Summary
Full Decision
ARBITRATION DECISION
I. REPORT
1.1. A…, domiciled at Rua …, no. … –… Esquerdo, …, …-… Oeiras, tax identification number … (hereinafter briefly designated as "Claimant"), submitted a request for constitution of a Single Arbitral Tribunal and for arbitration proceedings, under the provisions of articles 2, no. 1, subparagraph a), 10, no. 1, subparagraph a) and 10, no. 2 of the Legal Framework for Tax Arbitration (RJAT), approved by Decree-Law no. 10/2011, of 20 January, in its current wording, in which the Tax and Customs Authority is respondent (hereinafter designated as "Respondent").
1.2. The Claimant seeks that the Single Arbitral Tribunal annul the stamp tax assessment issued by the Finance Service of Oeiras … dated 20.03.2015, made on the basis of item 28.1 of the General Table of Stamp Tax (TGIS), referring to the year 2014 and to the urban property registered in the urban property matrix of the parish of … (Setúbal), under article …, in the total amount of € 21,395.70, with all other legal consequences, and the condemnation of the Respondent to payment of compensatory interest in accordance with article 43, no. 1, of the LGT and 61 of the CPPT, calculated on the amount paid.
1.3. The request for constitution of the Arbitral Tribunal was accepted by the Excellency the President of CAAD and immediately notified to the Respondent on 29 February 2016.
1.4. Given that the Claimant did not proceed with the appointment of an arbitrator, under the provision of article 6, no. 2, subparagraph a) of the RJAT, the undersigned was designated as arbitrator by the President of the Deontological Council of CAAD, and the appointment was accepted within the time and in the terms legally provided.
1.5. On 27 April 2016, the Parties were duly notified of such appointment and did not manifest any intention to refuse the appointment of the arbitrator, in accordance with the provision of article 11, no. 1, subparagraphs a) and b) of the RJAT, in conjunction with articles 6 and 7 of the Deontological Code.
1.6. In accordance with the provision of subparagraph c), of no. 1, of article 11 of the RJAT, the Collective Arbitral Tribunal was constituted on 19 May 2016.
1.7. In the Arbitration Request submitted by him, the Claimant invoked, in summary, the following:
a) Article 194 of Law no. 83-C/2013, of 31 December, introduced new wording to item 28 of the TGIS, which came to include land for construction;
b) The amendment introduced by Law no. 83-C/2013, of 31 December, entered into force on 01/01/2014, being applicable to the tax period to which the assessment that is the subject of the present arbitration proceedings refers (2014);
c) According to item 28.1 of the TGIS, in 2013, subject to this tax were ownership, usufruct, and the right of superficies over urban properties with residential use whose tax patrimonial value recorded in the matrix, in accordance with the Property Tax Code (IMI), was equal to or greater than € 1,000,000;
d) With the amendment that occurred in 2013 and which had repercussions in the years 2014 and onwards, land for construction whose construction, authorized or planned, is for residential use, in accordance with the Property Tax Code, came also to be subject to taxation at the rate of 1%;
e) The Claimant considers that the rule contained in item 28.1 of the TGIS, after the amendment that occurred in 2013 and which entered into force in 2014, violates the principle of equality, particularly tax equality, deriving from articles 13 and 103, no. 1 of the Constitution, and also, regarding the taxation of property, from article 104, no. 3, of the Constitution, and which is also provided in article 5 of the LGT;
f) The financial needs of the State, although they may be advanced as justification for the increase of certain types of taxation, namely that which gave rise to the creation of item no. 28 of the TGIS, must always pass the proportionality test.
g) Thus, a measure would not be admissible if:
a. It does not show itself, on its own, to be apt and suitable to achieve the intended purpose,
b. It is not the least onerous or least benign measure for taxpayers,
c. The means employed to achieve the intended purpose proves to be inadequate and disproportionate;
h) On the other hand, the simple extension of a rule of incidence to situations for which it was not initially envisaged contains the risk which is verified in the present case: that of violating the principle of equality by taxing different situations in the same manner;
i) Indeed, if the taxation of luxury properties with residential use could be considered constitutional, precisely because, given an effective use thereof by their respective owners, this situation reveals a materially relevant behavior from the perspective of assessing the owner's wealth, the same cannot be said of the case of taxation of land for construction;
j) Something entirely different from the effective use of a property for residential purposes is the expectation, or potential, of an urban property being able to have a "residential use" – and it is precisely this expectation that characterizes land for construction;
k) Land for construction, because it is not built, does not satisfy, on its own, any condition to be considered as properties "with use" (whatever that use may be);
l) In land for construction there is nothing more than the expectation, or potential, of a property being able, after its respective construction, to have a "use". Consequently, only when this "use" becomes concrete, which will never happen before its construction, can we consider that the land for construction comes to present any similarity with the urban property, namely by allowing its owner to derive some benefit;
m) A land for construction, notwithstanding its classification as urban property for IMI purposes, is characterized above all by its construction viability, which gives its owner nothing more than the possibility of being able to construct a property with the characteristics allowed by the applicable urban management instruments;
n) In fact, it may even happen that the owner does not have the financial capacity to present a subdivision project to the respective municipal chamber and pay the municipal fees necessary for the analysis of the project and the issuance of licenses – and, in that case, cannot benefit from the supposed potential of the land for construction;
o) Now, if it is true that the holder of land for construction valued at more than 1 million euros has in his legal sphere an asset of high value, it is also true that his situation is different from that of the owner of a property with residential use, who actually derives benefit from the property of which he is the holder!
