Process: 115/2013-T

Date: December 12, 2013

Tax Type: Selo

Source: Original CAAD Decision

Summary

CAAD Process 115/2013-T addressed whether Stamp Tax (Imposto do Selo) under Item 28 of the General Stamp Tax Table (TGIS) applies to building land (terrenos para construção). The claimant company challenged two Stamp Tax assessments totaling €13,560.68 for 2012 and 2013 on urban property classified as land for construction with a taxable patrimonial value of €1,627,280.00. The property had no buildings or constructions erected on it.

The claimant argued that Stamp Tax should only apply to properties with actual housing allocation, not mere potential use. Since land for construction under Article 6(3) of the Municipal Property Tax Code (CIMI) represents only potential destination for construction, not actual housing use, it should not be subject to Stamp Tax. The claimant contended that applying an allocation coefficient for 'housing' to undeveloped land was inappropriate since no property existed capable of being used for housing purposes.

Additional constitutional challenges included: (1) retroactive application of tax law violating Article 103(3) of the Portuguese Constitution, as the 2012 assessments used values from December 31, 2011 for taxable events occurring October 31, 2012; (2) double taxation for fiscal year 2012, with two separate assessments issued for the same period; (3) violation of the nature of Stamp Tax, which should tax operations revealing income or wealth, not mere property ownership; and (4) unconstitutional double taxation, as the same property was subject to both Municipal Property Tax (IMI) and Stamp Tax, violating equality principles under Article 104(3) of the Constitution.

The case was initiated through CAAD arbitration procedure under Decree-Law 10/2011, with a sole arbitrator designated by the Deontological Council. This arbitration mechanism provides taxpayers an alternative forum for challenging tax assessments on building land and other properties subject to Stamp Tax Item 28.

Full Decision

ARBITRAL DECISION

The arbitrator Dr. André Festas da Silva, designated by the Deontological Council of the Administrative Arbitration Center (CAAD) to form the Arbitral Tribunal, constituted on 16/07/2013, decides as follows:

I - REPORT

  1. On 14/05/2013 the company A, (hereinafter designated as "A" or "Claimant") holder of NIPC ..., with registered office in .., in …, requested, pursuant to the provisions of subparagraph a) of n.º 1 of Article 2.º, n.º 2 of Article 5.º, n.º 1 of Article 6.º, and Articles 10.º and following of Decree-Law n.º 10/2011, of 20 January, in conjunction with subparagraph a) of Article 99.º and subparagraph f) of n.º 1 and n.º 2 of Article 102.º, all of the Tax Procedure and Process Code, the constitution of an Arbitral Tribunal with designation of a sole arbitrator by the Deontological Council of the Administrative Arbitration Center, pursuant to the provisions of n.º 1 of Article 6.º of the aforementioned statute.

  2. The request for constitution of the Arbitral Tribunal was accepted by His Excellency the President of CAAD on 15/05/2013 and was notified to the Tax and Customs Authority (hereinafter designated as "AT" or "Respondent") on that same date.

  3. The Claimant did not proceed to appoint an arbitrator, wherefore, under the provisions of Article 5.º, n.º 2, subparagraph b) and Article 6.º, n.º 1 of the RJAT, the undersigned was designated by the President of the Deontological Council of CAAD to integrate the present sole Arbitral Tribunal, having accepted pursuant to the legal provisions.

  4. AT submitted its response on 30/09/2013.

  5. On 24 October 2013, the first meeting of the Tribunal took place, pursuant to and for the purposes of Article 18.º of the RJAT, and minutes thereof were drawn up, which are also attached to the file.

  6. At that meeting:

a) The claimant requested permission to respond to the exception raised by AT, and was granted a period of ten days to do so.

b) The claimant waived the oral testimony evidence indicated by it.

c) The Honorable Counsel of the Claimant and the Honorable Representative of the Respondent waived oral arguments.

