Process: 155/2015-T

Date: June 24, 2015

Tax Type: Selo

Source: Original CAAD Decision

Summary

CAAD arbitration case 155/2015-T addressed whether Portuguese Stamp Tax (Imposto do Selo) under items 28 and 28.1 of the General Stamp Tax Table (TGIS) applies to building land (terrenos para construção). The dispute arose from a €9,931.38 tax assessment issued under the transitional regime of Article 6(1)(f)(i) of Law 55-A/2012, which introduced Stamp Tax on high-value urban properties. The taxpayer challenged the assessment, arguing that item 28.1 of TGIS, which targets 'properties with residential dedication' (prédios de afetação habitacional), does not encompass undeveloped building land, even when intended for residential construction. The taxpayer cited multiple CAAD precedents supporting this interpretation. The Tax Authority (AT) countered that the concept of 'residential dedication' extends beyond completed residential buildings, incorporating the dedication coefficient used in property valuation under CIMI (Municipal Property Tax Code). The AT argued that since land for construction is valued using the same methodology as built properties, including dedication coefficients per Article 41 of CIMI, such land falls within the scope of item 28.1. The Authority emphasized that the legislator deliberately chose the broader term 'residential dedication' rather than 'properties intended for habitation,' suggesting an intent to cover additional property categories beyond Article 6(1)(a) of CIMI. The case exemplifies the interpretative conflict between literal tax law construction and expansive administrative interpretation. The taxpayer also sought €574.36 compensation for costs incurred in providing a bank guarantee during fiscal execution proceedings. This arbitration highlights the availability of CAAD tax arbitration as an alternative dispute resolution mechanism for challenging Stamp Tax assessments on real property in Portugal.

Full Decision

ARBITRAL DECISION

CAAD: Tax Arbitration

Case No. 155/2015-T

Subject: Stamp Tax, items 28 and 28.1 of TGIS, land for construction

PARTIES

Claimant – A…, NIPC PT …, represented by B… – …, SA, NIPC PT …, both with registered office at Largo …, nº … – … … Lisbon.

Respondent – AUTORIDADE TRIBUTÁRIA E ADUANEIRA (AT) [Tax and Customs Authority].

I. REPORT

a) On 04-03-2015, the Claimant filed a request with the CAAD requesting, under the Legal Framework for Tax Arbitration (RJAT), the constitution of a singular arbitral tribunal (TAS).

b) The request is signed by a lawyer acting as representative of the Claimant.

THE REQUEST

c) The Claimant requests the annulment of a Stamp Tax (IS) assessment under item 28 of TGIS, dated 2012-11-07, relating to the transitional regime of article 6º no. 1 letter f) sub-letter i) of Law 55-A/2012, of 29 October, with the consequential legal effects, because the AT dismissed the administrative complaint procedure and the subsequent hierarchical appeal that it timely filed against said assessment, in the amount of 9,931.38 euros.

d) The assessment relates to the property registration item …º - ... – Lisbon.

e) In addition to the annulment of the assessment, it requests "the necessary legal consequences" and compensation for provision of undue bank guarantee in fiscal execution proceedings, in the amount of 574.36 euros, relating to verified expenses incurred in its provision.

f) It argues, in summary, that the assessment act is unlawful due to violation of the scope provision of item 28.1 of TGIS, since in its reading this does not encompass the type of urban property "land for construction".

g) In support of its understanding, it invokes various decisions adopted by the CAAD in other identical proceedings and regarding the same type of real property (land for construction) and the same tax.

THE SINGULAR ARBITRAL TRIBUNAL (TAS)

h) The request for constitution of the TAS was accepted by the President of the CAAD and automatically notified to the AT on 05.03.2015.

i) The arbitrator who signs this decision was appointed by the CAAD's Deontological Board, and the parties were notified thereof on 23.04.2015. The parties did not express any wish to refuse the appointment, in accordance with the combined provisions of article 11.º no. 1 letters a) and b) of the RJAT and articles 6.º and 7.º of the Deontological Code.

j) The Singular Arbitral Tribunal (TAS) has therefore been duly constituted as of 11.05.2015 to consider and rule on the subject matter of this dispute (articles 2.º, no. 1, letter a) and 30.º, no. 1, of the RJAT).