p) It could be said that the fact that the owner of the property with residential use can derive income from the property while the owner of land for construction cannot is not relevant in this scope because this is taxation of property and not of income. However, this is not true that this is irrelevant;
q) On the one hand, in the case of the owner of the residential property who does not rent the property, but enjoys it directly, the value of the patrimonies of both is the same, yet we have two completely distinct situations: that of an owner who enjoys a luxury residence, on one hand, and that of the owner of the land for construction, who enjoys nothing;
r) It could further be said that the owner of land for construction can sell the property of which he is the owner and realize income in this way and that this possibility justifies taxation under stamp tax. It is true that he can. However, this income will already be taxed under Personal Income Tax or Corporate Income Tax, as the case may be. Furthermore, also the owner of a rural property valued at equal to or greater than 1 million euros can sell the property and it is not for this reason that it is taxed by item 28.1 of the TGIS;
s) It is undeniable that what the legislator intended when it created item 28.1 of the TGIS was to tax luxury residential properties and that the taxation of luxury made sense given the Country's financial situation;
t) The introduction of land for construction within the scope of application of the rule, later and following the abusive application of the previous law by the Tax and Customs Authority, came to distort the initial regime, extending it to situations completely distinct from those which it initially aimed at and making it violate the principle of equality inasmuch as it came to encompass situations which do not reveal luxury;
u) In truth, the situation of the owner of land for construction without an approved construction project is closer to that of the owner of a rural property than to that of the owner of an urban property with residential use;
v) The question discussed here concerns, therefore, the inequality revealed by the equal treatment of completely distinct situations;
w) A property with residential use valued at more than 1 million euros allows its respective owner to derive a benefit that can be considered a behavior of luxury – either way: either he uses it directly, having access to an asset that is located far above the average of Portuguese residential property, or he rents it, which will allow him to obtain rental income also far above the average;
x) That is, in the end, the reason why, in times of financial crisis, the legislator understood to increase taxation on this property: the contributory capacity revealed by the ownership of a property with residential use valued at equal to or greater than 1 million euros is susceptible to determining a special contribution to ensure the just apportionment of the tax effort asked of the community;
y) A very different situation is that of those who are owners of land for construction: notwithstanding the urban planning instruments applicable to the area where it is located that may allow construction, this does not mean that their respective owners can derive any benefit;
z) In the present case, the owner of the land for construction, now Claimant, not only derives no benefit from the land but also has substantial charges with it;
aa) Moreover, by virtue of the illegal occupation of the land by unknowns, the Claimant is prevented even from obtaining a subdivision license, whereby, manifestly, he cannot derive any benefit from the asset of which he is the holder;
bb) Thus, to make equivalent the situation of ownership of a property with residential use to that of land for construction by the mere fact that both have a value equal to or greater than 1 million euros is, manifestly, a violation of the principle of equality, particularly tax equality, inasmuch as the two situations do not reveal the same contributory capacity;
cc) The principle of tax equality is fundamental to justice in the incidence of the fiscal burden, since, embodying within itself the corollary of the prohibition of discrimination, deriving from the principle of equality provided in article 13 of the Constitution, it advocates, in accordance with article 103, no. 1 of the Fundamental Law, for "(…) just apportionment of income and wealth";
dd) On the other hand, the principle of tax equality is based on the general principle of equality provided in article 13 of the CRP, resulting from which the principle of contributory capacity which, by constitutional imperative, is the presupposition and the criterion of taxation;
ee) Secondly, the tax system provided in item 28.1 of the TGIS violates the right to property, provided in article 62 of the Constitution and which has a nature analogous to rights, freedoms and guarantees, benefiting, therefore, in accordance with article 17 of the Constitution, from the respective specific regime, namely for purposes of assessment of restrictions imposed on it;
ff) From the notion of tax as a fundamental duty of citizens results the third limit to the introduction of a tax such as that introduced by Law no. 83-C/2013, of 31 December: because the tax obligation consists of a sacrifice imposed on the sphere of private assets, this duty must enjoy, by analogy, the safeguards that protect fundamental rights, in case of authorized restrictions, namely as regards the principle of proportionality, provided in article 18 of the Constitution. Thus, any additional tax imposition must be analyzed from the perspective of its proportionality vis-à-vis the financial objective of obtaining revenue that is intended to be achieved;
gg) Now, the imposition of a rule of incidence that provides for the application of a rate of 1% per year on land for construction – realities which do not allow the respective owner an effective enjoyment of the asset in that they correspond to a mere expectation of construction – is, without any doubt, a disproportionate restriction on the right to private property and corresponds to the imposition in an abusive manner of a fundamental duty;
hh) The requirement of this tax – in the terms and in the manner in which it is being made – exceeds the meaning of the social function of property and the limits of the contributory capacity of citizens serving, purely and simply, as financial support for an uncontrollable public deficit that will be implying, over the course of the year, successive and increased patrimonial sacrifices on the part of its citizens;
ii) Now, the criterion of contributory capacity is a criterion for assessing the limits of taxes, being particularly noteworthy its function of controlling excess within the scope of direct taxes, in which taxes on property are included;
jj) The stamp tax rate on land for construction created by Law no. 83-C/2013, of 31 December, assumes, in summary, a confiscatory nature, wounding the right constitutionally provided to private property, provided in article 62 of the CRP;
kk) For all these reasons, it is concluded that the rule of incidence of stamp tax on land for construction, introduced by Law no. 83-C/2013, of 31 December, violates several constitutional principles, namely:
(i) the principle of equality, provided in articles 13 and 103, no. 1 of the Constitution, and also, regarding the taxation of property, in article 104, no. 3, of the Constitution, by making the same taxation apply to realities so distinct from the perspective of the benefit they allow their respective holders as land for construction and urban properties with residential use;
(ii) article 18, no. 2 and the principle of proportionality in general (which, in accordance with article 266, no. 2, binds the public administration) inasmuch as, both by virtue of the fact that it restricts a right analogous to rights, freedoms and guarantees (the right to property, provided in article 62 of the Constitution), and by virtue of the fact that this concerns the imposition of a fundamental duty, its implementation implies compliance with the principle of proportionality, which, as we have seen, is disrespected in the present case given the nature simply confiscatory of the tax in question and the fact that taxation does not take into account the specific circumstance of the land in question which, by virtue of being illegally occupied, does not allow its respective owner to derive benefit in any manner, which is revealed, from the outset, by the fact that the Municipal Chamber of … refuses to issue a subdivision license before the illegal constructions are removed, a demolition which, in turn, depends on a prior judicial decision;
ll) For the reasons stated, the act of stamp tax assessment that is the subject of the present arbitration proceedings is an act consequent of unconstitutional rules, and is therefore null – nullity whose declaration is hereby requested;
mm) But furthermore: in the case of the Claimant, in function of the circumstances to which we have already referred above and which concern the illegal occupation of the land in question, the judgment of proportionality regarding taxation must also be made in the present case, and the Tax and Customs Authority is bound to do so in accordance with no. 2 of article 266 of the Constitution;
nn) Indeed, if in normal circumstances the imposition of the taxation provided in item 28.1 of the TGIS on land for construction is already manifestly disproportionate, inasmuch as inadequate and disproportionate vis-à-vis the intended purpose, in the present case this judgment is even more exacerbated inasmuch as the Claimant not only derives no effective benefit from the property (by being land for construction), but also bears substantial charges with court actions and municipal proceedings resulting from the illegal occupation and is prevented from proceeding with a subdivision by virtue of this same illegal occupation;
oo) Now, the TA, like all administrative bodies and agents, must act, in the exercise of its functions, with respect for the principle of proportionality. It is bound to do so by no. 2 of article 266 of the Constitution;
pp) As such, the application of the taxation rate provided in item 28.1 of the TGIS constitutes a disproportionate act and, as such, unconstitutional and illegal, and therefore invalid and which should be declared as such.
