CAAD Process 158/2018-T: Stamp Tax on Vertical Property Under Clause 28.1 TGIS

Arbitral Decision

I - REPORT

1. A..., S.A., a commercial joint-stock company, with tax identification number..., with registered office at..., (hereinafter referred to as the Applicant or Taxpayer), filed on 28 March 2018 a request for constitution of a collective arbitral tribunal, pursuant to the provisions of subparagraph a) of no. 1 of article 2, no. 5, subparagraph a), article 6, no. 1 and article 10, nos. 1 and 2, all of Decree-Law no. 10/2011, of 20 January (hereinafter referred to as RJAT) in which the Tax and Customs Authority is requested (hereinafter referred to as the Respondent or TA), with a view to the declaration of illegality and consequent annulment of the acts of assessment of stamp duty provided for in item 28 of the General Table of Stamp Duty (TGIS), in the total amount of €106,892.67, with reference to the year 2015, as well as the declaration of illegality of the act of rejection of the administrative objection no. ...2017....

2. The request for constitution of the Collective Arbitral Tribunal was accepted by the Honorable President of CAAD, and notified to the Respondent on 4 April 2018.

3. In accordance with and for the purposes of the provisions of subparagraph a) of no. 2 of article 6 of RJAT, by decision of the Honorable President of the Deontological Board of CAAD, duly notified to the parties within the prescribed periods, the undersigned were appointed as arbitrators, who communicated to the Deontological Board and to the Administrative Arbitration Center (CAAD) their acceptance of the appointment within the period stipulated in article 4 of the Deontological Code of CAAD.

4. On 21 May 2018, the parties were notified of these appointments, and neither manifested the will to refuse them, in accordance with the combined provisions of article 11, no. 1, subparagraphs a) and b) in the wording given to them by Law no. 66-B/2012, of 31 December.

5. The Collective Arbitral Tribunal was constituted on 12 June 2018, in accordance with the provision of subparagraph c) of no. 1 of article 11 of RJAT, in the wording given to it by article 228 of Law no. 66-B/2012, of 31 December.

6. Duly notified to do so, by means of a ruling issued on 12 June 2018, the Respondent filed its reply on 27 August 2018, and on that same date proceeded to attach the administrative file.

7. By ruling issued on 10 September 2018, duly notified to the parties, which justified, inter alia, the waiver of the hearing referred to in article 18 of RJAT and the submission of final arguments, 30 October 2018 was indicated as the foreseeable deadline for the issuance and notification of the final decision.

8. In support of its request, the Applicant invoked in summary, and with relevance for what matters here, the following (which is mentioned largely by transcription):

8.1. (...) "was notified of the assessment of Stamp Duty (IS) provided for in item 28 of the General Table relating to the year 2015 in the total amount of €106,892.67, levied on the tax property value of the independent units of the urban property registered under the article..., of the union of civil parishes of ... and ... (see article 3 of the request for arbitral opinion, documents nos. 1 to 28 attached to it and AP),

8.2. "The assessments relating to the year 2015 and levied on a property that was not constructed on such date occurred following the declaration in form 1 of IMI – filed in September 2016 – that the completion of the work on the property was on 28 December 2015" (see article 8 of the request for arbitral opinion),

8.3. "On 2 May 2017, the Applicant was notified by the Loures Tax Office... to proceed with the division of the request submitted which concerned IMI and IS, into two administrative objections regarding each of the mentioned taxes" (see article 10 of the request for arbitral opinion and document no. 30 attached to it)

8.4. "On 16 May 2017, the Applicant filed an Administrative Objection against the acts of assessment and collection of stamp duty relating to Stamp Duty (IS) provided for in item 28 of the General Table relating to the year 2015 in the total amount of €106,892.67, levied on the tax property value of the independent units of the urban property registered in the cadastre under the article..." (see article 11 of the request for arbitral opinion, document no. 31 attached to it and AP),

8.5. "On 3 November 2017, by letter from the Finance Directorate of Lisbon, the Applicant was notified of the draft final decision (...)" (see article 12 of the request for arbitral opinion),

8.6. "On 16 May 2017 [1], the Applicant expressed itself at the prior hearing stage (see article 13 of the request for arbitral opinion),