k) All such acts are documented in the communication of constitution of the Singular Arbitral Tribunal dated 11.05.2015, which is hereby incorporated by reference.

l) On 11.05.2015, the AT was notified in accordance with article 17º-1 of the RJAT. It replied on 16.06.2015.

m) Together with its reply, the AT argued against holding the parties' meeting referred to in article 18º of the RJAT and implicitly against submissions. By request of 17.06.2015, the Claimant gave its consent to this procedural course suggested by the TAS.

n) Given that this proceeding raises issues identical to those already raised in many other proceedings already decided by the CAAD, the TAS, by order dated 17.06.2015, dispensed itself from scheduling the meeting referred to in article 18º of the RJAT and from setting a deadline for submissions.

o) Therefore, having both parties expressly waived the holding of the parties' meeting of article 18º of the RJAT and the production of submissions, such procedural acts were not conducted.

p) Following an invitation from the TAS directed to the Claimant, the latter submitted to the proceeding on 13.05.2015 both the notification of the order dismissing the administrative complaint and the notification of the order dismissing the subsequent hierarchical appeal.

PROCEDURAL PREREQUISITES

q) Legitimacy, capacity and representation - The parties possess legal personality, judicial capacity, are legitimate and are represented (articles 4.º and 10.º, no. 2, of the RJAT and article 1.º of Ordinance no. 112-A/2011, of 22 March).

r) Contradictory principle - The AT was notified in accordance with paragraph l) above. All procedural documents and all documents submitted to the proceeding were made available to the respective counterparty in the CAAD's Procedural Management System.

s) Dilatory exceptions - The arbitral proceeding is not subject to nullities and the request for arbitral decision is timely as it was submitted within the prescribed period in letter a) of no. 1 of article 10.º of the RJAT. Indeed:

The Claimant submitted the present request for arbitral decision to the CAAD on 04-03-2015 and the notice of the decision dismissing the hierarchical appeal is dated 02.02.2015 (as per documents submitted to the proceeding on 13.05.2015 by the Claimant).

SUMMARY OF THE CLAIMANT'S POSITION

Regarding the potential unlawfulness of the assessment acts due to non-conformity with the scope provision of item 28.1 of TGIS

t) The Claimant argues, in summary, that the assessment act is unlawful due to violation of the scope provision of item 28.1 of TGIS insofar as it concerns mere land for construction, even if intended for the construction of residential buildings thereon.

SUMMARY OF THE RESPONDENT'S POSITION

Regarding the potential unlawfulness of the assessment acts due to non-conformity with the scope provision of item 28.1 of TGIS.

u) The AT argues that the "notion of dedication of the urban property finds its basis in the section relating to the valuation of real property, which is understandable since the valuation of the real property (purpose) incorporates value to the real property, constituting a determining distinction fact (coefficient) for valuation purposes".

v) "As results from the expression 'value of authorized buildings', contained in article 45º-2 of CIMI, the legislator chose to determine the application of the valuation methodology for properties in general to the valuation of land for construction, and therefore to them shall be applicable the dedication coefficient provided in article 41º of CIMI".

w) And it argues that "for purposes of determining the tax patrimonial value of land for construction, the application of the dedication coefficient in the context of valuation is clear, therefore its consideration for purposes of applying item 28-1 of TGIS cannot be overlooked".

x) It clarifies that "the dedication of the real property (aptitude or purpose) is a coefficient that contributes to the valuation of the real property, in determining the tax patrimonial value, applicable to land for construction".

y) Summarizing its reasoning, it ends by expressing that "Item 28 of TGIS itself refers to the expression 'properties with residential dedication', calling for a classification that overlaps the types provided for in no. 1 of article 6.° of CIMI."

z) The AT understands that "the concept of 'properties with residential dedication', for purposes of the provision of item 28 of TGIS, comprises both built properties and land for construction, particularly in view of the literal element of the norm", since "the legislator does not refer to 'properties intended for habitation', having opted for the notion of 'residential dedication', a different and broader expression whose meaning is to be found in the need to integrate other realities beyond those identified in article 6.°- 1, letter a) of CIMI".

aa) It concludes that the assessment acts are lawful in light of the CIS and the CRP, therefore they should remain in the legal order as they constitute a correct application of law to the facts.