qq) In the case at hand, it is manifest that, should the illegality of the assessment act be declared, there should be reimbursement of the tax, by virtue of the aforementioned articles 24, no. 1, subparagraph b), of the RJAT and 100 of the LGT, as this is essential to "restore the situation that would have existed if the tax act that is the subject of the arbitration decision had not been performed", in the part corresponding to the correction that was considered illegal;
rr) On the other hand, should the illegality of the tax act that is the subject of the present arbitration proceedings be declared, it is also clear that the illegality of the act will be imputable to the TA, which, by its own initiative, performed it without legal support. There will be a defect of violation of substantive law, constituted by error in the legal presuppositions, imputable to the Tax and Customs Authority;
ss) Consequently, the Claimant will be entitled to compensatory interest, in accordance with article 43, no. 1, of the LGT and 61 of the CPPT, calculated on the amount paid in excess;
tt) In these terms, and to the best of applicable law, the present request for arbitration proceedings should be judged as well-founded, as proven, and, consequently, the stamp tax assessment should be annulled, with all other legal consequences, with the TA condemned to payment of compensatory interest in accordance with article 43, no. 1, of the LGT and 61 of the CPPT, calculated on the amount paid.
1.8. The Respondent presented a response, in which it raised the following exceptions:
i) Untimeliness of the Request
The assessment, as shown in the date appearing in all 3 collection notes attached to the file by the Claimant, is dated 20/03/2015, and the first voluntary payment deadline occurred in April 2015, in accordance with the provision of art. 120 of CIMI, applicable ex vi art. 3 of Law no. 55/2012, of 29 October.
In accordance with the provision of art. 10, no. 1, subparagraph a) of Decree-Law no. 10/2011, of 20 January, which approved the Legal Framework for Tax Arbitration, and of art. 102, no. 1, subparagraph a) of CPPT, the deadline for submission of the request for constitution of the arbitral tribunal is 90 days from the end of the deadline for voluntary payment of the tax, that is, the deadline for requesting the constitution of the arbitral tribunal ended on 29/07/2015.
ii) Incompetence of the Arbitral Tribunal in the Face of the Non-Existence of a Tax Act
The Claimant does not contest a tax act, but rather the payment of a portion of a tax act, contained in a collection note, whereby in light of article 2 of the RJAT, the arbitral tribunal is incompetent to assess the request.
iii) Material Incompetence of the Arbitral Tribunal to Review Acts of Assessment and Registration in the Matrix
The Claimant seeks that the assessment of the property in question be reviewed, and which per se is the tax fact that is subsumed to the stamp tax assessment in question.
At no time did the Claimant, as taxpayer, called into question the certificates and/or assessments referring to the property in question, through the procedural and/or legal means at its disposal, which established that the property was land for construction with residential use, with TPA equal to or greater than € 1,000,000.00.
That is, a possible decision that would expunge these elements which were never contested would have the effect of eliminating from the legal order the assessments made by the TA and which were never called into question by the taxpayer, and in doing so, would manifestly exceed the material competence of the arbitral tribunal.
1.9 In its Response the Respondent further presented a defense by opposition, alleging, towards the lack of merit of the request for arbitration proceedings, in summary, the following:
a) The property in question has the nature of land for construction, as stated in the property registers and in the assessment sheet, where there are no buildings or constructions;
b) The use of the land in question was established at the time of the reassessment of the property, and the Claimant never complained against it, whereby it is this use that is valid for purposes of subsumption, correct, be it said, to the rule contained in Item 28.1 of the CIS;
c) There is, therefore, no basis for the alleged illegality that the Claimant seeks to impute to the assessment sub judice, the Respondent having acted in strict compliance with the law, to which it is rigorously bound, subsuming the tax fact to the express normative provision;
d) By all the above, the assessment in question constitutes a correct interpretation and application of law to the facts, not suffering from the defect of violation of law;
e) With regard to no. 3 of art. 104 of the CRP, the doctrine provides that the principle of equality, as it concerns property, must be interpreted with some parsimony, in the sense that the principle of equality does not involve a particular and autonomous legal content within the scope of taxation on property;
f) The most recent decisions of the Constitutional Court, in the aspect that interests us here, correctly mark that the principle of equality requires that what is necessarily equal be treated equally and what is essentially different be treated as different, not preventing differentiated treatment, but only arbitrary, unreasonable discriminations, i.e., distinctions in treatment that do not have sufficient justification and material foundation;
g) In the present dispute, the Arbitral Tribunal should not assess or discuss the merit of the legislative measure and its scope, and should limit itself to its assessment from the perspective of its conformity (manifest, it should be said) with the constitutional text;
h) Item 28 of the TGIS is a rule in accordance with the Constitution of the Portuguese Republic;
i) Item 28.1 of the TGIS applies to the ownership, usufruct, or right of superficies of urban properties with residential use, whose tax patrimonial value recorded in the matrix, in accordance with the CIMI, is equal to or greater than € 1,000,000, that is, it applies to the value of the property.
j) The legislator defined an economically presupposed, constitutionally valid, as a manifestation of contributory capacity (whose recipients have effectively a special contributory capacity given the criterion adopted) required for the payment of this tax;
k) From this do not result unjustified differences of treatment among taxpayers, as situations that are different are treated differently, in violation of that constitutional principle;
l) It is, unequivocally, a rule of general and abstract character, applicable indistinctly to all cases in which the respective factual and legal presuppositions are met;
m) The fact that the legislator established a value (€1,000,000) as a delimitative criterion of the incidence of the tax, below which the provision of the tax norm is not met, constitutes a legitimate choice of the legislator as to the fixing of the material scope of the "luxury residential properties" that it is intended to tax more heavily;
n) It is essential to verify the historical and chronological context that presided over the creation of this rule;
o) The legislator had the unequivocal intention of integrating into the collective effort to combat budget deficit and to fulfill the adjustment program the sectors of Portuguese society that revealed wealth through the ownership of properties whose tax patrimonial value was equal to or greater than €1,000,000, thereby encompassing equitably a broad set of sectors of Portuguese society that revealed wealth through the ownership of properties whose tax patrimonial value was equal to or greater than €1,000,000 given that «it cannot always be the same people – employees and pensioners – who bear the tax burden»;
p) With item 28.1 TGIS the legislator assumed as a measure of a measure of equality, which was intended to «reinforce the principle of social equity in austerity, ensuring an effective apportionment of the sacrifices necessary to fulfill the adjustment program», and that the equality in the apportionment of the sacrifices sought with item 28.1 of the TGIS by the «tax effort required» from owners of «high-value residential urban properties» compared with «those who live on the income from their work».
