Summary
Full Decision
ARBITRAL DECISION
I – REPORT
A. – PARTIES
A..., hereinafter referred to as the Claimant, with Tax Identification Number..., resident at Rua de..., nº..., ...-... Porto, filed a request on 11 January 2018 for the establishment of a single arbitral tribunal in tax matters, under the provisions of article 2º, nº 1, paragraph a) of Decree-Law nº 10/2011, of 20 January (Legal Framework for Tax Arbitration - RJAT) and articles 1º, paragraph a) and 2º of Ordinance nº 112-A/2011, of 22 March, with the purpose of resolving the dispute opposing the Claimant to the Tax and Customs Authority, hereinafter referred to as the Respondent.
B. – CONSTITUTION OF THE TRIBUNAL
1. The request for the establishment of the Arbitral Tribunal was accepted by the President of CAAD on 12/01/2018 and automatically notified to the Claimant and to the Tax and Customs Authority on 12/01/2018, with the President of the respective Deontological Council having appointed the undersigned as arbitrator of the Single Arbitral Tribunal, under the provisions of article 6º, nº 1, of the RJAT, which appointment was accepted in accordance with the legally established terms.
2. On 28/02/2018, the Parties were notified of this appointment, in accordance with the combined provisions of article 11º, nº 1, paragraph b) of the RJAT, and articles 6º and 7º of the Deontological Code, and did not express any intention to refuse the arbitrator's appointment.
3. Under these circumstances, the Tribunal was constituted on 20/03/2018, in accordance with the provisions of paragraph c), nº 1, article 11º of Decree-Law nº 10/2011, which was notified to the Parties on that date.
C. – CLAIM
The Claimant requests that the Arbitral Tribunal declare the illegality and consequent annulment of the Municipal Property Tax (IMI) assessments identified in the case file, in the total amount of 5,200.96 euros, in accordance with the terms described in the Request for Arbitral Pronouncement, and, consequently,
determine the restitution of the tax that was paid by the Claimant, plus compensatory interest calculated from the date of payment 08/01/2018 until full reimbursement.
D. – PROCEDURAL COURSE
Following the notification of the date of constitution of the Arbitral Tribunal on 20/03/2018, the subsequent procedural steps proceeded as follows:
- On 20/03/2018 – The Respondent was notified to, in accordance with nºs 1 and 2 of article 17º of the RJAT, present a response within 30 days and, if desired, request the production of additional evidence and submit to the Arbitral Tribunal a copy of the administrative file, via electronic means.
- On 30/04/2018 – The Respondent presented a Response to the Request for Arbitral Pronouncement, submitted a dispatch designating the legal representatives of the Respondent, and inserted in the CAAD online "Platform" the administrative file, with the Claimant being notified of all such matters.
- On 07/05/2018 – The Arbitral Tribunal ordered the notification of the Claimant to make written submissions on the matter of the exceptions raised by the Respondent, which was executed on that date.
- On 21/05/2018 – The Claimant presented written response to the exceptions raised by the Respondent.
- On 26/05/2018 – The Arbitral Tribunal dispensed with the meeting referred to in article 18º of the RJAT, set a deadline for the Parties to present optional and successive written submissions, and indicated 30 July for the rendering of the decision, which was notified to the Parties on 28/05/2018.
- On 06/06/2018 – The Claimant informed the Tribunal that he would not submit written submissions as it was a matter of law, which was notified to the Respondent on that date.
- On 18/06/2018 - The Respondent presented written submissions.
- On 21/06/2018 – The Tribunal requested from the Parties the submission of their procedural documents in word format, in accordance with the principle of cooperation.
- On 13/07/2018 – As the Respondent had not submitted its procedural documents in word format, the request was reiterated, with the deadline for rendering the final decision being extended to the deadline established in article 21º, nº 1 of the RJAT (the article number corrected by dispatch of 24/07/2018, which by material error had initially been indicated as 26º).
- On 21/08/2018 – The request for presentation by the Respondent of the procedural documents in word format was reiterated once again, in accordance with the principle of cooperation, as no response was obtained.
- On 05/09/2018 – Rendering of the arbitral decision.