II - ISSUES FOR THE TRIBUNAL TO RESOLVE

The issues before the TAS concern only the interpretation and application of legal rules.

On this matter, in particular, the CAAD has already pronounced itself in various decisions in which the underlying question is the same, as has the STA itself, that is, the discussion concerns the scope of the scope provision of items 28 and 28-1 of TGIS.

The limit of interpretation is the letter, the text of the norm. What remains thereafter is the "task of interconnection and assessment that escapes the literal domain".

Starting from the principle that every norm has a provision and a substance, the question that arises here is to determine, by delimiting, whether the scope provision, as drafted – in its provision - (urban properties… with residential dedication), encompasses or not the legal-fiscal reality defined in law as "land for construction".

III. PROVEN AND UNPROVEN FACTUAL MATTER AND REASONING

Facts considered relevant to the decision to be adopted are hereby established as proven, with the respective documents indicated (proof by documents) as their basis.

Proven Facts

  1. The Claimant is registered as the full owner of the urban property of the type "land for construction", registered at the time of assessment in the urban property register U-…º of the parish of ..., municipality of Lisbon - As per the urban property record attached with the request for arbitral decision.

  2. The description of the urban property is as follows: "Type of property: land for construction" – As per the urban property record attached with the request for arbitral decision.

  3. In the urban property record attached with the request for arbitral decision, under "valuation data" it states: "type of location coefficient: habitation" and contains a box indicating: "Ca – 1.00".

  4. The urban property in question had, at the date of assessment, a tax patrimonial value (CIMI) of 1,986,275.96 - As per the tax notice attached with the request for arbitral decision.

  5. The Claimant was notified on an unspecified date in December 2012 of the Stamp Tax (IS) assessment under item 28.1 of TGIS, document identification 2012 … (single installment), generating a tax collection of 9,931.38 euros - as per the assessment notice attached with the request for arbitral decision.

  6. This tax was assessed on the sole basis that: "The assessment made complies with provisions of letters a) through f) of no. 1 of article 6º of Law 55-A/2012, of 29 October" - as per the assessment notice attached with the request for arbitral decision.

  7. The Claimant did not proceed to payment of the assessed tax and a fiscal execution proceeding was commenced against it, wherein it provided a bank guarantee with a view to obtaining suspension of execution, having spent up to the date of submission of the request for arbitral decision to the CAAD the amount of 574.36 euros – As per documents 4 and 5 submitted by the Claimant and absence of the AT's objection regarding the probative value of the documents – agreement of the parties.

  8. The Claimant filed against the assessment an administrative complaint procedure (no. …2013…) and a subsequent hierarchical appeal procedure (no. …2013…), both dismissed on grounds other than untimeliness, having been notified of the order rendered in the latter through official communication dated 02.02.2015 – As per documents submitted by the Claimant with the request of 13.05.2015.

  9. The Claimant submitted the present request for arbitral decision to the CAAD on 04-03-2015 - Registration in the CAAD's SGP.

Unproven Facts

There exists no other factual matter alleged that has not been considered proven and that is relevant to the resolution of the procedural dispute.

The factual matter established results from the documents submitted by the Claimant, whose authenticity in relation to their originals, contents and probative assessments did not merit disagreement from the AT. The AT did not submit the PA (administrative file), certainly because its presentation would prove redundant (and therefore would be a materially useless act) given the documents submitted by the taxpayer, in that these do not suffer, in the implicit reading made thereof by the Respondent, from any formal or substantive alteration. Hence the fact set out in paragraph 7) was considered established by implicit agreement of the AT, as noted above.

IV. CONSIDERATION OF THE ISSUES FOR THE TAS TO RESOLVE

Item 28.1 TGIS and sub-letters i) and ii) of letter f) of no. 1 of article 6.º of Law no. 55-A/2012 contain a concept not used in any other tax legislation, which is "property with residential dedication".

The most approximate concept to the literal tenor of the expression used is that of "residential properties", which no. 2 of article 6.º of CIMI defines as encompassing "buildings or constructions" licensed for residential purposes or, in the absence of a license, that have as their normal purpose residential ends.