q) Taxation under stamp tax is subject to the criterion of adequacy, to the exact extent that it aims at the taxation of wealth embodied in the ownership of properties with residential use of high value and arises in a context of economic crisis that cannot be ignored;
r) The factual-legal reality selected by the legislator to constitute the basis of the incidence of the tax is the property itself considered, in regard to its use and its tax patrimonial value, not the total patrimonial property of the taxpayers;
s) The legislative choice not to include in the incidence of item 28.1 of the TGIS urban properties intended for purposes other than residential translates itself into a differentiation with a material foundation widely recognized by the legislator;
t) It being well known and public that the revitalization of economic activity and the increase of exports are the way out of the crisis, it is understood that legislative measures were not taken that would hinder economic activity, namely the increase of the tax burden that hinders it and affects international competitiveness;
u) We are, therefore, before a legitimate criterion of rational and logical differentiation, in no way violating the constitutional precepts, which imposes the limitation of the incidence of the taxation in question to luxury residential properties or with residential use, with exclusion and to the detriment of properties with strictly economic uses;
v) It is beyond question that it does not constitute an absolutely unreasonable solution that, in the context of a particular circumstantial situation of a serious economic and financial crisis, budgetary imbalance and degradation of public finances, an additional tax effort be imposed on owners of luxury residential properties, without equally encompassing owners of properties with non-residential uses, which are intended for the development of economic activities;
w) It is further added that the principle of equality, in its sub-dimension of the principle of proportionality, imposes the verification by the judge that legislative solutions do not show themselves indubitably, egregiously, absolutely unreasonably, taking as a presupposition a differentiation that is required, by everything that has already been referenced;
x) It is required, therefore, a judgment of assessment that considers not only the existence of a rational objective foundation in the assignment of differentiated treatment to categories of citizens, but which also assesses the measure of the difference established, so as to verify its adequacy in face of the foundation invoked;
y) The fact that the legislator established a value (€1,000,000) as a delimitative criterion of the incidence of the tax, below which the provision of the tax norm is not met, constitutes a legitimate choice of the legislator as to the fixing of the material scope of the "luxury residential properties" that it is intended to tax more heavily, and all the more so because any other value of analogous magnitude would assume, in the same way, an artificial character that is inherent to any quantitative fixing of a level or limit;
z) Thus, as the differentiated treatment finds sufficient material justification, the principle of equality is shown to be respected, both per se and in its dimension of proportional equality;
aa) Thus, the TA considers that the provision of item 28 of the TGIS does not constitute any violation of the principle of equality of art. 13 of the CRP.
bb) Taxation under stamp tax obeys the criterion of adequacy, being applied indistinctly to all holders of properties with residential use valued at greater than € 1,000,000, inciding on the wealth embodied and manifested in the value of the properties, eliminating any unconstitutionality by violation of the principle of proportionality or of contributory capacity;
cc) In truth, the measure implemented seeks to achieve maximum efficacy as to the objective to be achieved, with the minimum lesion to other public interests which do not consist in any arbitrariness of the distinction made by Item 28.1 by virtue of the residential use of the properties.
dd) Rather, it is a legitimate, legal and constitutional option of the legislator.
ee) Thus, in light of all that has been said above, one could never, absent better opinion, consider that there was error imputable to the services, in the issuance of the assessments in question, an indispensable condition for condemnation to payment of compensatory interest.
ff) By all the above, the assessments in question constitute a correct interpretation and application of law to the facts, not suffering from the defect of violation of law, whether of the CRP or of the CIS, and should, consequently, be judged as lacking merit, and the Respondent Entity absolved of the request.
1.10 By order of 27 June 2016, given that there is only controversy over matters of law and, although exceptions have been raised, the procedure in relation to them could be adequately exercised in writing, within the scope of the pleadings, the undersigned dispensed with the holding of the meeting provided for in article 18 of the RJAT, in application of the principles of autonomy of the Arbitral Tribunal in the conduct of the proceedings, celerity, simplification and procedural informality. It further decided that the proceedings continue with optional written pleadings and set 23 September 2016 as the deadline for issuance of the arbitration decision.
1.11 In the pleadings, the Claimant advocated, in essence, for the position it sustained in the initial petition, and sustained the total lack of merit of the exceptions invoked by the Respondent, in the following terms:
a) As to the exception of untimeliness of the request: the date from which the deadline for challenging established in article 10, no. 1, subparagraph a) of the RJAT is counted is the end of the voluntary payment deadline of the last installment, that is, 30.11.2015. Having the request for arbitration proceedings been submitted on 26.02.2016, it was submitted on the 88th day of the deadline, that is, before the end of the challenging deadline;
b) As to the exception of incompetence of the Arbitral Tribunal in the face of the non-existence of a tax act: the Claimant, as stated in the preamble of the request for arbitration proceedings, submits "to the assessment by Arbitral Tribunal of the legality of the stamp tax assessment issued by the Finance Service of Oeiras … dated 20.03.2015, made on the basis of item 28.1 of the General Table of Stamp Tax (TGIS), referring to the year 2014 and to the urban property registered in the urban property matrix of the parish of … (Setúbal), under article …, in the total amount of € 21,395.70, whose payment the Claimant made in the months of April, July and November 2015, following the notification of collection documents identified with the numbers 2015 … (1st installment, for payment until the end of April), 2015 … (2nd installment, for payment until the end of July) and 2015 … (3rd installment, for payment until the end of November), which are attached as document 1". Furthermore, the value of the economic utility of the request, as attributed by the Claimant, is € 21,395.70, corresponding to all of the tax assessed through the assessment act contested. Lastly, the request formulated is indeed for annulment "of the stamp tax assessment issued by the Finance Service of Oeiras … dated 20.03.2015, made on the basis of item 28.1 of the General Table of Stamp Tax (TGIS), referring to the year 2014 and to the urban property registered in the urban property matrix of the parish of … (Setúbal), under article …, in the total amount of € 21,395.70, with all other legal consequences, with the TA condemned to payment of compensatory interest in accordance with article 43, no. 1, of the LGT and 61 of the CPPT, calculated on the amount paid."
c) As to the incompetence of the material arbitral tribunal to review acts of assessment and registration in the matrix: the Claimant at no time asked the Tribunal to pronounce on the assessment made by the TA. All of the Claimant's argumentation departs, moreover, from the presupposition that the property in question was qualified as land for construction and contests the application to it of a taxation that is applied in the same manner to luxury patrimony. Neither the request nor the Claimant's argument presupposes or requires any alteration to the assessment made by the TA on the land in question.