8.7. On 2 January 2018, by letter from the Finance Directorate of Lisbon dated 29 December 2017, the Applicant was notified of the decision to reject the objections filed" (see article 14 of the request for arbitral opinion),

8.8. The Applicant further makes the following considerations (under article 16 of the request for arbitral opinion): "The Tax Administration did not uphold the administrative objection in that it required the annulment of the assessments of Stamp Duty (IS) provided for in item 28 of the General Table relating to the year 2015 in the total amount of €106,892.67, levied on property constituted in vertical ownership, because the assessment considered the TPV resulting from the sum of the TPV of all divisions or floors capable of independent use and individualized in the cadastral entry, when it should have considered the TPV attributed to each of those floors or divisions intended for housing, it being this question which is now being challenged that constitutes the object of this arbitration".

8.9. The Applicant concludes, as appears from its request, that the "acts of assessment of Stamp Duty provided for in item 28 of the General Table relating to the year 2015, in the total amount of €106,892.67, levied on the tax property value of the independent units of the urban property registered in the cadastre under the article..., of the union of civil parishes of ... and ... should be declared null or annulled"

1. As already mentioned, on 27 August 2018 the Tax and Customs Authority proceeded to attach the administrative file and filed its reply,

9.1. Where, fundamentally, and in very brief summary (which is likewise mentioned largely by transcription) it advocates for the maintenance of the assessments here at issue, arguing, fundamentally for what matters here, that:

9.2. "The property is described in the cadastre under the regime of full ownership, constituted by various floors and 14 floors or divisions capable of independent use, all for housing purposes" (see article 7 of the reply and pages 107 and 108 of AP),

9.3. "On the date in question, the Applicant held full ownership of the property in question, valued in accordance with CIMI, as part of the general valuation of urban properties, described as 'property in full ownership with floors or divisions capable of independent use', with tax property value (VP) exceeding €1,000,000.00, (see article 12 of the reply),

9.4. "In compliance with and in accordance with the provisions of article 6, no. 2 of Law no. 55-A/2012, of 29/10, which added item no. 28 to TGIS, with the amendment made by Law no. 83-c/2013 of 31/12 and whose respective rule of taxable base refers to urban properties, valued in accordance with CIMI, with VP equal to or exceeding €1,000,000.00 and, in accordance with its no. 28.1, housing use, the TA proceeded to notify the collection documents for payment of the assessment in question". (see article 13 of the reply),

9.5. (...) "What is at issue are collection notes/assessments that result from the direct application of the legal rule, which translates into objective elements, without any subjective or discretionary evaluation" (see article 15 of the reply),

9.6. "The concept of property is defined in article 2, no. 1 of CIMI, and it is provided in its no. 4 that under the regime of horizontal property, each autonomous fraction constitutes a property" (see article 18 of the reply),

9.7. "It follows from the analysis of the normative provision that a 'property in full ownership with floors or divisions capable of independent use' is, unequivocally, different from a property under the regime of horizontal ownership, constituted by autonomous fractions, that is, several properties" (see article 19 of the reply),

9.8. "Where properties are under the regime of full ownership, not having autonomous fractions, to which the tax law attributes the qualification of property, because in the notion of property of article 2 of CIMI, only the autonomous fractions of property under the regime of horizontal ownership are considered properties – no. 4 of the cited article 2 of CIMI" (see article 20 of the reply),

9.9. "The provision of item 28.1 of TGIS does not constitute any violation of the principle of equality, there being no discrimination in the taxation of properties constituted in horizontal ownership and properties in full ownership with floors or divisions capable of independent use, or between properties with housing use and properties with other uses" (see article 30 of the reply),

9.10. "What is intended to be concluded is that these rules of valuation procedures, the rules on cadastral registration, and also the rules on the assessment of parts capable of independent use, do not permit the assertion that there should be an equivalence of the property under the regime of full ownership to the regime of (horizontal) property [2], this being because, as already mentioned, it would be illegal and unconstitutional" (see article 35 of the reply),

9.11. "It is thus a consequence that the taxable event of the stamp duty of item 28.1 consists in the ownership of urban properties whose tax property value contained in the cadastre, in accordance with CIMI, is equal to or exceeding €1,000,000.00, the property value relevant for purposes of the taxable base of the tax being thus the total property value of the urban property and not the property value of each of the parts that compose it, even when capable of independent use" (see article 37 of the reply),

9.12. The Respondent concludes its pleadings advocating for the dismissal of the request and consequent maintenance of the contested assessment acts.

