Stamp Tax on Vertical Property: CAAD Ruling on Verba 28 TGIS Illegality (650/2015-T)

ARBITRAL DECISION

I. REPORT

1. A.... (hereinafter "Claimant"), with tax identification number ("NIF")…, with registered address at Rua da…, no. … –..., parish of…, municipality of Lisbon, presented, on 26 October 2015, in accordance with the combined provisions of Articles 2 and 10 of Decree-Law no. 10/2011, of 20 January, i.e., the Legal Framework for Tax Arbitration ("LFT"), a petition for the constitution of an arbitral tribunal, in order to have declared illegal the 2nd instalments of the Stamp Duty assessment ("SD"), listed below, by reference to the year 2014, in the total amount of €3,838.22, with the Tax and Customs Authority being the defendant (hereinafter "Respondent" or "TA"):

A) Constitution of the Arbitral Tribunal

1. In accordance with the provisions of paragraph (a) of Article 6, paragraph 2 and paragraph (b) of Article 11, paragraph 1, of the LFT, the Ethics Council of this Administrative Arbitration Center ("AAAC") appointed the undersigned as sole arbitrator, who communicated acceptance of the appointment within the applicable period, and notified the parties of this appointment on 23 December 2015.

2. Thus, in accordance with the provisions of paragraph (c) of Article 11, paragraph 1, of the LFT, and by communication from the Chairman of the Ethics Council of the AAAC, the Sole Arbitral Tribunal was constituted on 11 January 2016.

B) Procedural History

1. In the petition for arbitral decision, the Claimant petitioned for a declaration of illegality of the SD assessments mentioned above (corresponding to the 2nd instalment), relating to the year 2014, by reference to an urban property in vertical property regime, located at Rua…, nos. … to…, parish of…, municipality of Lisbon.

2. The TA submitted a response, petitioning for dismissal of the petition for arbitral decision, on the grounds that i) the arbitral tribunal would be incompetent (ratione materiae) for this purpose, as the object of the present arbitral decision was not challengeable (in arbitral proceedings); and that ii) regarding the tax act in question there was already a prior decision that had become final and binding, thus establishing the supervening futility of the dispute.

3. By order of 15 April 2016, the Sole Arbitral Tribunal, under the provisions of paragraph (c) of Article 16 of the LFT, decided, without opposition from the parties, that there was no need to hold the hearing referred to in Article 18 of the LFT, as a result of the simplicity of the matters in question, as well as because it considered that it had at its disposal all the necessary elements to reach a clear and impartial decision.

4. It likewise decided, in accordance with Article 18, paragraph 2, of the LFT, that oral argument was not necessary, as the positions of the parties were clearly defined in their respective pleadings, and set 15 May 2016 as the deadline for the arbitral decision.

5. Within the scope of the order, it also requested the parties to submit their final arguments. In this regard, it is important to note that both the Claimant and the Respondent chose not to make any submissions.

6. The Tribunal was regularly constituted and is competent to assess the matters indicated (Article 2, paragraph 1, paragraph (a) of the LFT); the parties have legal personality and capacity and have full legitimacy (Articles 4 and 10, paragraph 2 of the LFT and Article 1 of Ordinance no. 112-A/2011, of 22 March). No nullities occur, and therefore nothing prevents judgment on the merits.

7. The present proceedings are thus in a position for a final decision to be rendered.

II. QUESTION TO BE DECIDED

1. The fundamental question to be assessed and decided regarding the merits of the case, as derived from the procedural documents of the parties (after the TA tacitly acknowledged, in its response, that the SD assessments, as illustrated above, were illegal), concerns only the following: shall the exceptions i) of non-challengeability of the act being challenged, and, likewise, ii) of supervening futility of the dispute, apply as the TA suggests, regarding the assessments that the Claimant seeks to challenge?

2. In this sense, should the present tribunal come to consider that it is incompetent, ratione materiae, in accordance with Article 2 of the LFT, it shall necessarily have to refrain from assessing the respective petition for arbitral decision.

3. In parallel, and should supervening futility of the dispute be established, in accordance with Article 277 of the Code of Civil Procedure ("CCP"), it remains only to decide, in accordance with the applicable legislation, who shall bear the burden of the judicial costs relating to the present proceedings.