However, the non-coincidence of the terms of the expression used in item no. 28.1 of TGIS ("property with residential dedication") with that extracted from no. 2 of article 6.º of CIMI ("residential properties") points toward the conclusion that it was not intended to use the same concept.

Furthermore, in the same article, a clear distinction is made between residential urban properties and land for construction.

Following closely other CAAD decisions rendered on the same matter, it is understood that the word "dedication", in this context of use of a property, should signify "action of assigning something to a particular use".

Thus, it must be concluded that the available interpretive elements, including the "circumstances in which the law was enacted and the specific conditions of the time in which it is applied", clearly point toward the conclusion that it was not intended to encompass within the scope of item no. 28.1 situations of urban properties that are not yet dedicated to habitation, namely land for construction.

Furthermore, with the State Budget Law for 2014, item 28.1 TGIS was expressly amended, so as to include, from 01.01.2014 onwards, land for construction, which reinforces the conviction that such properties were not encompassed by the wording in effect until 31.12.2013.

We cite in this regard part of the decision adopted in CAAD Case 6/2015-T, on the same subject matter, to which we adhere:

"Interpretive hypotheses of the concept of 'property with residential dedication'

In CIMI, the concept of 'property with residential dedication' is not used in the classification of properties. Nor is this concept found, with this terminology, in any other statute.

Thus, in the absence of exact terminological correspondence of the concept of 'property with residential dedication' with any other used in other statutes, several interpretive hypotheses may be advanced.

The starting point for interpretation of that expression 'properties with residential dedication' is, naturally, the text of law, and it is on the basis thereof that the 'legislative intent' must be reconstructed, as required by no. 1 of article 9.º of the Civil Code, applicable by virtue of the provision of article 11.º, no. 1, of the LGT.

Concept of 'property with residential dedication' as referring to residential properties

The concept closest to the literal tenor of this expression used is manifestly that of 'residential properties', defined in no. 2 of article 6.º of CIMI as encompassing 'buildings or constructions' licensed for residential purposes or, in the absence of a license, that have as their normal purpose residential ends.

If it be understood that the expression 'property with residential dedication' coincides with that of 'residential properties', it is manifest that the assessments will suffer from error regarding the factual and legal presuppositions, as all the properties in relation to which Stamp Tax was assessed under the aforementioned item no. 28.1 are land for construction, without any building or construction required by that no. 2 of article 6.º to satisfy that concept of 'residential properties'.

Therefore, if the interpretation is adopted that 'property with residential dedication' means 'residential property', the assessment whose declaration of unlawfulness is sought will be unlawful, because there exists in none of the land parcels any building or construction.

However, the non-coincidence of the terms of the expression used in item no. 28.1 of TGIS with that extracted from no. 2 of article 6.º of CIMI points toward the conclusion that it was not intended to use the same concept.

Concept of 'property with residential dedication' as a concept distinct from 'residential properties'

The word 'dedication', in this context of use of a property, has the meaning of 'action of assigning something to a particular use'. ( )

'When, as is the rule, norms (legislative formulas) bear more than one meaning, then the positive function of the text is expressed in giving stronger support to or suggesting more strongly one of the possible meanings. For among the possible meanings, some will correspond to the most natural and direct meaning of the expressions used, whereas others will fit within the verbal framework of the norm only in a forced, artificial manner. Now, in the absence of other elements that would induce the choice of the less immediate meaning of the text, the interpreter should in principle opt for that meaning which best and most immediately corresponds to the natural meaning of the verbal expressions used, and in particular to their technical-legal meaning, in the assumption (not always accurate) that the legislator knew how to express his intent correctly'. ( )

The relevance of the text of law is especially emphasized in the matter of interpretation of provisions regarding the scope of Stamp Tax, which are reducible to an amalgam, under a common denomination, of an incongruous set of tributes of completely distinct natures (on income, on spending, on patrimony, on acts, etc.), which leaves scarcely any appreciable margin for application of the primary interpretive criterion, which is the unity of the legal system, which demands its global coherence.

The recognized lack of coherence of Stamp Tax is particularly exuberant in the case of this item no. 28.1, hastily included outside the General State Budget, by a fiscal legislator with no perceptible overall fiscal guidance, who successively implements provisions for fiscal increases in response to budget execution setbacks, the impositions of international institutional creditors (represented by the 'troika') and oversight by the Constitutional Court.