Preliminary Matters

1. The Collective Tax Arbitral Tribunal has material jurisdiction and is properly constituted, in accordance with articles 2, no. 1, subparagraph a), 5 and 6 of RJAT,

2. The parties have legal personality and capacity, are legitimate and are properly and lawfully represented (articles 3, 6 and 15 of the Tax Procedure and Process Code, ex vi, article 29, no. 1, subparagraph a) of RJAT).

3. No exceptions were raised and the proceedings are free from nullities.

II - GROUNDS

A. MATTER OF FACT

A.1. Facts Established as Proven

With relevance for the assessment and decision of the substantive issue raised, the following facts are established as proven:

i- On 31 December 2015, the Applicant was the owner of the property registered in the respective urban cadastre under article no. ... of the Union of Civil Parishes of ... and ... and described as a "property in full ownership with floors or divisions capable of independent use", constituted by various floors and 14 floors or divisions capable of independent use, all for housing purposes (see pages 107 and 108 of AP);

ii- The tax property value of the property in question exceeds one million euros, and was not constituted under the regime of horizontal ownership on 31/12/2015;

iii - The TPV (tax property values) of the floors (economic units) of the property in question, with housing use, are all below €1,000,000.00 (see documents nos. 1 to 28 attached with the request for arbitral opinion and AP);

iv- The Applicant was notified of assessments of Stamp Duty, relating to the year 2015, in relation to each of such divisions with housing use, in the global amount of €106,892.67, contained in the aforementioned documents, which are reproduced here;

v - The Applicant did not make voluntary payment of the amounts indicated, having provided security under the form of unilateral voluntary mortgage with a view to suspending the coercive collection of the taxes now being contested (see document no. 34 attached with the request for arbitral opinion);

vi- Against the cited assessment acts that were notified to it, the Applicant filed, on 16/05/2017, an administrative objection with the Loures Tax Office..., to which the number ...2017... was assigned;

vii - The draft decision, embodied in a ruling of 27/10/2017, was notified to the Applicant through letter no. ... of 17/11/2017, from the Finance Directorate of Lisbon, and the latter exercised the right of hearing on 20/11/2017.

viii - By letter dated 29-12-2017, the Applicant was notified of the final decision which determined the partial allowance of the administrative objection in question;

ix - In the opinion prepared by the TA, which supported both the draft and the final decision on the administrative objection that culminated in its rejection (as far as the stamp duty at issue in these proceedings), the following is stated, inter alia, and for what matters here:

"(...) "18. At the date of the facts, item 28.1 of the general table, annexed to the Stamp Duty Code, was in force, which provided for the taxation of ownership, usufruct or surface rights of urban properties – residential properties or land for construction whose construction, authorized or planned, was for residential purposes, in accordance with the Stamp Duty Code – whose TPV contained in the cadastre, in accordance with the Code of IMI, was equal to or exceeding €1,000,000.

1. The tax was assessed annually, and in relation to each property, by the central services of the TA, applying, with the necessary adaptations, the rules of the Code of IMI (article 23, no. 7 of the Stamp Duty Code, in force on the date),

2. One of these rules consisted of the obligation for the tax to be assessed based on the TPV existing in the cadastre on 31/12 of each year (article 113, no. 1 of the Code of IMI).

3. Now, taking into account that 31/12/2015 is the date that is relevant for purposes of assessing the IS of 2015, regarding item 28, and also taking into account that a specific parcel of land – in this case, residential properties or land for construction whose construction, authorized or planned, was for residential purposes, in accordance with the Code of IMI – can only be taxed once, in each year, it appears to us that we should conclude that, in view of the declaration form 1 no. ..., filed on 21/09/2016, in which account was given of a new property (in full or vertical ownership) built on the article ... (provisional article P...) with effect from 28/12/2016:

i) the assessment that fell on the land for construction (assessment no. ...) is not due, as on 31/12/2015, it ceased to have that configuration (it being understood that, at the time of the issuance of this assessment no. ... [5/04/2016] no data was available regarding the property in full or vertical ownership but only regarding the article..., land for construction, which meets the requirements of the objective scope of taxation)

ii) the assessment actually due is that incurred on the article..., property in full or vertical ownership.