1.12 The Claimant, still in the pleadings, maintains that the Respondent litigated in bad faith by, in the response presented, having produced statements that do not correspond to the truth, having led to the need to present pleadings, which could otherwise be dispensed with, and therefore asks for the condemnation of the Respondent in the respective fine and indemnification.
1.13 The Respondent, in the pleadings presented, maintained, in essence, the position sustained in the response.
II. RESOLUTION OF PROCEDURAL ISSUES
2.1. The Respondent invoked the dilatory exceptions of (i) untimeliness of the request, (ii) incompetence of the Arbitral Tribunal in the face of the non-existence of a tax act, and (iii) material incompetence of the arbitral tribunal to review acts of assessment and registration in the matrix.
Regarding the Exception of Untimeliness of the Request
2.2. The Respondent considers that the deadline for constitution of the arbitral tribunal would have ended 90 days after the end of the voluntary payment deadline of the first tax installment, invoking, for that purpose, an arbitration decision in which the taxpayer had not paid the first installment, thereby producing the early maturity of the remainder and, consequently, the anticipation of the judicial challenge deadline.
2.3. However, none of this occurred in the present case, in which all three installments were paid within the deadline stipulated in the respective collection note. As such, the date from which the deadline for challenging established in article 10, no. 1, subparagraph a) of the RJAT is counted is the end of the voluntary payment deadline of the last installment, that is, 30.11.2015. Having the request for arbitration proceedings been submitted on 26.02.2016, it was submitted on the 88th day of the deadline, that is, before the end of the challenging deadline.
2.4. The request for arbitration proceedings was, therefore, submitted in a timely manner, whereby the exception of untimeliness of the request, invoked by the Respondent, is without merit.
Regarding the Exception of Incompetence of the Arbitral Tribunal in the Face of the Non-Existence of a Tax Act
2.5. The Respondent states that "the object of the request for arbitration proceedings exceeds the competence of the arbitral tribunal" because "the Claimant does not contest a tax act, but contests rather the payment of a portion of a tax act contained in a collection note, that is, the object of the proceedings is the annulment not of a tax act, but of a collection note for payment of the 3rd installment of a tax";
2.6. However, this does not correspond to the truth. Indeed, the Claimant, as stated in the preamble of the request for arbitration proceedings, submits "to the assessment by Arbitral Tribunal of the legality of the stamp tax assessment issued by the Finance Service of Oeiras … dated 20.03.2015, made on the basis of item 28.1 of the General Table of Stamp Tax (TGIS), referring to the year 2014 and to the urban property registered in the urban property matrix of the parish of … (Setúbal), under article …, in the total amount of € 21,395.70, whose payment the Claimant made in the months of April, July and November 2015, following the notification of collection documents identified with the numbers 2015 … (1st installment, for payment until the end of April), 2015 … (2nd installment, for payment until the end of July) and 2015 … (3rd installment, for payment until the end of November), which are attached as document 1". Furthermore, the value of the economic utility of the request, as attributed by the Claimant, is € 21,395.70, corresponding to all of the tax assessed through the assessment act contested. Lastly, the request formulated is for annulment "of the stamp tax assessment issued by the Finance Service of Oeiras … dated 20.03.2015, made on the basis of item 28.1 of the General Table of Stamp Tax (TGIS), referring to the year 2014 and to the urban property registered in the urban property matrix of the parish of … (Setúbal), under article …, in the total amount of € 21,395.70, with all other legal consequences, with the TA condemned to payment of compensatory interest in accordance with article 43, no. 1, of the LGT and 61 of the CPPT, calculated on the amount paid."
2.7. Therefore, it is clear from the proceedings that the Claimant contests a tax assessment act for Stamp Tax, this Tribunal considering itself competent to decide on the merits of the case, based on the provision of articles 2, no. 1, subparagraph a), of the Legal Framework for Tax Arbitration, whereby the exception of incompetence of the Arbitral Tribunal in the face of the non-existence of a tax act, invoked by the Respondent, is without merit.
Regarding the Exception of Material Incompetence of the Arbitral Tribunal to Review Acts of Assessment and Registration in the Matrix
2.8. The Claimant at no time asked the Tribunal to pronounce on the assessment of the property made by the Respondent;
2.9. Neither the request nor the argumentation presented by the Claimant presupposes or requires any alteration to the assessment made by the Respondent on the land in question;
2.10 As already stated, what is at issue in the proceedings sub judice is the challenging of a tax assessment act for Stamp Tax, this Tribunal considering itself competent to decide on the merits of the case, based on the provision of articles 2, no. 1, subparagraph a), of the Legal Framework for Tax Arbitration, whereby the exception of material incompetence of the arbitral tribunal to review acts of assessment and registration in the matrix, invoked by the Respondent, is without merit.
2.11. Thus, the dilatory exceptions invoked by the Respondent are entirely without merit.
2.12. The parties enjoy legal personality and capacity, are legitimate as to the request for arbitration proceedings and are duly represented, in accordance with the provision of articles 4 and 10 of the RJAT and of article 1 of Order no. 112-A/2011, of 22 March.
2.13. There are no nullities, whereby it is required to proceed to the merits.
III. MERITS
III.1. MATTERS OF FACT
§1. Facts Established
The following facts are established as proven:
a) The Claimant is the owner of the urban property registered in the urban property matrix of the parish of … (Setúbal), under article …;
b) The property register of the urban property in question identifies it as "land for construction";
c) The Claimant was notified of the stamp tax assessment referring to the year 2014 of the property in question, in the total amount of € 21,395.70, whose collection was divided into three installments with payment deadline in the months of April, July and November 2015;
d) The Claimant made payment of the said collection notes within the applicable deadlines;
e) The property in question in the present proceedings is partially occupied by various persons illegally;
f) By virtue of the illegal constructions erected by said occupants on his land, the Claimant was required by the Municipal Chamber of … to proceed with the demolition and cleaning of these same constructions;
g) An order which he cannot comply with without judicial intervention inasmuch as the occupant allegedly uses the said makeshift constructions as a "second residence";
h) Since five of the occupants of the land refused to leave voluntarily, the Claimant had to notify them through individual judicial notifications to leave;
i) Meanwhile, in two of the cases, the Claimant has also had to file replevin actions, which are proceeding before the court of the Setúbal district;
j) In 2015, the Claimant presented to the Municipal Chamber of … a request for a subdivision operation license for the said land for construction;
k) In the scope of this proceeding, the Municipal Chamber of … informed him that it will not issue the subdivision license without the prior demolition of the constructions existing on it.