In fact, although in the 'Statement of Reasons' of the Bill no. 96/XII/2.ª ( ), on which Law no. 55-A/2012 was based, reference is made to the laudable concern of the Government to 'strengthen the principle of social equity in austerity, ensuring an effective distribution of the sacrifices necessary to meet the adjustment program' and to its commitment 'to ensure that the distribution of such sacrifices will be made by all and not only by those who live on the income of their work', it is manifest, on the one hand, that those reasons of equity, certainly existing, did not begin to apply in mid-2012, already existing at the beginning of the year, when the General State Budget came into effect, and on the other hand, that the scope of item no. 28.1, by taxing additionally properties with residential dedication and not also properties that do not have it, suggests that the concerns for social equity and the proclaimed intention to distribute sacrifices among all reaches much more some than it does all.

In this context, with no interpretive elements ensuring that allow detection of legislative coherence in the solution adopted in the aforementioned item no. 28.1 or the correctness or incorrectness of the solution adopted (relevant for interpretive purposes in light of no. 3 of article 9.º of the Civil Code), the tenor of the legal text must be the principal element of interpretation, in conformity with the presumption imposed by the same no. 3 of article 9.º, that the legislator knew how to express his intent in adequate terms.

In light of those meanings of the words 'dedication' and 'dedicate', which are 'to give purpose' or 'to apply', the formula used in that item no. 28.1 of TGIS manifestly encompasses the properties to which purpose has already been given for habitation, the properties already applied to residential purposes, such that it is important to inquire whether it will also encompass properties that, despite not yet being applied to residential purposes, are intended for these purposes.

To this end, it will be necessary to clarify when it may be understood that a property is dedicated to residential purposes, in particular whether this is when such purpose is assigned to it by allotment permit or licensing act or similar, or only when the actual assignment of such purpose is materialized.

From the outset, the comparison of item no. 28.1 of TGIS with no. 2 of article 6.º of CIMI, which defines the concept of residential properties, points toward the conclusion that effective dedication is necessary.

In fact, a building or construction licensed for habitation or, even without a license, but that has habitation as its normal purpose, is, in light of no. 2 of that article 6.º, a residential property, as such classification is given therein to 'buildings or constructions licensed for such purposes or, in the absence of a license, that have each of these purposes as their normal destination'.

Therefore, on the assumption that the legislator of Law no. 55-A/2012 knew how to express his intent in adequate terms (as required by article 9.º, no. 3, of the Civil Code that it be presumed), if it were intended to refer to those properties already licensed for habitation or that have habitation as their normal purpose, certainly it would have used the concept of 'residential properties', which would express perfectly and clearly its intent, in light of the definition given by that no. 2 of article 6.º of CIMI.

Consequently, it should be presumed that the use of a different expression is intended to refer to a distinct reality, such that, in sound hermeneutics, 'property with residential dedication' cannot be a property merely licensed for habitation or intended for that purpose (that is, it will not suffice that it be a 'residential property'), having to be a property that already has actual dedication to that purpose.

That this is the meaning of the expression 'dedication', in the same context of property classification that CIMI undertakes, is confirmed by article 3.º in which, regarding rural properties, reference is made to those 'that are dedicated or, in the absence of concrete dedication, have as their normal purpose use generating agricultural income', which shows that dedication is concrete, effective. In fact, as can be seen from the final part of this text, a property may have as its purpose a particular use and be or not be dedicated to it, which shows that dedication, at the level of the connection of a property to a particular use, is something more intense than mere purpose and which may or may not occur, downstream of this and not upstream. ( )

Moreover, the text of law, in adopting the formula 'property with residential dedication', instead of 'urban properties of residential dedication', which appears in the aforementioned 'Statement of Reasons', points strongly toward the conclusion that dedication to residential purposes must already be materialized, as only then will the property have such dedication.

In the case at hand, we are faced with a reality even more distant from residential dedication, which is that of there not existing any building or construction at all, and therefore one cannot consider as existing a dedication that presupposes its existence.

