTER OF THE DISPUTE
The Claimant argues, in summary, that the "...additional assessment no. 2015 ... ..." is illegal, because if article 6 of the CIMI results in a clear distinction between urban residential properties and land for construction, the latter cannot be considered, for the purposes of the incidence of Stamp Tax.
For this reason, it ends by requesting the annulment of the "...assessment mentioned above".
For its part, the Respondent argues that the request for arbitral ruling is aimed at the annulment of the notice of collection no. 2015..., relating to the 2nd installment of Stamp Tax – item 28 – for the year 2014. It also alleges that the Claimant, following the notification for payment of the 1st installment of the same assessment, had already filed a request for arbitral ruling and that this gave rise to case no. 334/2015-T, in which there is a final decision that rules "...the claim filed by the Claimant to be unfounded, deciding to maintain in the legal order the Stamp Tax assessment act...".
Therefore, it believes that we are not in the realm of the institute of subsequent uselessness of the dispute, but of lis pendens, already consolidated in res judicata.
- FACTUAL MATTER
3.1. Facts considered to be proven
3.1.1. On 31 December 2014, the Claimant was the owner of the property corresponding to the land registration no..., urban, parish of..., municipality of Figueira da Foz, registered as land for construction and with a tax property value (VPT) of € 2,830,928.91.
3.1.2. The Stamp Tax assessment for the property in 2014 was € 28,309.27.
3.1.3. The Claimant requested the annulment of the "...additional assessment no. 2015..., dated 20.03.2015 (...) in the total amount of € 9,436.42...".
3.1.4. The Claimant had filed a request for the constitution of an arbitral tribunal with the Administrative Arbitration Center (CAAD), regarding the 1st notice of collection of the assessment described in 3.1.2. above.
3.1.5. Such request gave rise to case no. 334/2015-T, in which there is an arbitral decision that ruled "...the claim filed by the Claimant to be unfounded, deciding to maintain in the legal order the act...".
3.2. Facts not considered proven
There are no facts relevant to the arbitral decision that have not been given as proven.
3.3. Reasoning of the factual matter considered proven
The factual matter given as proven has its origin in the documents attached to the case file and whose authenticity was not put in question.
- PRELIMINARY ISSUE
The Respondent defends itself in its response by invoking the exception of res judicata.
However, the tribunal must ex officio consider the dilatory exceptions provided for in article 16 of the Code of Procedure and Tax Proceedings (CPPT) and in articles 577, para. a) and 578, both of the Civil Procedure Code (CPC), applicable by virtue of article 29, no. 1 of the RJAT.
Thus, it is imperative to consider from the outset the tribunal's competence to assess the Claimant's claim.
In this regard and in annotation to article 16 of the CPPT, legal doctrine maintains that: "Matters of absolute competence are within the tribunal's ex officio knowledge and such knowledge precedes any other question (...). Thus, incompetencies on the grounds of subject matter and hierarchy in judicial proceedings must be known ex officio, preceding the consideration of any other questions and may be raised by interested parties..."[1].
Consequently, it is necessary to apply the relevant regulatory framework, namely the RJAT. More specifically, article 2, no. 1 of the RJAT provides that: "The competence of arbitral tribunals comprises the consideration of the following claims: a) The declaration of illegality of acts of tax assessment, self-assessment, withholding at source and payment on account; b) The declaration of illegality of acts establishing the taxable matter when it does not give rise to the assessment of any tax, of acts determining the taxable matter and of acts establishing tax property values;".
Moreover, article 97, no. 1 of the CPPT provides that: "The tax judicial proceeding comprises: a) The challenge of the assessment of taxes, including parafiscal taxes and acts of self-assessment, withholding at source and payment on account;".
The first conclusion to be drawn is that the claim for a declaration of illegality of assessment acts may be the subject of judicial challenge or, alternatively, of a request for arbitral ruling.
However, can the notice of collection of the 2nd installment relating to the Stamp Tax assessment for 2014 be the subject of a request for arbitral ruling?
To answer this question, it is important from the outset to clarify the concept of assessment in order to determine the tribunal's competence.
To illustrate this concept, VÍTOR FAVEIRO[2] taught: "...it is an administrative act, applying the rule of incidence and its corresponding tax rate to the taxable matter previously or supposedly determined; the arithmetic expression of the pecuniary value of the corresponding tax obligation, and its imputation to the taxpayer; and the declaration, substantive and formal, of such operation and its notification to the taxpayer, with definitive and executory effects of actual obligation of the taxpayer and subjective right of credit of the State". In this vein, BRAZ TEIXEIRA adds: "It is necessary not to confuse periodic payments, which, although carried out by successive acts, at different times, have their origin in the same obligation and constitute the various portions of the same payment that was divided, with payments that must be made periodically, not due to a division of the total payment, but rather due to the periodic birth of new obligations, by the permanence of the factual requirements for taxation".[3]
Now, these definitions share a common denominator, namely that there will be a single assessment for each tax event, through which the amount of the tax will be determined. Consequently, if this is the case, each assessment can be the subject of a single challenge.
Within the Stamp Tax Code (CIS) it is possible to see what was stated above in article 23, no. 7 by providing that: "In the case of tax due for the situations provided for in item no. 28 of the General Table, the tax is assessed annually, in relation to each urban property, (...) applying, with the necessary adaptations, the rules contained in the CIMI". Article 113, no. 1 of the CIMI provides that: "The tax is assessed annually..." and no. 2 adds that: "The assessment referred to in the preceding number is made in the months of February and March of the following year".