E. – CLAIM OF THE CLAIMANT AND ITS GROUNDS
In support of the Request for Arbitral Pronouncement, the Claimant alleged, in summary, the following:
- The request for arbitral pronouncement is submitted against the following IMI tax acts, concerning the taxation period of 2013 | 2014 | 2015 | 2016, in relation to the fraction designated by the letter 'M' of the property registered under article..., of the parish of ..., which are tainted with illegality and, therefore, should be annulled.
YEAR
ASSESSMENT ID.
AMOUNT
2013
2013 …
€ 1,333.58
2014
2014 …
€ 1,333.59
2015
2015 …
€ 1,333.58
2016
2016 …
€ 1,200.22
- To that end, the Claimant alleges that paragraph n) of nº 1 of article 44º of the Tax Benefits Statute (EBF) provides that the following are exempt from IMI: "Properties classified as national monuments and properties individually classified as being of public interest or municipal interest, in accordance with the applicable legislation."
- This is because, in the previous wording, the provision contemplated all properties that formed part of a determined urban complex of public interest, and only with Decree-Law nº 108/2008, of 26 June, did the legislator begin to make reference to individually classified properties.
- Without specifying the meaning of the expression "individually classified properties".
- As this is the wording of the provision under examination, it is clear that with the new wording of paragraph n), nº 1, article 44º of the EBF, the legislator only indicated the object of exemption,
- without specifying which or what properties are capable of being subsumed under the normative provision.
- For which reason, since the Tax Benefits Statute does not provide us with the concept of individually classified property,
- it must be filled in accordance with the general rules and principles of interpretation and application of laws, according to article 11º of the General Tax Law (LGT).
- For this purpose, nº 1 of article 9º of the Civil Code prescribes that "Interpretation must not be confined to the letter of the law, but must reconstruct from the texts the legislative thought, taking especially into 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."
- Reconstructing the legislative thought, the Claimant believes that the legislator did not wish to exclude from the tax benefit all properties that form part of an urban complex,
- but only and exclusively those properties that, not forming part of an urban complex, and in themselves individually cannot be classified by the competent Ministry (Ministry of Culture).
- Because otherwise, there is no possibility of individual classification of properties as being of public interest.
- In its opinion, this possibility derives from the fact that the Ministry of Culture, under the Legal Framework for Heritage, Law nº 107/2001, of 8 September, only awards classification to urban complexes.
- Never awarding the classification of real property of public interest to individual properties that are not monuments, as the Tax Authority claims.
- In fact, nº 1 of article 15º of the Legal Framework for Heritage provides that "Real property may belong to the categories of monument, complex or site, in accordance with the terms in which such categories are defined under international law (…)".
- For which reason, in light of what is enshrined in the Legal Framework for Cultural Heritage, only those real properties that represent material evidence with cultural value can be qualified as real property of public or municipal interest,
- and which in turn can fulfill the concept of real property, namely monuments, complexes or sites,
- without, at any time, an isolated property being able to accede to such qualification.
- For which reason the classification is made by the Ministry of Culture by reference to clusters and/or urban complexes.
- In the case under examination, the Ministry of Culture, under the Legal Framework for Heritage, awarded to the urban complex of ... and ... the classification of real property of public interest – see Ordinance 400/2010, DR 114, II Series, 15/06/2010,
- since it is an urban cluster that embodies a complex with cultural interest that demarcates a specific geographical circumscription of the city of Porto.
- With effect, as the fraction designated by the letter 'M' of the property registered under article..., of the parish of ..., is an integral part of that real property, with the denomination of urban complex of public interest,
- it fulfills the concept of real property for purposes of heritage classification,
- although it departs from the legal concept of real property (as rural or urban property).
- In the Claimant's view, in light of the matter at hand, this does not assume relevance, insofar as we are speaking of properties as urban complexes.
- Thus, having demonstrated that the ratio legis of article 44º, nº 1, paragraph n) of the EBF points to the effect that the expression individually classified property, by reference to the Legal Framework for Heritage, should be interpreted as monument, site or urban complex, the illegality of the IMI assessment acts should be recognized.
- According to the Claimant, this understanding is endorsed by the Ministry of Culture in an opinion that was requested by a taxpayer whose property is located in the same urban cluster referred to in document nº 5 attached to the initial petition.