1. The objecting party refers that even if it is considered that, on 31/12/2015, a property in vertical (or full) ownership is at issue, this cannot be taxed by item 28.1, because, as the case law has been defending, the taxable base must be determined by the TPV attributed to each of the divisions capable of independent use and not by their sum.

2. Regarding this point, two notes;

23.1. decisions in the sense alleged by the objecting party only apply to the specific situations that were the subject of assessment therein (subject matter and parties), and are not extensible to those that were not;

23.2. the TA, within the scope of the Binding Information concerning process 2013000226 – IVE no. 4599 with the concurrent ruling of the Legal Substitute of the Director General of the TA, of 11/02/2013, expressed itself in the following terms (only points 6 and 7 are transcribed):

"6. For purposes of IMI and consequently for purposes of subjection to stamp duty, item 28 of the General Table, annexed to the Stamp Duty Code, by reference of that Code, the property in full ownership with parts or divisions capable of independent use (so-called full ownership) and the property under the regime of horizontal ownership, are with respect to the concept of 'fiscal property' distinct, since in the latter case the autonomous fraction, for purposes of IMI, is integrated in the concept of property. This is an exception to the general rule, given that each autonomous fraction of a building subject to the regime of horizontal ownership belongs to an independent holder, who is the owner of his autonomous fraction and co-owner of the common parts of the property. § 7. Already regarding the first case (full ownership) although the property has parts or divisions capable of independent use, the legal tax concept is that this property constitutes a single unit, since its title, without prejudice to co-ownership, belongs only to a single owner. It should be noted that in this case, each floor or division of the property capable of independent use is listed separately in the cadastral registration and with the respective tax property value of each one of them, is only relevant for tax purposes, in view of the concept of cadastre contained in article 12 of CIMI and the matters regulated in the same code for the organization of cadastres. In fact, similar to what happened in the previous land tax and municipal property contribution, this is still justified in its successor IMI, such should be due to the need to reflect the autonomy that, within the same property, falls to each of its parts, which may be functionally and economically independent. This autonomization is justified because the same property may have use for commerce or housing, with or without lease, which is determinant (as was the case with the previous taxes in which the tax property value was determined by the value of rent or rental value) in the rules of tax valuation within CIMI, in view of the different allocation coefficients (article 41 of CIMI). In item 28 of the General Table annexed to the Stamp Duty Code, its subjection is, according to the literal expression contained therein, to the 'property' by which, on one hand, it is not the interpreter's role to distinguish where the legislator does not, and on the other, the matter relating to the taxable base is subject to the principle of tax legality, as provided in article 8 of LGT".

x - On 28-03-2018, the Applicant filed with CAAD a request for arbitral opinion which gave rise to these proceedings (see CAAD's procedural management information system),

A.2. Facts Established as Not Proven

With relevance for the decision, there are no facts that should be considered as not proven.

A.3. Grounds for the Matter of Fact Established as Proven and Not Proven

Regarding the matter of fact, the Tribunal does not need to pronounce itself on everything that was alleged by the parties; rather, it has the duty to select the facts that matter for the decision, to discriminate between proven and unproven matter [(see article 123, no. 2 of CPPT, and no. 3 of article 607 of the Code of Civil Procedure, applicable ex vi article 29, no. 1, subparagraphs a) and d) of RJAT)].

Thus, the facts relevant for the adjudication of the case are selected and defined according to their legal relevance, which is established in view of the various solutions to the question(s) of law (see article 596 of the Code of Civil Procedure, applicable ex vi article 29, subparagraph e) of RJAT.

Therefore, taking into account the positions assumed by the parties, in light of article 110, no. 7 of CPPT, the documentary evidence attached to the proceedings and the AP attached, the facts listed above are considered proven with relevance for the decision.