III. DECISION ON MATTERS OF FACT AND ITS JUSTIFICATION

1. Having examined the documentary evidence produced, the tribunal finds proven, with relevance for the decision of the case, the following facts:

I. The Claimant is the owner of an urban property in vertical property regime, located at Rua…, no. … to…, parish of…, municipality of Lisbon, registered in the urban property register of the said parish, under item…, whose Taxable Property Value ("TPV") is €1,632,740 (of which €1,151,480 relates to fractions with residential use).

II. The Claimant received, with respect to the tax year 2014, and as a result of what is stated in Item no. 28 of the General Stamp Duty Table ("GSDT"), the assessment notices from the TA, mentioned above, in the total amount of €3,838.22, which it has already paid.

III. The Claimant had already submitted a petition for arbitral decision, by reference to the 1st instalment of SD, within the scope of the said assessments. In this sense, granting of its petition was made on 18 January 2016, after the constitution of the present tribunal.

1. The Tribunal's conviction regarding the facts found proven resulted from the documents attached to the file and contained in the petition and unchallenged submissions of the parties, as specified in the matters of fact points set out above.

2. There is no factual matter relevant to the decision of the case found to be unproven.

IV. ON THE LAW

A) Legal Framework

1. Taking into account the subject matter under discussion in the present proceedings, it is important, first of all, to set out the rules that make up the relevant legal framework, at the date of occurrence of the facts.

2. First, it should be noted that, notwithstanding the Claimant's claim, the Respondent appears to have demonstrated, in the view of this tribunal, that it accepts the illegality of the contested assessments, and therefore it remains only to assess whether the exceptions raised by the Respondent shall potentially apply, and for this it is necessary to specify the connected legal framework.

3. Thus, Article 2 of the LFT establishes the scope of competence of arbitral tribunals, as follows:

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

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

b) declaration of illegality of acts establishing taxable matter when this does not give rise to the assessment of any tax, acts determining taxable base and acts establishing property values.

2 - Arbitral tribunals decide in accordance with established law and are prohibited from resorting to equity".

1. In parallel, the article that governs the item in question in the Stamp Duty Code is Article 23, paragraph 7, concerning the assessment of SD, which provides the following: "where the tax is 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, by the central services of the Tax and Customs Authority, applying, with the necessary adaptations, the rules contained in the Municipal Property Tax Code".

2. Attention should also be paid to Article 89, paragraph 1 of the Code of Administrative Court Procedure ("CACP"), applicable by virtue of Article 29, paragraph 1, paragraph (c) of the LFT, which prevents the assessment of the merits of cases in the following situations:

"1 - For the purposes of the provisions of the previous articles, the following in particular prevent continuation of proceedings:

a) Defectiveness of the petition;

b) Lack of legal personality or capacity of the claimant;

c) Non-challengeability of the act being challenged;

d) Lack of standing of the claimant or defendant;

e) Illegality of the joinder;

f) Failure to identify interested parties;

g) Illegality of cumulation of claims;

h) Lapse of the right of action;

i) Lis pendens and res judicata".

1. On the other hand, considering the second exception raised by the Respondent, attention should be paid to the CCP, which establishes, in its Article 277, the causes for termination of proceedings:

"Proceedings are terminated by:

a) Judgment;

b) Arbitration agreement;

c) Default;

d) Withdrawal, admission or settlement;

e) Supervening impossibility or futility of the dispute".

1. Furthermore, and since the central question of the present case may, in the final analysis, be reduced to deciding who shall bear the burden of costs, once the TA, as previously set out, has already accepted the illegality of the previously listed assessments, we shall now set out Article 536 of the CCP:

"1 - Where the claim of the claimant or applicant or the objection of the defendant or respondent was well-founded at the time it was made but ceased to be so due to circumstances beyond their control, costs shall be divided equally between them.

2 - An alteration of circumstances beyond the parties' control is considered to have occurred when:

a) The claim of the claimant or respondent or objection of the defendant or applicant was based on a legal provision that was subsequently altered or repealed;

b) When there is a reversal of the jurisprudence on which the claim of the claimant or applicant or objection of the defendant or respondent was based;

c) When prescription or amnesty occurs in the course of proceedings;

d) When, in enforcement proceedings, the property that would have served as security for creditors has been dissipated due to a fact beyond the control of the executed party;

e) When it is an action to satisfy pecuniary obligations and the insolvency declaration of the defendant or executed party subsequently occurs, provided that, as of the date of filing the action, such insolvency was not foreseeable to the claimant.