- In this opinion, the Ministry of Culture considered regarding that fraction that "(…) it is a component of a classified property, viewed as an indivisible unit, from the perspective of Law 107/2001 and from the conceptual perspective, of the doctrine of heritage."
- Insofar as, in light of a prior procedure for qualification and classification of national architectural heritage, the Ministry of Culture "(…) chose to include entirely the property in question in the property to be classified, considering that it contributed to heritage value."
- Further emphasizing that the classification of property on an individual basis is not provided for in the Legal Framework for Cultural Heritage.
- Considering that residential complexes, together with monuments, constitute a category of property, defined in light of international law, subsequently adopted by national law, in accordance with which an architectural complex is qualified as: "(…) a homogeneous grouping of urban or rural constructions, notable for their historical, archaeological, artistic, scientific, social or technical interest and sufficiently coherent to be the object of a topographical delimitation." – article 1º, nº 2 of the Convention for the Protection of Architectural Heritage of Europe, Granada, 3 October 1985.
- Concluding thus that also in obedience to concepts of international law "(…) the classification of a complex is nonetheless a classification of individuals (…)",
- And should therefore be subsumed within the scope of applicability of paragraph n), nº 1, article 44º of the EBF.
- The Claimant further alleges that this is the jurisprudence of this Tax Arbitration Center, which, examining similar circumstances, observed that properties situated in an area qualified as an area of national interest should benefit from the tax exemption.
- Considering it established in the reasoning of the decision just mentioned, handed down in the context of case nº 325/2014, of 08/11/2014, that "Article 15º, nº7, of Law 107/2001 expressly states that 'immovable cultural property included in the list of world heritage integrates, for all purposes and in the respective category, property qualified as being of national interest'."
- The list of national heritage includes properties located in a determined urban cluster thus qualified by the Ministry of Culture.
- Hence, it has considered that "(…) as provided for in article 15º of Law 107/2001 and article 3º of Decree-Law 309/2009, property classified as being of national interest is designated as a 'national monument', regardless of whether it is a single building, complex or site, and it is clear that the properties that comprise the complex or site are covered by that classification."
- To which it adds, clarifying: "The fact that individually classified properties may coexist, in the case of delimitation of a complex or site, in accordance with article 56º of Decree-Law 309/2009, only has provisional relevance for delimiting the protection zone of that property until the publication of the classification of the complex or site (cf. nº 2)."
- Establishing that only "For this reason it is understood that article 44º of the Tax Benefits Statute distinguishes between 'property classified as a national monument' and 'property individually classified as being of public or municipal interest', only requiring individualization in relation to these latter two categories, not to those of national interest."
- "It is a fact that there are authors such as José Casalta Nabais or Nuno Sá Gomes, who have advocated a restrictive interpretation of exemptions for classified properties with the aim of excluding from the benefits granted under IMI or IMT all situations in which there has not been a procedure or act of individual classification as a national monument, property of public interest or municipal interest."
- However, "The aim of following the position expressed by these illustrious authors led to an amendment to article 6º g) of the IMT Code by Law 55-A/2010, of 31 December, leading to the exemption ceasing to cover 'acquisitions of properties classified as being of national interest, of public interest or of municipal interest, under Law nº 107/2001, of 8 September' to come to contemplate only 'acquisitions of properties individually classified as being of national interest, of public or municipal interest, in accordance with applicable legislation'."
- However, it is important to stress that "(…) the legislator did not simultaneously alter the tax benefits in the context of IMI in the same sense, despite having proceeded to modify the wording of article 44º itself of the EBF, with its paragraph n) continuing to require individual classification for the grant of the exemption only in the case of properties of public or municipal interest, but not making similar requirements for national monuments."
- "On the contrary, the provision of nº5 of article 44º, as worded by Law 3-B/2010, of 28 April, expressly provides that 'the exemption referred to in paragraph n) of nº. 1 is of an automatic nature, operating through notification of the classification as national monuments or of the individualized classification as properties of public or municipal interest (…)'."
- For which reason, according to the Claimant, in light of the arguments it has laid out, it cannot but be concluded that the individual classification of property for purposes of IMI exemption, in accordance with paragraph n), of nº 1, article 44º of the EBF, must be interpreted as monument, site or urban complex.