B. MATTER OF LAW

The object of the present request for arbitral opinion, as defined and circumscribed by the Applicant in its preamble, is the "challenge of the acts of assessment and collection of stamp duty relating to Stamp Duty (IS) provided for in item 28 of the General Table relating to the year 2015, in the amount of €106,892.67, levied on the tax property value of the independent units of the urban property registered in the cadastre under the article..., of the union of civil parishes of ... and ..., as well as the ruling rejecting the Administrative Objection filed".

Thus, the question that constitutes the thema decidendum, which has been the subject of recurring assessment in arbitral proceedings, is reduced[3] to determining whether, in a property not subject to the regime of horizontal ownership, the subjection to stamp duty, in accordance with item 28.1 of TGIS, is determined by the tax property value (TPV) corresponding to each of the parts of the property, economically independent and with housing use, as advocated by the Applicant, or whether, instead, it is determined by the sum of the TPVs of the floors or divisions of independent use and with housing use that compose it, as the TA contends.

Tax arbitral jurisprudence has consistently and uniformly decided (or at least in a significantly majority manner) in the sense advocated by the Applicant, in accordance, moreover, with the most recent understanding of the Supreme Administrative Court, as regards this segment.

Before addressing the issue to be resolved that the factual situation raises, a brief excursus on the relevant normative framework will be necessary.

The stamp duty (IS) on properties of significant tax property value was created by Law no. 55-A/2012 of 29 October, which introduced various amendments to the Stamp Duty Code, and, for what matters here, proceeded with the addition to the General Table of Stamp Duty of item 28.

The wording at the time of the underlying facts was as follows:

"28- Ownership, usufruct or surface rights of urban properties whose tax property value contained in the cadastre, in accordance with the Code of Municipal Property Tax (CIMI) is equal to or exceeding (euros) 1,000,000 – on the tax property value for purposes of IMI;

28.1. Per property with housing use – 1%;

28.2. Per 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 Ministry of Finance – 7.5%"

Subsequently, Law no. 83-c/2013, of 31 December (Budget Law 2014), through its article 194, amended the wording of item 28.1 of TGIS, which now reads as follows:

"28.1 Per residential property or per land for construction whose construction, authorized or planned, is for residential purposes as provided in the Code of IMI – 1%".

The interpretation of the taxable base rule contained in item 28.1 of TGIS cannot but be made on the basis of the various hermeneutical guidelines that flow from article 11 of LGT and article 9 of the Civil Code, and concerning which we rely on what is stated in the decision issued on 2/10/2013 within the scope of process no. 53/2013-T of CAAD:

"The relevance of the text of the law is especially emphasized in the interpretation of the taxable base rules of Stamp Duty, which are reduced to an amalgam, under a common denomination, of an incongruent set of taxes of completely distinct natures (on income, on expenses, on assets, on acts, etc.), which does not leave appreciable room for application of the primary interpretative criterion, which is the unity of the legal system that demands its overall coherence.

The recognized lack of coherence of Stamp Duty is particularly abundant in the case of this item no. 28.1, hastily included as part of the General Budget, by a fiscal legislator without perceptible overall fiscal orientation, who successively implements rules of tax increases according to the setbacks in budget execution, the impositions of international institutional creditors (represented by the "troika") and the oversight of the Constitutional Court.

In fact, although the "Statement of Reasons" of the Draft Law no. 96/XII/2ª, on which Law no. 55-A/2012 was based, makes reference to the praiseworthy concern of the Government to "reinforce the principle of social equity in austerity, ensuring an effective distribution of the necessary sacrifices to comply with the adjustment program" and its commitment "to ensuring that the distribution of these sacrifices will be made by all and not just by those who live on the income of their work", it is evident, on one hand, that these reasons of equity, certainly existing, did not begin to matter in mid-2012, already existing at the beginning of the year, when the General Budget entered into force, and on the other hand, that the scope of item no. 28.1, by additionally taxing properties with housing use and not also properties that do not have it, foreshadows that the concerns about social equity and the proclaimed intention to distribute the sacrifices among all, reaches far more some than it properly does all.