§2. Facts Not Established
It was not established that the Respondent acted with malice or gross negligence, with a view to obtaining a favorable decision, in the production of statements without correspondence to the facts described and documentally supported by the Claimant.
With relevance to the decision, there are no other essential facts not established.
§3. Reasoning regarding the Matters of Fact
As to the matters of fact established, the Tribunal's conviction was based on the free assessment of the positions assumed by the Parties regarding fact and on the content of the documents attached to the proceedings, not contested by the Parties.
III.2. MATTERS OF LAW
§1. Questions to be Decided
The principal question to be decided in the case sub judice is that which concerns whether the assessment act that is the subject of the present proceedings is legal or illegal.
The decision of the principal question presupposes the prior decision of the incidental question relating to the alleged unconstitutionality of the rule contained in item 28.1 of the TGIS.
In function of the direction of the decision of the principal question, it will be important to know whether the Claimant is entitled to reimbursement of the tax paid and to compensatory interest.
The Claimant further asks for the condemnation of the Respondent to payment of a fine and indemnification for bad faith litigation.
§2. Legal Framework
In accordance with the provision of article 204 of the Constitution of the Portuguese Republic, "[i]n disputes submitted to judgment, courts cannot apply rules that violate the Constitution or the principles contained therein".
In the present proceedings, the request for annulment of the stamp tax assessment is based on the alleged unconstitutionality of the rule contained in item 28.1 of the TGIS.
Thus, it is necessary to proceed with the confrontation of the said rule with the Constitution, namely with the principles of equality, contributory capacity and proportionality, invoked by the Claimant.
Article 4 of Law no. 55-A/2012, of 29 October, which entered into force on 30 October following, added an item to the TGIS then in force, with the following wording:
"28 - Ownership, usufruct, or right of superficies of urban properties whose tax patrimonial value recorded in the matrix, in accordance with the Property Tax Code (CIMI), is equal to or greater than € 1,000,000 – on the tax patrimonial value used for IMI purposes:
• 28.1 - For property with residential use – 1%;
• 28.2 - For property, when the taxpayers who are not natural persons are residents in a country, territory or region subject to a clearly more favorable tax regime, contained in the list approved by order of the Minister of Finance – 7.5%."
Subsequently, article 194 of Law no. 83-C/2013, of 31 December, introduced new wording to item 28 of the TGIS, which came to include land for construction, in the following terms:
"28.1 - For residential property or for land for construction whose construction, authorized or planned, is for residential purposes, in accordance with the provision in the Property Tax Code – 1%".
The amendment introduced by Law no. 83-C/2013, of 31 December, entered into force on 01.01.2014, being applicable to the tax period to which the assessment that is the subject of the present request for arbitration proceedings refers (2014).
§3. Assessment of the Alleged Violation of the Principle of Equality by the Rule Contained in Item 28.1 of the TGIS
The principle of equality, as a general principle, is enshrined in article 13 of the CRP.
In matters of taxation on property, it has further expression in article 104, no. 3, of the CRP, where it is provided that "[t]axation on property must contribute to equality among citizens".
The principle of tax equality, understood in a substantive sense, implies a requirement of equal treatment of equal situations and of differentiated treatment of distinct situations, being the principle of contributory capacity the main criterion of differentiation[1].
As presupposition and criterion of taxation, the principle of contributory capacity "on one hand, constituting the ratio or cause of taxation, removes the fiscal legislator from arbitrariness, obligating it that in the selection and articulation of tax facts, it adheres to revelations of contributory capacity, that is, erects into object and taxable matter of each tax a determined economic presupposition that is a manifestation of this capacity and is present in the diverse legal hypotheses of the respective tax"[2].
As stated by the Constitutional Court in Decision no. 84/2003, "the principle of contributory capacity expresses and concretizes the principle of fiscal or tax equality in its aspect of 'uniformity' – the duty of all to pay taxes according to the same criterion – with contributory capacity fulfilling the unitary criterion of taxation", being understood this criterion as that in which "the incidence and apportionment of taxes – of 'fiscal taxes' more precisely – should be made according to the economic capacity or 'spending capacity' (...) of each and not according to what each might eventually receive in public goods or services (criterion of benefit). (...) Notwithstanding the silence of the Constitution, it is the widespread understanding of the doctrine that 'contributory capacity' continues to be a basic criterion of our 'Fiscal Constitution' and that to it one can (or should) arrive starting from the structuring principles of the fiscal system formulated in articles 103 and 104 of the CRP (...)".
One of the fundamental dimensions of the principle of equality, as a principle that gives concrete effect to the principle of the Rule of Law, is that of the prohibition of arbitrariness, which relates to the principles of legal certainty and proportionality. From this results that the principle of equality "can be mobilized when taxation is based on conceptually indeterminate or extremely complex rules, of burdensome, difficult and unpredictable administration, generating significant inequalities in their application by the administration or by the tax jurisdiction"[3].
In the case sub judice, the rule contained in item 28.1 of the TGIS subjects to taxation in stamp tax, in addition to residential properties, also land for construction "whose construction, authorized or planned, is for residential purposes"[4], whose tax patrimonial value is equal to or greater than € 1,000,000.
The determination of the sense of the expression transcribed above cannot but be considered problematic. Indeed, what does authorized or planned construction mean? What is the moment from which one is considered to be faced with authorized or planned construction? At the moment of obtaining the construction license? At another moment? And if despite the existence of a license there is no possibility of construction in the immediate future, as occurs in the present case? And if, despite the abstract possibility of being able to have construction, the owner does not have the economic capacity to realize the construction?
The questions formulated, among others which could be made, point to a rule that does not assure a minimum of legal certainty in its interpretation and application, opening the doors to arbitrariness, in violation of the principle of equality. Put another way, the rule, as it is worded, will reach owners with very differentiated levels of contributory capacity and properties whose construction is ready to be realized as well as properties that, for various reasons, will have no construction for years.
In the case sub judice, the rule contained in item 28.1 of the TGIS was applied despite the Claimant being unable to derive any benefit from the asset of which he is the holder, by virtue of the illegal occupation of the land by unknowns and consequent prevention of obtaining a subdivision license.