On the other hand, the legislative intention not to extend the scope to land for construction was expressly stated by the Government when presenting to the Plenary of the Assembly of the Republic the Bill 96-XII, by the voice of the Secretary of State for Tax Affairs:

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

The express reference to 'houses' as the target of the scope of the new tribute leaves no room for doubt regarding legislative intent.

On the other hand, no reference to 'land for construction' is found in the discussion of the aforementioned bill.

With respect to article 45.º of CIMI, it has no relationship with property classification, merely indicating the factors to be considered in the valuation of land for construction. What is considered there, in making reference to the 'building to be constructed', is the consideration of the intended use of the land, which, as has been seen, is something that, in the context of CIMI, does not imply dedication and occurs prior to it."

COMPENSATION FOR PROVISION OF UNDUE GUARANTEE

With respect to the request for the AT to be condemned to pay compensation for provision of undue guarantee, article 171.º of CPPT provides that "compensation in case of bank guarantee or equivalent improperly provided shall be requested in the proceeding in which the lawfulness of the executable debt is contested" and that "compensation must be requested in the complaint, objection or appeal or in case its ground is subsequent within 30 days after its occurrence".

Thus, it is unequivocal that the judicial challenge proceeding encompasses the possibility of condemnation in payment of compensation for provision of undue guarantee and indeed is, in principle, the appropriate procedural means to make such request, which is justified by evident reasons of procedural economy, as the right to compensation for provision of undue guarantee depends on what is decided regarding the lawfulness or unlawfulness of the assessment act.

The request for constitution of the arbitral tribunal has as its corollary that it is in the arbitral proceeding that the "lawfulness of the executable debt" will be discussed, such that, as results from the express tenor of that no. 1 of the aforementioned article 171.º of CPPT, the arbitral proceeding is also the appropriate one to consider the request for compensation for provision of undue guarantee.

Moreover, the cumulation of requests relating to the same tax act is implicitly presupposed in article 3.º of the RJAT, when speaking of "cumulation of requests even if relating to different acts", which makes it clear that cumulation of requests is also possible regarding the same tax act, and requests for compensation for compensatory interest and condemnation for provision of undue guarantee are susceptible of being encompassed by that formula, such that an interpretation in this sense has, at least, the minimum verbal correspondence required by no. 2 of article 9.º of the Civil Code.

The regime of the right to compensation for provision of undue guarantee is contained in article 53.º of the LGT.

In the case at hand, the assessment error is attributable to the AT, as it made it on its own initiative and the Claimant in no way contributed to that error being committed, therefore, it has the right to compensation for the guarantee provided.

The documents submitted to the proceeding by the Claimant allow determination of the compensation amount even now, such that the condemnation need not be made with reference to what would be assessed in execution of this decision (article 609.º of the 2013 Code of Civil Procedure and article 565.º of the Civil Code), nor indeed was this promoted by the taxpayer.

For the Claimant in ii) of the final request (somewhat apart from what it affirms in article 59º of the request for arbitral decision) petitions only and concretely the condemnation of the AT in the amount of 574.36 euros, this quantitative that the Respondent did not place in issue, accepting the probative value of the documents that evidence it, submitted with the designation of Documents no. 4 and 5 in the annex to the request for arbitral decision.

V. OPERATIVE PART

Based on and in accordance with the grounds set out above, the judgment is:

• The Claimant's request for annulment of the Stamp Tax (IS) assessment under item 28 of TGIS, dated 2012-11-07, relating to the transitional regime of article 6º no. 1 letter f) sub-letter i) of Law 55-A/2012, of 29 October and regarding property registration item …º - ... – Lisbon, with document identification 2012 … (single installment), generating a tax collection of 9,931.38 euros, is granted, and the tax act expressed in this document is hereby annulled, as it is in non-conformity with the scope provision of Stamp Tax contained in items 28 and 28-1 of TGIS.

• The AT is condemned to proceed with the refund of whatever has been paid to it under the annulled tax act.

• The request for the condemnation of the AT to pay the Claimant 574.36 euros as compensation for provision of undue bank guarantee (article 171º CPPT and article 53º of the LGT) is also granted, and the Respondent is condemned to make such payment.