3 - In other cases of termination of proceedings due to supervening impossibility or futility of the dispute, responsibility for costs shall lie with the claimant or applicant, unless such impossibility or futility is attributable to the defendant or respondent, in which case the latter is responsible for all costs.

4 - It is considered, in particular, that supervening futility of the dispute is attributable to the defendant or respondent when it results from voluntary satisfaction, by the latter, of the claim of the claimant or applicant, outside the cases provided for in paragraph 2 of the previous article and unless, in case of settlement, the parties agree on the distribution of costs".

B) Arguments of the Parties

1. The Claimant came to argue, in summary, that "the assessments (…) relate to floors of a residential nature of an urban property not subject to the horizontal property regime, that is, in vertical property regime (…)".

2. Now the Claimant considers that "each of the floors is capable of independent economic use and had its taxable property value determined separately by the Tax and Customs Authority, in accordance with the rules established in the Municipal Property Tax Code ("MPTC")", and that the TPV of each of these properties is less than €1,000,000.

3. For the Claimant, "… the property value relevant for purposes of SD taxation is that used for purposes of Municipal Property Tax – Municipal Property Tax.

Now, the MPTC treats each unit individually, considering each floor as an autonomous and independent dwelling.

By force of the concept of each floor as an economic unit with capacity for autonomous use, all floors, even those of properties in vertical property regime, have become the subject of assessment, description and separate registration in the property register".

1. The Claimant thus considers that "for purposes of Municipal Property Tax each floor has an autonomous and distinct property value", and therefore, in its view, "only residential floors capable of separate use of an urban property in vertical property regime with property value exceeding one million euros are capable of falling within the provision of the cited rule".

2. Before concluding its petition, the Claimant alerts to the fact that it may cumulate its petition (i.e., cumulate various SD assessments), in accordance with Article 104 of the Code of Tax Procedure and Process ("CTPP").

3. The Claimant thus requests a decision on the illegality of the said assessments, proceeding with their annulment and subsequent restitution of the amount already paid, plus compensatory interest, in accordance with Article 43 of the General Tax Law ("GTL") and Article 61 of the CTPP.

4. Finally, it also listed a witness for the present proceedings, B…, with professional address at Rua…, no.…, …-… Lisbon.

5. For its part, the Respondent, after being duly notified of this, submitted its response in which it argued that "the arbitral tribunal is materially incompetent, given the provisions of Article 2 of the LFT, to assess the legality of an instalment of an assessment act, which is not in itself any tax act, there being no doubt whatsoever, even by the value of the case and by all the documents attached to it, that the Claimant challenges exclusively the collection notices that constitute the 2nd instalments of the tax relating to the property in question".

6. For this purpose, the Respondent relies on the decision issued within the scope of case no. 726/2014-T, in which it was established that "each of the instalments of the SD assessments identified in the file not being autonomously challengeable, for the reasons previously set out, we are in a case of incompetence of the arbitral tribunal for assessment and declaration of their illegality and consequent annulment".

7. Additionally, the Respondent also raised supervening futility of the dispute.

8. Indeed, the Respondent came to call attention to the fact that, through the Arbitral Decision of 18 January 2016, the Claimant obtained a favourable decision on its arbitral petition, "determining in that same arbitral decision the return of the amounts unduly collected, as well as recognising the right to compensatory interest in favour of the Claimant".

9. In that sense, the Respondent considers that the Claimant's claim is satisfied, as the purpose intended with the present arbitral proceedings is fully satisfied, and therefore supervening futility of the dispute exists.

10. The Respondent thus concludes its response, requesting that the exception raised of the material incompetence of the Arbitral Tribunal be upheld, and that it be absolved of the proceedings.

11. Failing this, "the present petition for arbitral decision should be terminated due to supervening futility of the dispute (…) and the Claimant condemned to pay the costs of the proceedings".

C) Assessment by the Tribunal

1. First, it is incumbent on this tribunal to make a preliminary note.

2. This is because it is important to emphasise that the question that is relevant to the outcome of this proceedings does not concern the scope of application of Item no. 28 of the GSDT, that is, which properties this item applies to.