  1. The claimant responded to the exception raised on 04/11/2013.

  2. The Claimant requests that the Arbitral Tribunal: declare the illegality of the Stamp Tax assessment acts n.ºs 2012 ... (€8,136.40) and 2013 ... (€5,424.28), in a total amount of €13,560.68.

I.A. The Claimant bases its request, in summary, on the following terms:

  1. A is the legitimate owner of the urban property described in the Land Registry Conservatory of … under the number ... and registered in the respective urban property register under article ....

  2. The identified urban property has no building or construction erected on its soil.

  3. This reality is also confirmed by the classification of the property as being an urban property, included in the type of "land for construction", pursuant to the legal provisions in Article 6.º, n.º 3 of the Municipal Property Tax Code.

  4. Following the assessment of the land for construction, carried out by AT, the following taxable patrimonial value (VPT) was determined: € 1,627,280.00, valued on 20.11.2008.

  5. In carrying out this patrimonial assessment, AT understood to apply an allocation coefficient, which was, in this case, that of "housing", provided for in Article 41.º of the IMI Code.

  6. The tax obligation to pay Stamp Tax occurs only - in the case of resident taxpayers - on properties that have "housing allocation".

  7. In fact, such a category or type of property does not exist in the tax legal system where one knows in the IMI (Article 6.º of the respective Code) residential urban properties, commercial, industrial or service urban properties, land for construction and others, as a residual category.

  8. The concept of land for construction, for tax purposes, is not a formal concept, but rather a material concept, directed at the realities for which it was formulated, translating, in this case, the potential destination for construction.

  9. It is concluded, therefore, from the above, that in land for construction there does not exist, by its own elementary nature, any property capable of being used for housing, commercial, service purposes, etc., there being only a mere potential or merely virtual expectation that this will occur.

  10. The authorized construction also provides for the same building to be constructed for commercial or service purposes.

  11. Licensing is not in itself a guarantee of the realization of the work and, consequently, there is always an uncertainty regarding the verification of the actual housing use.

  12. Law n.º 55-A/2012, of 29 October, mentions that the tax base to be used for the assessments issued in 2012 will be the VPT ascertained on 31 December 2011.

  13. It states, however, that the taxable event for those assessments occurred on 31 October 2012, whereas the tax base is calculated considering 31 December 2011, and therefore, this base may be different from that existing on the date of the alleged taxable event.

  14. Now, in the case provided for in the aforementioned Law, the taxable event is formed with values assessed in the past, revealing a retroactive character, illegitimate in light of the constitutional rule protected by Article 103.º, n.º 3, of the Constitution of the Portuguese Republic.

  15. The taxable event for the Stamp Tax assessments that were issued in the year 2012 (in casu, assessment n.º 2012 ...) occurred on 31 October 2012.

  16. In turn, it results from Article 5.º, subparagraph u) of the Stamp Tax Code that, for assessments issued in the years 2013 and following, "in the situations provided for in item 28 of the General Table, [the birth of the tax obligation occurs] at the time and in accordance with the rules provided in the CIMI, with the necessary adaptations".

  17. In these terms, in accordance with what is provided for in Article 113.º of the IMI Code, the taxable event occurs on 31 December of the year to which it relates, and the assessment will be carried out in the following year.

  18. We have thus that, for the Stamp Tax assessments that were received in 2013 (in casu, assessment n.º 2013 ...), the taxable event also occurred in the fiscal year 2012.

  19. In this conformity, for the same period of time – fiscal year 2012 – two assessments of the same nature were required – both relating to Item 28 of the TGIS, referring to the same property -, without prejudice to the fact that there was a reduction in the rate to be applied for assessments issued in 2012.

  20. It is, therefore, clear that we are faced with a duplication of the tax collection.

  21. In other words, it is inherent in the taxation under Stamp Tax the existence of an operation that reveals income or wealth.

  22. Now, in the case of Item 28 of the TGIS, no operation in which A participated is being taxed, nor is an economic benefit being taxed that has entered the legal and patrimonial sphere of the Claimant.