In this way, the fact that the assessment can be paid in installments does not mean that, as a rule, several assessments have been made. To be precise, the assessment is single and, if this is the case, can only support a single claim for challenge[4].
Applying this interpretation to the present case, it is important to determine what the subject of the challenge was. In this regard, the Claimant wrote "...additional assessment no. 2015 ... (...) relating to Stamp Tax, for the year 2014, in the total amount of € 9,436.42...", whereby such intention allows one to maintain that it seeks the annulment of the 2nd installment of the notice of collection.
Now, it is clear that the Claimant subsumes the 2nd tax installment to an assessment, because if this were not the case, it would not have made any reference to the amount of the 2nd installment of the Stamp Tax assessment and to the number of the consequent notice of collection.
However, one could always raise the question of inviting the Claimant to correct the request for arbitral ruling. We believe this does not occur, because, in the first place, while the tribunal can accept corrections regarding the amount of the process, the same cannot happen with respect to the very act that is the subject of the request, and that, in the present case, refers to the 2nd installment of Stamp Tax for 2014. In this regard, case law states in the arbitral decision rendered in case no. 741/2014-T, in which the president-arbitrator JORGE LOPES DE SOUSA served: "...corrections to the procedural documents referred to in subparagraph c) of no. 1 of article 18 must be understood as concerning their lack of suitability for assessing the legality of the act that is the subject of the request for arbitral ruling and no other, such possibility not extending to the replacement of the act that is the subject of the request. Certainly, the possibility of correction will be covered by deficiencies in the identification of the act that the Taxpayer challenged, such as error in the indication of its number or its date or the amount of the assessment, as these will be cases where the correction does not involve the replacement of the act that is the subject of the proceeding, merely aiming to make clear the expression of the Taxpayer's will to challenge it. But, different from corrections of that type will be cases in which the act that was the subject of the request for arbitral ruling is perfectly identified and there was no error whatsoever in the expression of the Taxpayer's will".
For this reason, if the Claimant's intention consisted in challenging the 2nd installment of Stamp Tax for 2014, as results from the procedural document, any alteration became impossible.
Consequently, the act underlying the request for arbitral ruling does not constitute acts of tax assessment described in article 2, no. 1, para. a) of the RJAT, whereby the tribunal is materially incompetent, a dilatory exception that is declared, in accordance with the provision in article 16, no. 1 of the CPPT, which determines the absolution of the Respondent from the instance, see article 99, no. 1 and article 576, no. 2 of the CPC, applicable via article 29, no. 1 of the RJAT.
Article 608, no. 2 of the CPC, applicable by virtue of article 29, no. 1, para. e) of the RJAT provides that: "The judge must resolve all questions submitted by the parties for his consideration, except those whose decision is prejudiced by the solution given to others;...".
Thus, the recognition of the tribunal's incompetence due to the autonomous unchallengeable nature of Stamp Tax installments renders useless the assessment of the exception invoked by the Respondent, and also makes impossible the assessment of the merits of the case.
- DECISION
In these terms and with the reasoning described above, it is decided to recognize the tribunal's absolute incompetence and, consequently, to absolve the Respondent from the instance, with all legal consequences.
- VALUE OF THE CASE
Although the Claimant specified the assessment by the notice of collection of the 2nd installment of Stamp Tax for 2014 and from item 28.1 of the General Table of Stamp Tax (TGIS), the truth is that the economic usefulness of the request is determined by the value of the assessment, as established in article 97-A of the CPPT, applicable by virtue of the provision in article 29, no. 1 of the RJAT. Consequently, if such value is € 28,309.27, as determined, that must be the amount to be considered for determining the value of the case.
However, against such a position one could still argue that this value does not correspond to that which the Claimant delimited as the subject matter of the case. However, the tribunal must consider all elements in the case file, see article 308 of the CPC, applicable by referral of article 29, no. 1 of the RJAT. Thus, if it appears in the case that the amount of the Stamp Tax assessment is € 28,309.27, that is the value the tribunal must consider to determine the economic usefulness of the request.
For such a sum of reasons, the value of the case is fixed at € 28,309.27, in accordance with article 97-A of the CPPT, applicable by virtue of the provision in article 29, no. 1, para. a) of the RJAT and article 3, no. 2 of the Regulation of Costs in Tax Arbitration Proceedings (RCPAT).
- COSTS
Costs to be borne entirely by the Claimant, in the amount of € 1,530, see article 22, no. 4 of the RJAT and Table I attached to the RCPAT.
Notify.
Lisbon, 7 June 2016
The Arbitrator,
(Francisco Nicolau Domingos)
[1] JORGE LOPES DE SOUSA, Code of Procedure and Tax Proceedings – annotated, 4th edition, Vislis Editors, 2003, p. 141.
[2] The status of the taxpayer. The person of the taxpayer in the Social State of Law, Coimbra Editor, 2002, p. 683.
[3] Principles of Tax Law, volume I, 3rd edition, Almedina, 1993, p. 244, footnote 3.
[4] See in this sense the arbitral decision rendered in case no. 346/2015-T, in which Master MARIANA VARGAS served as arbitrator, and the one regarding case no. 736/2014-T, in which Master MARCOLINO PISÃO PEDREIRO served as arbitrator.