Now, the principle of typicality and the principles of legal certainty and protection of legitimate expectation are of enormous relevance in Tax Law. To such an extent that, according to the Constitutional Court, the use, by the fiscal legislator, of indeterminate concepts, in the definition of the essential elements of the tax, is only admissible when this proves to be indispensable to ensure the practicability and operationality of the system and to promote the implementation of the principle of tax equality[5].
In the case at hand, the resort by the legislator to vague and indeterminate concepts (such as that of "planned construction") not only does not have as its foundation the guarantee or promotion of tax equality, as, on the contrary, is apt to generate an arbitrary application of tax law, in violation of the constitutional principle of equality.
As stated in the Arbitration Decision rendered in the context of process no. 507/2015-T, of 17/03/2016, the rule contained in item 28.1 of the TGIS also translates itself into a "negative fiscal discrimination dispensed to land with residential use whose VPT is equal to or greater than one million relative to residential properties constructed and which are held in horizontal or vertical ownership or ownership whose autonomous fractions or units of individual use do not exceed, in their respective VPT, the value of € 1,000,000, but whose total VPT is equal to or greater than this same value".
We subscribe to the reasoning adopted by the Arbitral Tribunal in the said process 507/2015-T, expressed in the Arbitration Decision of 17/03/2016 in the following terms:
"By all that has been referred to regarding the interpretation of the legal regime, in keeping with the jurisprudence of the Supreme Administrative Court [Decision of 9-9-2015, process no. 047/15], it is to be understood that, when buildings are constituted by fractions capable of independent use, it is the value of each of them that is relevant to ascertain the applicability of item 28.1 of the TGIS, independently of whether horizontal ownership is or is not constituted.
By this, when none of the fractions whose construction is authorized or planned has a value equal to or greater than € 1,000,000, one will be outside the scope of incidence of Stamp Tax.
The question of unjustified discrimination which the Claimants raise is that of, before a building is constructed and the fractions capable of independent use are created, each of them with value less than € 1,000,000, stamp tax applies to the tax patrimonial value of the land which has a value equal to or greater than that.
In truth, with stamp tax provided for in item 28.1 inciding on the "on the tax patrimonial value used for IMI purposes", as is referred to in the body of item 28, before fractions are constructed, it is that value which is to be considered to ascertain the incidence of the tax, as there is no other which is used for IMI purposes.
And "the tax patrimonial value of land for construction is the sum of the value of the area of implantation of the building to be constructed, which is that situated within the perimeter of fixation of the building to the soil, measured by the external part, added to the value of the land adjacent to the implantation", and "the value of the implantation area varies between 15% and 45% of the value of authorized or planned buildings" (article 45, nos. 1 and 2, of the CIMI).
Being so, one must conclude that, in relation to land for construction relative to which construction is only planned or authorized with individual housing units of value less than € 1,000,000, that justification does not apply for taxing the land, as the fact that the land has a value equal to or greater than that does not permit identifying a taxpayer with a contributory capacity at the level of the "highest standards of Portuguese society".
On the other hand, the ownership of rights over land for construction of fractions capable of independent use even reveals less contributory capacity than what is revealed by ownership of rights over the already constructed property, whereby one cannot find a rational justification for taxing the ownership of rights over the land, when it has a value equal to or greater than € 1,000,000, and not taxing the ownership of the rights of the same taxpayer over the already constructed property, when all fractions have values less than that.
In truth, it lacks rational justification to tax on the basis of hypothetical elevated contributory capacity the situations in which there is ownership of rights over land for construction in which authorized or planned constructions are exclusively constituted by fractions of individual value less than € 1,000,000 and not to apply the same taxation to situations in which on the land these constructions have already been completed, with an enormous increase in the tax patrimonial value of the construction, given that 'the value of the implantation area varies between 15% and 45% of the value of authorized or planned buildings'.
Already with respect to land for construction intended for construction of autonomous residences valued at equal to or greater than € 1,000,000, ownership of rights over land with this purpose reveals, on its own, a situation of wealth, at the level of the 'highest standards of Portuguese society': that is, if the land, on its own, has a value equal to or greater than € 1,000,000 and is intended for construction of individual residences of value also equal to or greater than this, one is faced with situations in which the mere ownership of rights over the land reveals wealth corresponding to 'the highest standards of Portuguese society'.
Item 28.1 of the TGIS, in the part relative to land for construction, contains, however, no limitation to its application in function of the value of the authorized or planned residences, whereby it must be concluded that it only makes its application dependent on the tax patrimonial value of the land itself.
Being so, it is to be concluded that the rule of item 28.1 of the TGIS, in the wording introduced by Law no. 83-C/2013, of 31 December, is materially unconstitutional, by violation of the principle of equality, enunciated generically in article 13 of the CRP, as it applies to land for construction of tax patrimonial value equal to or greater than € 1,000,000 for which the authorized or planned construction does not include any fraction capable of independent use with a value equal to or greater than that."
By all the above, it is concluded that the rule contained in item 28.1 of the TGIS, in the wording introduced by Law no. 83-C/2013, of 31 December, is materially unconstitutional by violation of the principle of equality, enshrined in article 13 of the CRP.
§4. Consequences of the Application of an Unconstitutional Rule by the Respondent
By virtue of the material unconstitutionality from which the rule contained in item 28.1 of the TGIS suffers, in the wording introduced by Law no. 83-C/2013, of 31 December, by violation of the constitutional principle of equality, the assessment that is the subject of the present proceedings suffers from a defect of violation of law, by constituting error as to the legal presuppositions, which justifies its annulment (article 163, no. 1, of the Code of Administrative Procedure).
§5. Request for Reimbursement of Amounts Paid and Compensatory Interest
The Claimant requests reimbursement of the tax unduly paid, plus compensatory interest.
In accordance with the provision of article 24, no. 1, subparagraph b) of the RJAT "[t]he arbitration decision on the merits of the claim from which there is no appeal or challenge binds the tax administration from the end of the deadline provided for appeal or challenge, and this, in the exact terms of the favorability of the arbitration decision to the taxpayer and until the end of the deadline provided for spontaneous execution of the decisions of the tax courts, alternatively or cumulatively, as the case may be:
[...]
b) Restore the situation that would have existed if the tax act that is the subject of the arbitration decision had not been
[...]".
In the same sense, article 100 of the LGT provides that "[t]he tax administration is obligated, in case of total or partial merit of complaints or administrative remedies, or of judicial proceedings in favor of the taxpayer, to the immediate and complete restoration of the situation that would have existed had the illegality not been committed, comprising the payment of compensatory interest, in the terms and conditions provided in law".