  23. It results, therefore, clearly that the taxation provided for in the aforementioned Item 28 is not coherent with the purpose that has been given to Stamp Tax, namely, that of taxing operations, thus constituting a "distortion" of the Portuguese tax system.

  24. In the present situation, the assets in question – land for construction – are annually taxed by the Municipal Property Tax, taking into account the taxable patrimonial value attributed to each property, and therefore contributing to equality between citizens, in accordance with the provisions of Article 104.º, n.º 3 of the Constitution of the Portuguese Republic.

  25. In this sense we have that, for the same reality (the ownership of a property with taxable patrimonial value attributed), two different taxes apply – Stamp Tax and IMI – that is, the same reality is taxed twice.

  26. Since only some of the resident taxpayers will suffer this double taxation, contrary to constitutionally protected principles, namely, the principle of equality between citizens, provided for in Articles 13.º and 104.º of the Constitution of the Portuguese Republic.

  27. On the other hand, A understands that this Law violates the principle of interpretation in conformity with the Constitution, namely, because it lacks compliance with the principle of equality and legality.

I.B In its Response, AT invoked the following:

  1. It is AT's understanding that the property registered under article ... in the urban property register of the parish and municipality of …, has the legal nature of property with housing allocation, wherefore the assessment act which is the subject of the present request for arbitral pronouncement should be maintained as it embodies the correct interpretation of item 28 of the General Table, added by Law 55-A/2012 of 29/12.

  2. The notion of allocation of urban property is found in the part relating to the assessment of properties, which is well understood since the assessment of the property (purpose) incorporates value to the property, constituting a determining fact of distinction (coefficient) for assessment purposes.

  3. As results from the expression "... value of authorized buildings", contained in Article 45.º, n.º 2 of the CIMI, the legislator chose to determine the application of the methodology for assessing properties in general to the assessment of land for construction, being consequently applicable thereto the allocation coefficient provided for in Article 41.º of the CIMI.

  4. AT understands that the concept of "properties with housing allocation", for purposes of the provision in item 28 of the TGIS, comprises both built properties and land for construction, namely taking into account the literal element of the rule.

  5. In these terms, well before the actual building of the property, it is possible to ascertain and determine the allocation of the land for construction.

  6. The different suitability of the properties (housing/services/commerce) supports the different treatment, having constituted a choice of the legislator, for political and economic reasons, to exclude from the incidence of IS the properties intended for purposes other than housing.

  7. As to the alleged unconstitutionality due to violation of the principle of proportionality, it should be noted that taxation under stamp tax complies with the criterion of adequacy, applying equally to all holders of properties with housing allocation of value exceeding €1,000,000.00, applying to the wealth embodied and manifested in the value of the properties.

I.C Response of the Claimant to the Exception

  1. The question to be decided centers solely on whether or not land for construction is included within the scope of the incidence of Stamp Tax referred to in the aforementioned Item 28.

  2. The Claimant nowhere alludes to contesting the rules for the assessment of the land for construction sub judice.

II. DISMISSAL OF PRELIMINARY OBJECTIONS

The Tribunal is competent and is regularly constituted, pursuant to Articles 2.º, n.º 1, subparagraph a), 5.º and 6.º, all of the RJAT.

The parties have legal personality and capacity, are legitimate and are legally represented, pursuant to Articles 4.º and 10.º of the RJAT and Article 1.º of Ordinance n.º 112-A/2011, of 22 March.

Since an exception was raised by AT, it must first be appreciated.

AT, in Articles 21 to 23 of the response, alleged that, should the claimant be dissatisfied with the rules for the assessment of the property, it should have requested a second assessment and possibly, in a subsequent act, a judicial challenge. Not having done so, the procedural means now used was not the proper one to appreciate the assessments in question.