In this context, with no secure interpretative elements that permit detecting legislative coherence in the solution adopted in the referred item no. 28.1 or the correctness or incorrectness of the solution adopted (relevant for interpretative purposes in view of no. 3 of article 9 of the Civil Code), the content of the legal text must be the primary element of interpretation, in accordance with the presumption imposed by that same no. 3 of article 9, that the legislator knew how to express its thinking in adequate terms."

Here we note the markedly referential character of the rule of item no. 28.1 of TGIS, in view of the content of article 67, no. 2 of the Stamp Duty Code: "To matters not regulated in this Code relating to item 28 of the General Table, the provisions of CIMI apply subsidiarily". (emphasized)

It is thus necessary to collate, even if through simple mention (under penalty of unnecessary redundancy), the rules of the Code of IMI, more relevant and pertinent, that are intertwined with the interpretation and application of item 28.1 of TGIS.

Thus, in CIMI the concept of "property" is defined in its article 2 as follows:

"1. For the purposes of this Code, property is any parcel of land, including waters, plantations, buildings and structures of any kind incorporated or resting thereon, with a character of permanence, provided that it forms part of the patrimony of a natural or legal person and, under normal circumstances, has economic value, as well as waters, plantations, buildings or structures, in the circumstances above, endowed with economic autonomy in relation to the land where they are located, although situated in a parcel of land that forms an integral part of a different patrimony or has no property nature".

Defining further in CIMI, in articles 3 to 5, the species of properties, and under article 6 the species of urban properties, establishing in no. 3 of article 12 of CIMI that "each floor or part of property capable of independent use is considered separately in the cadastral registration, which also discriminates the respective tax property value".

As appears from the matter of fact established as proven, underlying the assessments put into issue is a property in vertical ownership that comprises various fractions intended for housing, all of which have a tax property value of less than one million euros.

This circumstance, and as has been decided by case law (both state and arbitral), precludes the application of item 28.1 of TGIS.

One can thus conclude, in the present case, that stamp duty (within the scope of Item 28.1 of TGIS) would only apply if one of the parts, floors or divisions for independent use presented a TPV exceeding €1,000,000.00.

Indeed, from the analysis of the invoked provisions of CIMI, in none of them is any distinction made between properties constituted under the regime of horizontal or full ownership.

As is emphasized within the scope of process no. 125/2018-T of CAAD", of 2018-07-06 (...) although no. 4 of article 2 expressly refers to the autonomous fractions of properties constituted under the regime of horizontal ownership as each constituting a property, the truth is that it does not exclude from such classification the divisions for independent use of properties constituted under the regime of full or vertical ownership.

And, where the law does not distinguish, the interpreter cannot do so."

The decision in question continues:

"Thus analyzed, the definition of property inherent in no. 1 of article 2 of CIMI, we do not discern any reason for not including therein the divisions for independent use of properties constituted under the regime of full ownership, since these constitute a parcel of land that forms an integral part of the patrimony of a natural or legal person and which has economic value.

It should be noted that each of these divisions or fractions is attributed a tax property value",

In view of what has been stated, this Tribunal does not discern reasons, either of fact or of law, to subscribe to a position different from that which has been upheld (beyond tax arbitral jurisprudence) by the Supreme Administrative Court, adhering without any reservations to what was decided in the Plenary Session of the Tax Litigation Section of 29/03/2017, delivered unanimously and reported by the Honorable Counselor Ana Paula Lobo, within the scope of process no. 0596/16, whose summary, being conclusive, is taken the liberty of transcribing:

"I- Item 28 of the General Table of Stamp Duty (TGIS) added by article 4 of Law no. 55-A/2012, of 29/10, does not apply to urban properties with one cadastral entry but constituted by parts with housing use and independent use to which independent TPVs were attributed, each of these of value below one million euros.

II- Since item 28 of the General Table made no distinction between properties under the regime of horizontal ownership and full/vertical ownership, and refers to the tax property value used for purposes of IMI, it will not be for its applicator to introduce any distinction, all the more so since this is a rule of taxable base.