- This would mean that, if the fraction designated by the letter 'M' of the property registered under article..., of the parish of ..., is included in the urban cluster located between ... and ..., it should be classified as property of public interest, and as such covered by the tax benefit of IMI exemption.
- In light of all that has been expended, according to the Claimant, it is clear and evident that the Tax Authority erred in considering that the fraction under examination does not have the quality of property of public interest
- without taking into account that in accordance with the Legal Framework for Culture, only urban clusters deserve such qualification, although by reference to each of the properties that comprise them,
- which, in accordance with article 99º of the Code of Tax Procedure and Process, gives rise to its annullability.
- And, being annullable, they cannot remain in the Legal Order, which was thus violated.
- Regarding IMI for 2013, the Claimant considers that the Tax Authority only revoked the tax benefit of IMI in May 2015,
- which means that in the name of safeguarding the rights and interests acquired by taxpayers, it cannot now levy IMI for the year 2013, when on 31 December 2014 the tax exemption benefit that had previously been recognized was in effect.
- The Claimant further alleges that after the IMI assessment, it proceeded on 08.01.2018 to pay the tax that was charged to it.
- And that the reason for the assessment of the tax paid lies in the non-application to the present case of the tax benefit of IMI exemption,
- for which reason, in its opinion, there was an error imputable to the services, which, in accordance with article 43º of the LGT creates the right to compensatory interest in favor of the taxpayer.
- It is certain that, as results from article 100º of the LGT, "the tax administration is obliged, in the event of total or partial allowance of claims or administrative appeals, or of judicial proceedings in favor of the taxpayer, to the immediate and full restoration of the situation that would have existed if the illegality had not been committed, including the payment of compensatory interest, in accordance with the terms and conditions provided for by law".
- Given that in the case of the file at hand the assessment carried out is the result of a legal error arising from the non-application of the tax benefit of IMI exemption, the Tax Authority should be condemned to pay the claimant the tax paid in the amount of € 5,200.96, as well as the compensatory interest that accrues from the date of payment (08.01.2018) until actual restitution to the taxpayer.
- Accordingly, the present request for arbitral pronouncement should be judged as proven and meritorious and, consequently, the IMI assessment acts in question should be annulled, and
- furthermore the Tax Authority should be condemned to pay the amount of € 5,200.96 already paid by the Claimant, plus compensatory interest calculated from the date of payment (08.01.2018).
F. – RESPONSE OF THE RESPONDENT AND ITS GROUNDS
The Respondent, duly notified for this purpose, timely presented its Response, in which, in summary, alleged the following:
BY WAY OF EXCEPTION
- The challenged annulment of the IMI assessments now in dispute has as its basis article 44º/1-n) of the EBF.
- The assessments placed in question are the result of the decision denying the request for IMI exemption, handed down on 2015/05/28 by the Chief Financial Officer of Porto ....
- A decision to which the Claimant reacted by filing an Administrative Action, filed and recorded in the Administrative and Tax Court of Porto under nº .../16...BEPRT.
- Which is pending, with the Respondent having already presented the appropriate Defense and Submissions.
- The aforementioned Administrative Action, because it seeks to challenge the act in tax matters which is the basis of the IMI assessments here contested in the request for arbitral pronouncement - the decision that denied IMI exemption - because it fulfills the prerequisites of dependence and necessity, constitutes a true prejudicial issue within the framework of article 15º of the Code of Procedure in Administrative Courts ("CPTA"), ex vi article 29º/1-b) of the RJAT.
- With effect, as the IMI assessments sub judice depend on the legality of the decision denying the exemption and given that the discussion of the latter is open in the context of the aforementioned Administrative Action, it is necessary to conclude that the outcome of the latter constitutes a prejudicial issue, and as such, the Single Arbitral Tribunal must suspend the present instance until the question of discussion of the legality of the denial of the IMI exemption request is settled in the Administrative Action filed under nº .../16...BEPRT and consolidated in the legal order.
- Once there is a serious risk, given the substantive issue, as structured by the Claimant in the present case, that consistency between judgments is not guaranteed, or rather, the principle of homogeneity of decisions.