In the case sub judice, the Claimant requests the appreciation of Stamp Tax assessments. The claimant does not request a challenge of the assessment carried out for purposes of IMI. The decision to be rendered will be limited to the legality or otherwise of the assessments and Stamp Tax.

Accordingly, the procedural means used by the claimant is the correct one (Article 2º, n.º 1 of the RJAT), having been used in a timely manner (Article 10º, n.º 1, al. a) of the RJAT and Article 102º, n.º 1, al. a) of the CPPT), reason for which the exception raised by the respondent is judged to be without merit.

It is now necessary to appreciate the merits of the request.

III. SUBJECT MATTER TO BE DECIDED

The substantive question at issue in the present case consists in determining whether land for construction is subject to Stamp Tax item 28.

IV. – FACTUAL MATTERS

IV.1. Proven Facts

Before entering into the appreciation of the questions, it is necessary to present the factual matters relevant to their respective understanding and decision, which, having examined the documentary evidence and the tax administrative process attached and taking into account the facts alleged, is set out as follows:

  1. AT notified the Claimant of the Stamp Tax assessment acts n.ºs 2012 … and 2013 …, in the total amount of € 13,560.68, carried out under Item 28 of the General Table of Stamp Tax.

  2. With regard to assessment n.º 2012 …, a Complaint identified under n.º .. was filed, with the request being dismissed on 30 April 2013 by AT.

  3. A is the legitimate owner of the urban property described in the Land Registry Conservatory of … under the number ... and registered in the respective urban property register under article ....

  4. The identified urban property has no building or construction erected on its soil.

  5. The property is classified as urban, of the type land for construction.

  6. Now, following the assessment of the land for construction, carried out by AT, the following taxable patrimonial value VPT was determined: € 1,627,280.00, valued on 20.11.2008.

  7. In carrying out this patrimonial assessment, AT understood to apply an allocation coefficient, which was, in this case, that of "housing", provided for in Article 41.º of the IMI Code.

  8. Approved is a building authorization permit for construction to be erected on the land for construction under consideration, where the use for housing, commercial and service purposes is provided for.

IV.2. Facts Given as Not Proven

There are no facts given as not proven, since all facts relevant to the appreciation of the request were given as proven.

IV.3. Justification of Factual Matters

The facts given as proven comprise matters not disputed and documentally demonstrated in the file.

The facts contained in numbers 1 to 8 are taken as agreed by the parties, by analysis of the administrative process and by the documents submitted by the claimant (docs. 1 to 5)

V. Application of Law to Facts

The first defect invoked by the claimant is the defect of law due to error in the premises of the right to assess.

Previously, it should be noted that this legal question has already been appreciated in other arbitral decisions (Case 48/2013 – T, Case 49/2013 – T, Case 53/2013 - T). This Tribunal is in harmony with the reasoning and conclusions of these decisions, seeing no grounds to depart from them.

Law n.º 55-A/2012, of 29 October, made various amendments to the Stamp Tax Code and added to the TGIS item 28, with the following wording:

28 – Ownership, usufruct or right of superficies of urban properties whose taxable patrimonial value contained in the register, in accordance with the Municipal Property Tax Code (CIMI), is equal to or greater than € 1,000,000 – on the taxable patrimonial value used for purposes of IMI:

28.1 – For property with housing allocation – 1 %;

28.2 – For property, when the taxpayers who are not natural persons are resident in a country, territory or region subject to a clearly more favorable tax regime, contained in the list approved by ordinance of the Minister of Finance – 7.5 %.