III- If it was the legislator's intention to tax immovable property that, having a single cadastral entry because being constituted by parts capable of independent use, have attributed various tax values, and intended that for purposes of taxation in the context of stamp duty, the sum of these various tax property values should be taken into account, it would not have added the final part of the provision: "on the tax property value used for purposes of IMI":

IV. Nothing in the law imposing the consideration of any sum of all or parts of the TPVs attributed to the various parts of a property with a single cadastral entry, it also appears improper under the law to make such an arithmetic operation solely for purposes of the taxation enshrined in item 28 of the General Table of Stamp Duty"

Already after the issuance of the judgment whose summary has just been transcribed, and in the same sense, the judgment of 22/11/2017, reported by the Honorable Counselor Dulce Neto, within the scope of the Supreme Administrative Court process no. 01090/17, can be seen:

"Item 28 of the General Table of Stamp Duty (TGIS) added by article 4 of Law no. 55-A/2012 of 29 October, does not apply to urban properties with a single cadastral entry but constituted by parts with housing use and independent use to which individual and separate autonomous tax property values were attributed, each of them of value below one million euros".

Further, from the judgment of the same Court of 14/03/2018, within the scope of process no. 0158/18, reported by the Honorable Counselor Pedro Delgado, the following is derived:

"I- Regarding properties in vertical ownership, for purposes of the taxable base of Stamp Duty (Item 28.1 of TGIS, in the wording of Law no. 55-A/2012, of 29 October), subjection is determined by the combination of two factors: housing use and the TPV contained in the cadastre equal to or exceeding €1,000,000.

II- In the case of a property constituted in vertical ownership, the taxable base of IS must be determined, not by the TPV resulting from the sum of the TPV of all divisions or floors capable of independent use (individualized in the cadastral entry), but by the TPV attributed to each of those floors or divisions intended for housing"

It is also concluded here, similarly to what was stated within the scope of arbitral process no. 93/2017-T of 2017-06-26, which we appropriate data venia, "that in keeping with this jurisprudence, the assessments being contested are illegal, by virtue of a defect of law, since they do not fall within the field of application of item 28.1 of TGIS, the properties under the regime of full or vertical ownership that comprise fractions intended for housing capable of independent use that do not have any of them a tax property value exceeding €1,000,000.00"

In view of what has been stated, and without need for any other additional considerations, the request for arbitral opinion submitted by the Applicant is well-founded, by clear defect of law and error on the assumptions of fact and of law.

IV - DECISION

In view of what has been expounded, this Collective Arbitral Tribunal decides as follows:

a. to fully uphold the request for declaration of illegality of the stamp duty assessments of the year 2015, relating to item no. 28.1 of TGIS, made to the Applicant in the amount of €106,892.67, numbers 2016..., 2016..., 2016..., 2016..., 2016..., 2016..., 2016..., 2016..., 2016..., 2016..., 2016..., 2016..., 2016..., 2016..., 2016..., 2016..., 2016..., 2016..., 2016..., 2016..., 2016..., 2016..., 2016..., 2016..., 2016..., 2016..., 2016..., 2016...

b. to uphold the request for annulment of the aforementioned ruling rejecting the administrative objection filed against the assessments being contested, and

c. to condemn the Tax and Customs Authority to pay the costs of the proceedings.

V - VALUE OF THE PROCEEDINGS

In accordance with the provisions of article 306, no. 2 of the Code of Civil Procedure and article 97-A, no. 1, subparagraph a), of CPPT and article 3, no. 2 of the Regulation of Costs in Tax Arbitration Proceedings, the proceedings are valued at €106,892.67

VI - COSTS

In accordance with article 22, no. 4 of RJAT, the amount of costs is fixed at €3,060.00, in accordance with Table I annexed to the Regulation of Costs in Tax Arbitration Proceedings (at the charge of the respondent Tax and Customs Authority as decided above).

Let notification be made.

[Text prepared by computer, in accordance with the provisions of article 131 of the Code of Civil Procedure, applicable by reference to article 29, no. 1, subparagraph e) of the Legal Regime of Tax Arbitration, with blank verses and reviewed by the arbitrators].

[The wording of this judgment is governed by Portuguese spelling prior to the 1990 Orthographic Agreement, except as to transcriptions made].

Lisbon and CAAD, 29 October 2018

The Collective Arbitral Tribunal,

José Poças Falcão
(President)

José Coutinho Pires
(Member)

Adelaide Moura
(Member)