Thus, by virtue of articles 24, no. 1, subparagraph b), of the RJAT and 100 of the LGT, there is occasion for reimbursement of the tax paid following the illegal assessment act that is the subject of the present proceedings.
As to compensatory interest, article 43, no. 1, of the LGT provides that "compensatory interest is due when it is determined, in administrative complaint or judicial challenge, that there was error imputable to the services from which there results payment of the tax debt in an amount greater than that legally due".
In the case sub judice, the assessment does not suffer from error imputable to the Respondent, but rather from a defect derived from unconstitutionality of a legal rule, which the Respondent could not disapply, save if a violation of constitutionally enshrined rights, freedoms and guarantees were at issue, which is not the case[6].
In these terms, the Tribunal judges the request for compensatory interest to lack merit, without prejudice to the right to reimbursement of the amount unduly paid, which should be calculated by the Tax and Customs Authority in execution of this decision.
§6. Request for Condemnation of the Respondent as a Litigant in Bad Faith
The Claimant further asks for the condemnation of the Respondent to payment of a fine and indemnification for bad faith litigation.
The Claimant does not indicate, however, which normative provision it considers applicable and which leads it to conclude that one is faced with a situation of bad faith litigation.
The Claimant limits itself to asserting that "the TA should not have ignored that the opposition presented in the present proceedings lacks any foundation whatsoever, and should have refrained from producing statements that do not correspond to the truth – such as that the object of the proceedings 'is the annulment not of a tax act, but of a collection note for payment of the 3rd installment of the tax' and that the Claimant does not contest a tax act, but contests rather the payment of a portion of a tax act contained in a collection note". (cf. articles 12 and 13 of the initial petition)", and that "[b]y proceeding in this manner, the TA litigated in bad faith, and should be condemned in the respective fine and indemnification".
Article 104, no. 1, of the LGT provides that "[w]ithout prejudice to the exemption from costs, the tax administration may be condemned in a pecuniary sanction to be quantified in accordance with the rules on bad faith litigation in case of acting in court against the content of binding information previously provided to the interested parties or its conduct in the proceedings diverges from that habitually adopted in identical situations".
In the case sub judice, however, no binding information is at issue.
Article 542, no. 1, of the Code of Civil Procedure (CPC) provides that "[h]aving litigated in bad faith, the party is condemned in a fine and in an indemnification to the other party, if it so requests".
In order for it to be considered that the party has litigated in bad faith, as provided in article 542, no. 2, of the CPC, it must be proven that it acted with malice or gross negligence and one of the following circumstances is verified: a) it has raised a claim or opposition whose lack of foundation it should not have ignored; b) it has altered the truth of the facts or omitted facts relevant to the decision of the case; c) it has committed a serious omission of the duty of cooperation; d) it has made manifestly reprehensible use of the proceedings or of the procedural means, with the aim of achieving an illegal objective, preventing the discovery of truth, hampering the action of justice or protesting, without serious grounds, the passage into res judicata of the decision.
In the case sub judice, even if it may be admitted that the Respondent produced, in its response, statements that do not correspond to the facts proven by documents, it was not established that the Respondent did so with malice or gross negligence.
As stated in the doctrine emanating from the Decision of the Supreme Court of Justice of 16/02/2012, "a party litigates in bad faith when it alleges facts which it knows perfectly to be contrary to the truth with the intention of obtaining a decision in the dispute which is favorable to it".
In the case sub judice, the statements made by the Respondent in its response are easily and manifestly refuted by the documents which were presented by the Claimant attached to the initial Request. The statements in question did not, in effect, correspond to the facts, not because the Respondent had the intention to deceive the tribunal and thereby obtain a favorable decision but, to all appearances, due to an error resulting from responses previously prepared for other proceedings.
The Respondent did not obtain nor could it obtain, faced with the facts proven by documents, any advantage in the statements in question, rather wasting the opportunity to defend itself adequately.
The Claimant itself admits, moreover, "that the TA has to present Responses to numerous proceedings whose foundation is similar to the present and that, in some of them, the Claimant has, in fact, contested the collection notes in which each of the installments is divided and not the assessment", not being, however, the situation in the present case.
It was not, therefore, established that the Respondent acted with malice or gross negligence, in the statements it made, with a view to obtaining a favorable decision.
In these terms, the Tribunal judges the request, formulated by the Claimant, for the condemnation of the Respondent as a litigant in bad faith, to lack merit, and the Respondent is absolved of such request.
IV. DECISION
In these terms, this Arbitral Tribunal decides:
a) Judge the arbitration request for annulment of the stamp tax assessment issued by the Finance Service of Oeiras … dated 20/03/2015, made on the basis of item 28.1 of the General Table of Stamp Tax (TGIS), referring to the year 2014 and to the urban property registered in the urban property matrix of the parish of … (Setúbal), under article …, in the total amount of € 21,395.70, with all other legal consequences, to have merit;
b) Judge the request for reimbursement of the amount paid by the Claimant to have merit;
c) Judge the request for compensatory interest to lack merit, absolving the Tax and Customs Authority of the respective request;
d) Judge the request for condemnation of the Respondent as a litigant in bad faith to lack merit, and absolving it of that request;
e) Communicate the present decision to the Public Prosecutor's Office, for the purposes provided in article 280, no. 3, of the CRP.
V. VALUE OF THE PROCEEDINGS
In harmony with the provision of article 306, no. 2, of the CPC, 97-A, no. 1, subparagraph a), of CPPT and 3, no. 2, of the Regulation of Costs in Tax Arbitration Proceedings, the value of the proceedings is fixed at € 21,395.70.
VI. COSTS
In accordance with article 22, no. 4, of the RJAT, the amount of costs is fixed at € 1,224.00, in accordance with Table I attached to the Regulation of Costs in Tax Arbitration Proceedings, to be borne by the Respondent.
Notify accordingly.
Lisbon, 19 September 2016
The Arbitrator
(Paulo Nogueira da Costa)
[1] Jónatas E. M. Machado and Paulo Nogueira da Costa, Manual of Tax Law: multinational perspective, Coimbra, Almedina, 2016, pp. 61-62.
[2] Casalta Nabais, Tax Law, 7th edition, Coimbra, Almedina, 2012, p. 157.
[3] Jónatas E. M. Machado and Paulo Nogueira da Costa, op. cit., pp. 63-64.
[4] Our emphasis.
[5] See, for example, the Decision of the Constitutional Court no. 127/04.
[6] See, in this sense, among others, the Decision of the Supreme Administrative Court of 26/02/2014, proc. no. 0481/13.
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