In the transitional provisions contained in Article 6.º of that Law n.º 55-A/2012, the following rules relating to the assessment of the tax provided for in that item were established:

1 – In 2012, the following rules must be observed by reference to the assessment of stamp tax provided for in item n.º 28 of the respective General Table:

a) The taxable event occurs on 31 October 2012;

b) The taxpayer for the tax is that mentioned in n.º 4 of Article 2.º of the Stamp Tax Code on the date referred to in the preceding subparagraph;

c) The taxable patrimonial value to be used in the assessment of the tax corresponds to that which results from the rules provided for in the Municipal Property Tax Code by reference to the year 2011;

d) The assessment of the tax by the Tax and Customs Authority must be carried out by the end of November 2012;

e) The tax shall be paid, in a single installment, by taxpayers by 20 December 2012;

f) The applicable rates are the following:

i) Properties with housing allocation assessed in accordance with the IMI Code: 0.5 %;

ii) Properties with housing allocation not yet assessed in accordance with the IMI Code: 0.8 %;

iii) Urban properties when the taxpayers who are not natural persons are resident in a country, territory or region subject to a clearly more favorable tax regime, contained in the list approved by ordinance of the Minister of Finance: 7.5 %.

2 – In 2013, the assessment of stamp tax provided for in item n.º 28 of the respective General Table must apply to the same taxable patrimonial value used for purposes of municipal property tax assessment to be carried out in that year.

3 – Failure to deliver, in whole or in part, within the indicated deadline, the amounts assessed as stamp tax constitutes a tax violation, punished in accordance with the law.

In the case at hand, item 28.1 is at issue. Properties with housing allocation with a VPT equal to or greater than €1,000,000.00 are subject to Stamp Tax.

In Stamp Tax there is no notion of property with housing allocation. Wherefore, pursuant to Article 67º, n.º 2 of Stamp Tax, we will have to examine in the CIMI to ascertain whether such a notion exists, since this code is of subsidiary application, namely in its Article 6º, whose wording is as follows:

Article 6.º
Types of urban properties

Pursuant to Article 6º, n.º 1 of the CUNU 1 Urban properties are divided into:

a) Residential;

b) Commercial, industrial or for services;

c) Land for construction;

d) Others.

The legislator distinguishes residential properties [subparagraph a) of Article 6º] from land for construction [subparagraph d) of Article 6º]. N.º 3 of Article 6º of the CIMI defines what should be understood as land for construction:

3 – Land for construction shall be understood as land situated within or outside an urban agglomeration, for which a building or construction license or authorization has been granted, prior notification accepted or a favorable prior information report issued for a subdivision or construction operation, and also those which have been so declared in the acquisition document, except for land where the competent entities prohibit any of those operations, namely those located in green areas, protected areas or which, in accordance with municipal spatial planning plans, are allocated to public spaces, infrastructure or facilities. (Wording of Law n.º 64-A/08, of 31-12)

Here arrived, the CIMI also does not clarify the notion of properties with housing allocation.

Thus, pursuant to Article 11º, n.º 1 of the LGT we will have to resort to the general rules and principles of interpretation and application of laws, namely Article 9º, n.º 1 of the Civil Code. The cited article of the Civil Code provides as follows:

Interpretation should not be limited to the letter of the law, but should reconstruct from the texts the legislative intent, having especially in account the unity of the legal system, the circumstances in which the law was drafted and the specific conditions of the time in which it is applied.

To ascertain the circumstances in which the Law was drafted we can make use of the discussion of the bill n.º 96/XII (2ª) in the Assembly of the Republic, discussion which can be consulted in the Diário da Assembleia da República DAR I Série n.º 9/XII/2 2012.10.11, of 11-10-2012.

The Secretary of State for Tax Affairs, in his intervention in the Assembly of the Republic, stated the following:

For the tax system to be fairer it is decisive to promote the broadening of the tax base, requiring increased effort from taxpayers with higher incomes and thus protecting Portuguese families with lower incomes.

For the tax system to promote more equality it is fundamental that the budget consolidation effort be distributed among all taxpayers and focus on all types of income, covering with special emphasis capital income and high-value properties. This matter, it will be recalled, was extensively addressed in the ruling of the Constitutional Court.

Finally, for the tax system to be more equitable, it is crucial that everyone be called upon to contribute in accordance with their real tax-paying capacity, granting the tax administration enhanced powers to control and supervise situations of tax fraud and evasion.