Value of the proceeding: in accordance with the provision of article 3.º, no. 2, of the Regulation of Costs in Tax Arbitration Proceedings (and letter a) of no. 1 of article 97ºA of CPPT), the value of the proceeding is hereby fixed at 10,505.74 euros.

Costs: in accordance with the provision of article 22.º, no. 4, of the RJAT, the amount of costs is hereby fixed at € 918.00, according to Table I annexed to the Regulation of Costs in Tax Arbitration Proceedings, to be borne by the Respondent.

Notify.

Lisbon, 24 June 2015

Singular Arbitral Tribunal (TAS),

Augusto Vieira

Text prepared by computer in accordance with the provision of article 131.º, no. 5, of the CPC, applicable by reference to article 29.º of the RJAT.

The drafting of this decision is governed by the spelling prior to the Orthographic Agreement of 1990.

Frequently Asked Questions

Automatically Created

Does the Portuguese Stamp Tax (Imposto do Selo) under Verba 28.1 of the TGIS apply to building land (terrenos para construção)?
The application of Stamp Tax under Verba 28.1 of TGIS to building land (terrenos para construção) is disputed. While the Tax Authority argues that 'properties with residential dedication' includes building land intended for residential construction based on property valuation rules in CIMI, taxpayers contend that Verba 28.1 applies only to completed residential buildings, not undeveloped land. CAAD arbitration case 155/2015-T addressed this issue, with the taxpayer citing multiple CAAD precedents supporting the exclusion of building land from this tax provision.
What was the outcome of CAAD arbitration process 155/2015-T regarding Stamp Tax on urban building plots?
CAAD arbitration process 155/2015-T concerned a €9,931.38 Stamp Tax assessment on building land under the transitional regime of Law 55-A/2012. The taxpayer requested annulment of the assessment, arguing that item 28.1 of TGIS does not apply to terrenos para construção, and sought €574.36 compensation for bank guarantee costs. While the complete decision is not provided in the excerpt, the taxpayer referenced various CAAD decisions in identical proceedings that ruled in favor of taxpayers on this issue, suggesting established jurisprudence excluding building land from Verba 28.1's scope.
Can taxpayers challenge Stamp Tax assessments on building land through CAAD tax arbitration in Portugal?
Yes, taxpayers can challenge Stamp Tax assessments on building land through CAAD tax arbitration. Case 155/2015-T demonstrates this process: the taxpayer filed a request for arbitration after exhausting administrative remedies (complaint and hierarchical appeal were dismissed). The arbitration was filed within the legal deadline under Article 10(1)(a) of RJAT (Legal Framework for Tax Arbitration). CAAD arbitration provides an alternative to judicial courts for resolving tax disputes, offering a faster and specialized forum for contesting assessments related to Stamp Tax on real property.
How does the transitional regime under Article 6 of Law 55-A/2012 affect Stamp Tax on high-value properties?
The transitional regime under Article 6(1)(f)(i) of Law 55-A/2012, enacted on October 29, 2012, introduced Stamp Tax on ownership of high-value urban properties. This regime targets properties exceeding certain valuation thresholds with annual Stamp Tax liability. Case 155/2015-T involved an assessment dated November 7, 2012, shortly after the law's enactment. The transitional provisions created immediate tax obligations for existing property owners, leading to numerous disputes regarding the scope of taxable properties, particularly whether 'properties with residential dedication' under item 28.1 of TGIS encompasses undeveloped building land or only completed residential structures.
What legal arguments support excluding terrenos para construção from the scope of Verba 28 and 28.1 of the Tabela Geral do Imposto do Selo?
Legal arguments for excluding terrenos para construção from Verba 28 and 28.1 of TGIS include: (1) Literal interpretation - the provision refers to 'properties with residential dedication,' which naturally describes completed residential buildings, not undeveloped land; (2) CIMI classification - Article 6(1) of the Municipal Property Tax Code distinguishes between residential buildings and building land as separate property categories; (3) CAAD precedent - multiple prior arbitration decisions ruled that building land falls outside Verba 28.1's scope; (4) Legislative intent - if the legislator intended to tax building land, explicit inclusion would be necessary given tax law's strict construction principle; (5) Legal certainty - the dedication coefficient in property valuation serves a different purpose than defining tax incidence and should not expand the taxable base beyond clearly enumerated property types.