3. Indeed, on this matter the present tribunal is in full agreement with the arguments put forward by the Claimant.

4. Moreover, this has been the generalised understanding of arbitral tribunals.

5. However, this tribunal cannot fail to address the true question that is at issue here (especially because the question mentioned above has already been validated by the Respondent).

6. Thus, this tribunal shall assess whether instalments relating to an SD assessment, contained in the collection notices, may be considered autonomously as tax assessment acts? Or, alternatively, are we, as the TA argues, faced with an exception of non-challengeability of the act being challenged?

7. Additionally, and should it be found that the present tribunal is competent to assess the petition, it shall also assess whether, by force of arbitral decision no. 448/2015-T, we may be faced with the establishment of supervening futility of the dispute, in the terms referred to by the TA?

8. To substantiate its decision, the present tribunal shall rely on some arbitral decisions that have become final, notably arbitral decision no. 726/2014-T, of 10 March (mentioned by the Respondent), which, by its relevance, is set out below.

9. "Another of the exceptions raised by the TA is that of incompetence of the arbitral tribunal to decide the dispute, on the ground that 'the Claimant does not challenge a tax act, but instead challenges the payment of an instalment of a tax act contained in a collection notice', that is, that 'the object of the proceedings is the annulment not of a tax act, but rather of a collection notice for payment of the 2nd instalment of a tax, a matter which is not at all part of the set of the norm that delimits the competence of tax arbitral tribunals, contained in article 2 of the LFT'. The competence of tax arbitral tribunals functioning under the AAAC is fixed by Articles 2, paragraph 1, and 10, paragraph 1, of the LFT.

Specifically, Article 2, paragraph 1, paragraph (a) of the LFT states that such competence comprises the assessment of claims relating to declaration of illegality of acts of tax assessment, self-assessment, withholding at source and payment on account, while paragraph (a) of paragraph 1 of its Article 10 establishes the 90-day period for submission of the petition for constitution of the tribunal, 'counted from the facts provided for in paragraphs 1 and 2 of Article 102 of the Code of Tax Procedure and Process, as to acts capable of autonomous challenge and, likewise, from notification of the decision or the end of the legal period for decision of hierarchical appeal'.

To determine the competence of the arbitral tribunal to decide the claim that is the object of the present file shall necessarily involve ascertaining whether the petition for declaration of illegality and consequent annulment of one of the instalments of a Stamp Duty assessment, carried out under item 28 of the GSDT, is equivalent to a petition for annulment, total or partial, of the same assessment or, not being equivalent, whether one of those instalments may constitute an act capable of autonomous challenge.

As to the first question, it may be stated that an instalment is not equivalent to a tax assessment, in as much as, under paragraph 7 of Article 23 of the Stamp Duty Code, in the wording given by Article 3 of Law no. 55-A/2012, of 29 October, '7 - Where the tax is 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, by the central services of the Tax and Customs Authority, applying, with the necessary adaptations, the rules contained in the Municipal Property Tax Code'.

Now, the expression 'the tax is assessed annually' indicates that a single annual assessment is made, although the same may be divided, for payment purposes, into instalments, and not as many assessments as there are instalments in which the debt must be satisfied – the division of an assessment into instalments shall thus be no more than a mere revenue collection technique.

On the other hand, the question of whether an instalment may be regarded as an autonomously challengeable part of the assessment refers us to that of divisibility of the tax assessment act and the resulting possibility of its partial annulment.

In this regard, jurisprudence has understood that an assessment is a divisible act, both by nature, as it relates to an obligation of a pecuniary nature, and by legal definition, as Article 100 of the General Tax Law ("GTL") admits 'total or partial success of complaints or administrative appeals, or of judicial proceedings in favour of the taxpayer', a situation in which the tax administration is obliged to 'immediately and fully restore the situation that would have existed if the illegality had not been committed, including the payment of compensatory interest, in accordance with the terms and conditions provided by law'.

However, for there to be partial annulment of the tax act, it is necessary that the illegality affects it only in part (cfr., in this sense, the Decision of the Plenary of the Tax Disputes Section of the Supreme Administrative Court, issued on 10 April 2013, in (…) in whose summary it is stated: 'Summary: I - The tax act, as a divisible act, both by nature and by legal definition, is capable of partial annulment. II - The criterion for determining whether the act should be wholly or partially annulled is to determine whether the illegality affects the tax act as a whole, in which case the act must be wholly annulled, or only in part, in which case partial annulment is justified'.