In this sense, the Government presents, today, a set of measures that effectively strengthen a fair and equitable distribution of the adjustment effort by a broad and comprehensive set of sectors of Portuguese society.

This proposal has three essential pillars: the creation of special taxation on urban properties worth more than 1 million euros; the increase of taxation on capital income and capital gains on securities; and the strengthening of rules to combat tax fraud and evasion.

First, the Government proposes the creation of a special rate to tax high-value residential urban properties. It is the first time that Portugal has created special taxation on high-value properties intended for housing. This rate will be 0.5% to 0.8%, in 2012, and 1%, in 2013, and will apply to houses worth equal to or greater than 1 million euros. With the creation of this additional rate, the tax effort required of these owners will be significantly increased in 2012 and 2013.

As can be seen from the presentation of the bill, what was proposed to the deputies and what they approved was the creation of taxation of luxury real estate property, hedonistic and personal, which does not include land for construction.

Furthermore, in the case at hand the land for construction already has a determined destination, namely, in the subdivision permit, where the use for housing, commercial and service purposes is provided for.

For this reason, it will be necessary to clarify when one can understand that a property is allocated for housing purposes, namely whether it is when this destination is assigned to it in a licensing act or the like, or only when the actual assignment of this destination is materialized.

From the outset, the comparison of item n.º 28.1 of the TGIS with n.º 2 of Article 6.º of the CIMI, which defines the concept of residential properties, clearly points to the need for an actual allocation. The legislator, in using the expression "with housing allocation" intended to convey the requirement of the existence of a real and present functionality and not a future potentiality that does not yet exist and will not occur.

As to the relevance of Article 45º of the CIMI for the question at hand, that therein defined has no relationship whatsoever with the classification of properties, merely indicating the factors to be considered in the assessment of land for construction and not in their classification.

Accordingly, in light of the foregoing it is to be concluded that the property for construction in question is excluded from the scope of incidence of item n.º 28.1 of Stamp Tax.

Furthermore, the principle of legal certainty is a sub-principle of the Rule of Law (Article 2º of the CRP). "The principle of legal certainty and protection of citizens' confidence intersects with the requirements of tax legality in the principle of precision, clarity and determinability of tax rules and tax acts, with special relevance to those relating to the essential elements of taxes, but not only." In Course of Tax Law, Jónatas Machado and Paulo Nogueira da Costa, Coimbra Editora, 2nd Ed. pages 67 and 68.

The law must establish in a clear, precise and determined manner the essential elements of the tax obligation, this being the essence of the principle of tax typicality.

In light of the foregoing, the interpretation now presented is that which best aligns with the protection of legal certainty, not allowing arbitrariness with respect to the scope of incidence of this tax.

The appreciation of the other defects is prejudiced by the solution reached above.

VI. DECISION

In light of all that is set forth above, it is decided to judge as meritorious, due to violation of law, the present challenge, annulling the Stamp Tax assessments n.ºs 2012 ... and 2013 ..., in the total value of €13,560.68.

The value of the case is set at € 13,560.68 pursuant to Article 97º-A, n.º 1, a), of the CPPT, applicable by virtue of subparagraphs a) and b) of n.º 1 of Article 29.º of the RJAT and n.º 2 of Article 3.º of the Regulation of Costs in Tax Arbitration Proceedings.

The value of the arbitration fee is set at €918.00, pursuant to Table I of the Regulation of Costs in Tax Arbitration Proceedings, to be paid in full by the Respondent, since the Claimant obtained full deferment of its request, pursuant to Articles 12.º, n.º 2, and 22.º, n.º 4, both of the RJAT, and Article 4.º, n.º 4, of the aforementioned Regulation.

Notify the parties.

Lisbon, 12 December 2013

André Festas da Silva

Text prepared by computer, pursuant to Article 138.º, n.º 5, of the Code of Civil Procedure, applicable ex vi of Article 29.º, n.º 1, subparagraph e), of the Tax Arbitration Regime.