- It should also be noted that the general principle of non-appealability in tax arbitration does not guarantee the uniformization of judgments, which is particularly guaranteed in administrative courts by the possibility of appeal to higher instances.
- In other words, it is imperative from now on that the Single Arbitral Tribunal avoid being placed in the alternative of contradicting or reproducing a prior decision (article 580º/2 of the CPC).
- With a view to annulling the IMI assessments sub judice, the Claimant raises, throughout articles 55º to 58º of the request for arbitral pronouncement, the question of the alleged illegality of the decision revoking the IMI exemption, alleging that during the periods of 2013 and 2014 it was exempt from that tax and, as such, the tax benefit constitutes an acquired right, therefore incapable of revocation and subsequent assessment.
- However, the Claimant is laboring under a grave error, in that it does not distinguish between a tax act and an act in tax matters.
- With effect, by placing in question the decision revoking the IMI exemption by way of the request for arbitral pronouncement, the Claimant intends, in substance, for the Single Arbitral Tribunal to render a decision to the effect of recognizing that exemption provided for in article 44º/1-n) of the EBF, for the years 2013 and 2014, which implies the consideration of an alleged defect in the revocation of the exemption and the question of "acquired right" or "constituted right".
- Now, in light of this claim, it is the Administrative Action that constitutes the proper procedural means for the consideration of the matter (as it constitutes the means of reaction intended to consider acts in tax matters - article 97º/2 of the Code of Tax Procedure and Process ("CPPT"), and not the request for arbitral pronouncement (as this constitutes one of the means of reaction intended to consider tax acts - article 2º/1 of the RJAT).
- This means, therefore, that the Claimant intends to graft an Administrative Action onto the present request for arbitral pronouncement, which is not legally possible, for which reason the Single Arbitral Tribunal should abstain from partially knowing of the claim, since the procedural means used by the Claimant does not encompass the consideration of that.
- The impropriety of the procedural means constitutes a dilatory exception that bars the continuation of the proceeding, leading to dismissal of the instance as to the claim in question, in accordance with the provisions of articles 577º and 278º/1 both of the CPC, applicable ex vi of article 29º/1-e) of the RJAT.
- As a direct consequence of what has just been stated, it is equally necessary to raise the incompetence of the Single Arbitral Tribunal insofar as the consideration of such a matter goes beyond the competences reserved to it by law.
- In light of that article, it is clearly outside the jurisdiction of tax arbitration the consideration of any questions concerning the recognition of tax exemptions, under penalty of violation of the law.
- The question of revocation of the tax exemptions here in question is a matter reserved to the jurisdiction of the administrative and tax courts.
- The material incompetence of the Single Arbitral Tribunal for the consideration of the question of tax exemption constitutes a dilatory exception that bars the continuation of the proceeding, leading to dismissal of the instance as to the claim in question, in accordance with the provisions of article 576º/1 and 2 and article 577º-a) of the CPC ex vi of article 29º/1-e) of the RJAT.
BY WAY OF COUNTER-ARGUMENT
- The Claimant bases its claim by raising a single question, namely the circumstance that the IMI assessments rest on error regarding the facts and law, that is, in the Claimant's understanding, the urban property where its autonomous fraction is located is individually classified, insofar as it is an integral part of the "Urban complex of ... between ... and ..." (classified by Ordinance 400/2010, of 15 June) and, as such, the property meets the prerequisites established by law to enjoy the IMI exemption enshrined in article 44º/1-n) of the EBF.
- The Respondent, after analyzing the evolution of the concept of "classification" in the legal regime of heritage up to the arrival at Law 107/2001, of 8 September ("LBPC"), by which the bases of the policy and regime of protection and enhancement of cultural heritage were established, bases and regime which are those currently in force in the legal order, states that
- With effect, from a reading of the initial petition it is apparent that the Claimant uses interchangeably legal-patrimonial concepts that are completely distinct from one another, such as:
• The Category; and
• The Classification
- Through its article 15º, the LBPC came to establish three distinct legal-patrimonial concepts regarding immovable cultural property, namely:
• The Category (see article 15º/1);
• The Classification (see article 15º/2); and
• The Designation (see article 15º/3).