Thus, in cases where the tax act is divisible, 'if partial annulment of a tax act is requested, the tribunal may not, as a general rule, annul it wholly'; if its full annulment is requested and the act is only partially annullable, the petition shall be partially unsuccessful.

On the question of indivisibility of a Stamp Duty assessment referred to in item 28 of the GSDT, the AAAC has already spoken, in case no. 205/2013-T, as stated in the extract set out below: '11. The Respondent also challenges the value of the case considering it to be €8,940.94 and not €28,822.80, as indicated by the Claimant.

The Claimant argues that 'the act being challenged in this case is the assessment act with no. ... of 22/02/2013, relating to the first instalment of stamp duty, for the year 2012, in the amount of €8,940.94, attached by the applicant to the petition for arbitral decision as Doc.1'.

However, the value of the assessment no. ... of 22/02/2013, as shown in the said document is, in reality, €26,822.00 and not €8,940.94. It should be noted that there is no assessment of €8,940.94. This amount is only the first instalment of an assessment which was made from the outset in the amount indicated by the Claimant.

From the fact that the value of the assessment may be paid in several instalments, it does not follow that there are three assessments. It is, differently, an assessment that may be paid in several instalments (emphasis ours), and the taxpayer is not prevented from challenging the same due to the fact that only the period for payment of one of them has elapsed.

The taxpayer challenged the assessment act with no. ... of 22/02/2013, in the amount of €26,822.00, which had been notified to it, and this is the correct value of the case'.

The arbitral case no. 120/2012-T (…) and from which the following fragments are extracted, had also already spoken on the indivisibility of a Municipal Property Tax assessment, a matter of subsidiary application to Stamp Duty assessments of item 28 of the GSDT, by referral from paragraph 2 of Article 67 of the Stamp Duty Code: 'In accordance with the provisions of Article 113, paragraph 2 of the Municipal Property Tax Code, the assessment of this tax is made in February and March of the year following the year to which the tax relates.

Under paragraph 1 of Article 120 of the same diploma, the tax must be paid in two instalments, in April and September, provided that its amount exceeds 250 euros, the payment, where that amount equals or is less than that limit, being made once, in April (…) as is thus clear from the provisions of the said articles, although the autonomously reviewable act is the Municipal Property Tax assessment act (emphasis ours), the period for contesting its legality shall only be counted from the end of the payment period of the tax assessed in it.

This being required by law to be paid, where applicable, in more than one instalment, only with the end of the last of those (naturally assuming that situations of early maturity do not occur) is the period referred to in Article 102, paragraph 1, paragraph (a) of the CTPP able to begin to be counted, applicable, in the scope of arbitral proceedings, ex vi the provisions of Article 10, paragraph 1, paragraph (a) of Decree-Law no. 10/2011, of 20 January (…)'.

(…) Such conclusion follows, moreover, clearly from the indivisible nature of the assessment act, as well as from the need – reiterated by the Respondent itself – that, regarding the same Municipal Property Tax assessment - which, under law must be paid in two instalments - contradictory administrative or judicial decisions should not be issued (…) For – let us reiterate – as none of the instalments of payment of Municipal Property Tax is autonomously reviewable – but only the assessment act to which they relate.

The payment instalments of a Municipal Property Tax assessment or, in the situation being analysed, of a Stamp Duty assessment, under Item 28 of the GSDT, are not autonomously reviewable, as they originate from a single annual obligation, according to the teaching of Braz Teixeira: 'it is necessary not to confuse periodic instalments which, although being carried out by successive acts, at different times, originate from the same obligation and constitute the various portions of the same instalment that has been split, with instalments that must be carried out periodically, not due to a division of the overall instalment, but rather due to the periodic birth, also, of new obligations, by the persistence of the factual assumptions of taxation'.

Concluding that the instalments of a tax assessment are not autonomously challengeable, as they constitute portions of an overall instalment, originating from the same obligation, it is necessary to ascertain whether one of those instalments may be considered as an 'act of autonomous challenge', referred to in Article 10, paragraph 1, paragraph (a) of the LFT, with referral to paragraphs 1 and 2 of Article 102 of the CTPP.