Frequently Asked Questions

Automatically Created

Does Stamp Tax (Imposto do Selo) under Verba 28 of the TGIS apply to building land (terrenos para construção)?
According to CAAD Process 115/2013-T, the application of Stamp Tax under Verba 28 of the TGIS to building land (terrenos para construção) was challenged on the grounds that such land represents only potential construction use, not actual housing allocation. The claimant argued that Stamp Tax Item 28 should only apply to properties with actual housing use, not undeveloped land classified as 'land for construction' under Article 6(3) of the IMI Code. The property in question had no buildings erected and therefore lacked any actual residential, commercial, or service use that would justify Stamp Tax assessment.
How is a building land plot classified under Article 6(3) of the Portuguese IMI Code for Stamp Tax purposes?
Under Article 6(3) of the Portuguese Municipal Property Tax Code (CIMI), building land is classified as urban property of the type 'land for construction' (terreno para construção). For Stamp Tax purposes under Item 28 of the TGIS, the Tax Authority applied an allocation coefficient for 'housing' when determining the taxable patrimonial value. However, this classification was contested because land for construction has no actual building or construction, only potential future use. The claimant argued this material concept of land for construction means there exists no property capable of actual housing use, only a virtual expectation that construction may occur.
What is the CAAD arbitration procedure for challenging Stamp Tax assessments in Portugal?
The CAAD (Administrative Arbitration Center) arbitration procedure for challenging Stamp Tax assessments in Portugal is governed by Decree-Law 10/2011 of January 20. Taxpayers file a request for arbitral tribunal constitution pursuant to Article 2(1)(a), Article 5(2), Article 6(1), and Articles 10 et seq. of the statute, in conjunction with Article 99(a) and Article 102(1)(f) of the Tax Procedure and Process Code. The procedure involves: (1) filing the arbitration request with CAAD; (2) acceptance by the CAAD President; (3) notification to the Tax Authority; (4) designation of arbitrator(s); (5) Tax Authority response; (6) tribunal hearing under Article 18 of RJAT; and (7) issuance of arbitral decision. In Process 115/2013-T, the sole arbitrator was designated by the Deontological Council, the first hearing occurred on October 24, 2013, and parties waived oral testimony and arguments.
Can taxpayers contest Stamp Tax liquidation acts on urban building land through tax arbitration?
Yes, Portuguese taxpayers can contest Stamp Tax liquidation acts on urban building land through tax arbitration at CAAD. Process 115/2013-T demonstrates this mechanism, where the claimant company successfully initiated arbitration proceedings to challenge Stamp Tax assessments totaling €13,560.68 on land for construction. The arbitration jurisdiction covers challenges to Stamp Tax under Item 28 of the TGIS, which applies to property ownership. Taxpayers can raise substantive arguments (whether the tax legally applies to building land), procedural challenges (double taxation for the same fiscal period), and constitutional issues (retroactivity, equality principles) through this arbitral forum as an alternative to traditional judicial review.
What were the legal grounds for challenging the 2012 and 2013 Stamp Tax assessments on building land in CAAD Process 115/2013-T?
The legal grounds for challenging the 2012 and 2013 Stamp Tax assessments in CAAD Process 115/2013-T included: (1) substantive grounds - land for construction lacks actual housing allocation required for Stamp Tax Item 28, having only potential future use; (2) unconstitutional retroactivity - the 2012 assessment violated Article 103(3) of the Portuguese Constitution by using December 31, 2011 values for October 31, 2012 taxable events; (3) double taxation for fiscal year 2012 - two separate assessments were issued for the same period due to transitional rules in Law 55-A/2012; (4) violation of Stamp Tax nature - Item 28 improperly taxes property ownership rather than operations revealing income or wealth; and (5) unconstitutional double taxation - the same property was subject to both IMI and Stamp Tax, violating equality principles under Article 104(3) of the Constitution.