In annotation to Article 102 of the CTPP, and regarding paragraph (e) of its paragraph 1, which provides for the initial start date of the period for judicial challenge on the date of 'notification of other acts that may be the subject of autonomous challenge in accordance with this Code', Jorge Lopes de Sousa writes: '(…) this rule applies not only to cases of autonomous challenge provided for in this Code [decisions on hierarchical appeal that involve assessment of the legality of assessment acts (art. 76, paragraph 2), self-assessment acts (art. 131), withholding at source acts (art. 132) and property value determination acts (art. 134), but also to other cases of challenge of direct assessment acts (article 86, paragraph 1, of the GTL)'.

The fact that declaration of illegality of acts establishing taxable matter when this does not give rise to assessment of any tax, acts determining taxable base and acts establishing property values are included in the competence of arbitral tribunals, under Article 2, paragraph 1, paragraph (b) of the LFT, the petition for constitution of the tribunal being required to be presented within 30 days of the date of notification thereof, under Article 10, paragraph 1, paragraph (b) of the LFT, leads to the necessary conclusion that the acts of autonomous challenge referred to in Article 10, paragraph 1, paragraph (a) of the LFT are assessment acts, self-assessment acts and payment on account acts, although, as regards these, a complaint or hierarchical appeal has been presented, expressly or tacitly dismissed.

Having excluded the possibility of an instalment constituting a tax assessment act, all the less may it be attributed the nature of self-assessment or payment on account. As none of the instalments of the SD assessments identified in the file are autonomously challengeable, for the reasons previously set out, we are in a case of incompetence of the arbitral tribunal for assessment and declaration of their illegality and consequent annulment".

1. Indeed, notwithstanding the fact that, on several occasions, jurisprudence has expressed itself to the effect that tax assessment acts are divisible, as previously mentioned, it should be noted that such divisibility shall only be considered, for the purpose of a possible challenge of tax assessment acts, in cases where partial annullability is possible.

2. Now, despite the framework set out above, the present tribunal considers that the situation at hand has, naturally, various specificities that should likewise be considered, within the scope of this arbitral decision, for the purpose of guaranteeing its legitimacy.

3. First, it should be noted that, despite forcefully asserting that tax assessment acts are indivisible, the TA, upon issuing the notices for payment of SD, gives the taxpayer the option, should it wish to do so, to object, separately, to payment of the same (i.e., per instalment), recognising the divisibility and the autonomous challengeability of each of the tax assessment acts, in this case SD.

4. Indeed, in each of the said notices, it is possible to read "you may lodge a complaint or challenge the assessment in accordance with the terms and periods established in Articles 70 and 102 of the CTPP".

5. And, in this sense, notwithstanding the position it defends, the truth is that the Respondent itself has, within the scope of its actions in the Portuguese tax legal system, behaved as if tax assessment acts were capable of being divisible, in particular when they relate to SD.

6. Thus, what is to be said of the legitimate expectations formed by the taxpayer (and of its confidence in the TA), when the TA expressly states that the taxpayer is entitled to react, against each of the notifications, individually?

7. This is because, and it is especially important to emphasise, the taxpayer, in this case the Claimant, naturally assumes the autonomous character of each instalment, as an individual tax assessment act.

8. Let us pay attention, in this regard, to the words of Professor Rui Duarte Morais.

9. "Notifications must contain an indication of the means of challenge available against the act notified. And if such indication is wrong? We start by noting that this type of situation is somewhat common".

10. The Professor then questions whether in these cases it is justified "that the Court refrain from considering the matter and the taxpayer be obliged to submit such a complaint?"

11. Now in his understanding, such conduct is not necessary.

12. Indeed, "the complaint in question is, in essence, a form of judicial recourse. That is, if the dispute implies a judicial decision and the 'proceedings' have already been brought before the Court (albeit improperly, due to the Administration's error), there is no reason to restart the entire process from 'scratch'. Instead, it would be necessary to correct the procedural form used"[2].

13. Finally, it should also be mentioned that this perspective is supported by various arbitral decisions, in particular arbitral decision no. 618/2014-T, of 7 February, so often mentioned in this decision, which, by acknowledging independently the illegality of the 3rd instalment of SD, considering the respective challenge to be successful, naturally validated the possibility of SD assessments being divisible and, in that way, the instalments into which, as a rule, they are decomposed, being individually challenged.

14. Consider also, as an example, the arbitral decision issued in Case no. 757/2014-T, in which the taxpayer had requested challenge of the 2nd and 3rd instalments relating to the SD assessment act.

15. In that specific case, the respective tribunal acknowledged and declared in the same case that, as regards the SD assessment act, it would only annul the 3rd instalment, as, for the purposes of that initial petition, the petition relating to the 2nd instalment was already untimely (confirming, once more, that the autonomous challengeability of each of the instalments, individually considered, is legitimate).

16. From another perspective, the TA also makes reference to supervening futility of the dispute, as it considers that the present matter will have already been addressed in the arbitral decision relating to case no. 448/2015-T, of 18 January, requesting that the present arbitral tribunal refrain from pronouncing on the matter under analysis.

17. In this regard, it is necessary to recall that decisions constitute res judicata only in the precise limits and terms in which they judged, and therefore it is necessary to determine the true meaning and scope of the judgment (in this case, of the arbitral decision mentioned in the previous point).

18. Now according to Abílio Neto, "the limits of res judicata are traced by the identifying elements of the relationship or substantial legal situation defined by the judgment: the parties, the object and the source or constitutive title. On the other hand, attention must be paid to the terms of that definition (…) it has authority – it makes law – for any future proceedings, but only in exact correspondence with its content. It cannot, therefore, prevent discussion and resolution in new proceedings of that which it itself did not define".

19. In this sense, under Article 581 of the CCP, "the case is repeated when an action identical to another is brought as to the parties, the claim and the cause of action".

20. Now in the situation at hand, and despite the taxpayer being the same, the present tribunal considers that the other two requirements are not met (i.e., the claim and the cause of action are manifestly distinct).

21. And it should further be noted that, as of the date of submission of the petition for arbitral decision that gave rise to the present tribunal, 26 October 2015, the arbitral decision relating to case no. 448/2015-T had not yet been published (a fact which only occurred on 18 January 2015).

22. In that way, it is considered legitimate that, to safeguard its position, the Claimant likewise sought to obtain an arbitral decision regarding the instalments mentioned above.

23. Thus, in the opinion of the present tribunal, the exception of supervening futility of the dispute is not established.

24. In this context, and having regard to those questions that the present tribunal set out to decide, we are to uphold the Claimant's position and consequently find the present petition for arbitral decision to be successful.

25. Finally, it should be noted that, in the opinion of the present tribunal, there is no need to hear the witness listed for the proceedings by the Claimant.

V. DECISION

1. For these reasons, this Arbitral Tribunal decides:

A) To uphold the petition for arbitral decision and, in consequence, declare illegal and annul the SD assessment acts mentioned above, by reference to 2014, which resulted in tax payable in the amount of €3,882.22, in accordance with the provisions of Item no. 28 of the GSDT;

B) To condemn the Respondent, in accordance with Article 43, paragraph 1 of the GTL and 61, paragraphs 2 and 5 of the CTPP, to payment of compensatory interest, at the rate resulting from paragraph 4 of Article 43 of the GTL, calculated on the amount paid, from the date on which the aforementioned assessments were paid until full reimbursement of the mentioned amount; and

C) To condemn the Respondent to pay the costs of the proceedings.

VI. VALUE OF THE CASE

1. The value of the case is set at €3,838.22, in accordance with Article 97-A, paragraph 1, paragraph (a) of the CTPP, applicable by virtue of paragraphs (a) and (b) of Article 29, paragraph 1 of the LFT and paragraph 2 of Article 3 of the Rules on Costs in Tax Arbitration Proceedings ("RCTAP").

VII. COSTS

1. In accordance with the provisions of Article 22, paragraph 4 of the LFT, the value of the arbitration fee is set at €612, in accordance with Table I of the aforementioned Rules, to be borne by the Respondent, given the full success of the petition.

Notify the parties.

Lisbon, AAAC, 11 May 2015

The Arbitrator

(Sérgio Santos Pereira)

[1] SOUSA, Jorge Lopes de, "Code of Tax Procedure and Process – annotated and commented" Volume I, Áreas Publishing, 2006, p. 875.

[2] Cfr. Manual on Tax Procedure and Process, Almedina Editions, 1st Edition, Coimbra, September 2012, p. 24.