- Well then, and for what is relevant in the case sub judice, Category and Classification are not similar concepts, but concepts with a precise technical outline which therefore cannot be employed in a differentiated manner, as, in substance, the Claimant ends up proposing.
- Article 15º, nº 1, of the LBPC provides for three different Categories, namely:
• Monument
• Complex; and
• Site.
- The heritage legislator of 2001 opted for not defining those three categories, but merely limiting itself to adopting the definitions of Monument, Complex and Site contained in the conventions to which the Portuguese Republic has acceded, namely:
• The Convention for the Protection of World, Cultural and Natural Heritage, concluded in Paris on 1972/11/23 under the auspices of UNESCO ("UNESCO Convention of 1972");
• The Convention for the Protection of Architectural Heritage of Europe, concluded in Granada on 1985/10/03 under the auspices of the Council of Europe ("Granada Convention of 1985").
- Thus, the definitions of the Categories of Complex set out both in the Unesco Convention of 1972 and in the Granada Convention of 1985 share the same basic idea: a Complex consists of a group of buildings, in a group of constructions.
- Article 15º, nº 2, of the LBPC provides for three different Classifications:
• National Interest;
• Public Interest; and
• Municipal Interest.
- The Claimant is not correct in asserting that:
• The legislator of 2008 introduced the expression "individually classified properties (sic)", without specifying which or what properties are capable of being subsumed under the normative provision and without the EBF providing such a concept;
• The legislator did not wish to exclude from the exemption all properties that form part of an urban complex, but only and exclusively those properties that, not forming part of a complex, cannot be classified.
• An isolated property can never accede to the qualification of "Property of Public Interest".
- As to the first argument, it must be said that never since 2008 has there been dependence - as there is not today - on the definition of that pseudo-concept of "individually classified property", since such notion results crystallinely from the articulation of the law.
- Effectively:
• The definition of "property" is unequivocally contained in article 2º of the IMI Code ("CIMI") since 2003;
• The definition of "classification" is unequivocally contained in article 18º of the LBPC since 2001;
• The term "individually" is merely an adverb of manner.
- "Individually classified property" does not consist of any particular concept, for which reason, obviously, neither heritage culture legislation nor tax legislation provide for it anywhere.
- When tax law refers to "individually classified property" it is alluding to the concept of "classified property", but particularizing it, restricting it, saying that it is not every "classified property".
- The second argument of the Claimant, namely that the legislator did not wish to exclude from the exemption all properties that form part of an urban complex, but only wished to exclude from the exemption all properties that do not form part of an urban complex, is easily rebutted by mere consultation with the inventory system of classified property organized by the General Directorate of Cultural Heritage, as a direct consequence of articles 16º/2-b) and 19º of the LBPC, where dozens of examples of immovable cultural property that do not form part of an urban complex but consist of only one property appear.
- As to the third argument, there is called to the example already mentioned of the Pavilion of Portugal (in Lisbon), which is individually classified as being of "Public Interest" (Ordinance nº 240/2010) in light of the current concept of "Public Interest" established in the LBPC, and which only does not enjoy it as a result of, itself, already benefiting from the subjective exemption contained in article 11º of the CIMI.
- The true question to be decided in the present case is whether all and any urban properties integrated into the space called "Urban complex of ... between ... and ..." are exempt from IMI, knowing that the latter belongs to the category of "Complex":
- The definitions of the Categories of Complex set out both in the UNESCO Convention of 1972 and in the Granada Convention of 1985 share the same basic idea: a Complex consists of a group of buildings, in a group of constructions.
- From a reading of these definitions of the Category of Complex it immediately stands out the characteristic of "unity" around the "groups of constructions", for which reason the term "unity" was not used in a technical sense linked to a determined area of knowledge or science, for which reason it should be interpreted in light of its ordinary meaning.
- Underlying the Category of Complex was a requirement of unity or architectural cohesion, a requirement that is different from the concept of uniformity, that is, the definition of Complex appeals to a certain unity or architectural continuity, thus admitting that not all "groups of constructions" enjoy total uniformity or homogeneity, and that within a complex there may exist properties devoid of cultural value.
- For both conventions, a harmony or nexus (i.e., exceptional universal cultural value) among the diverse elements or parts of the whole suffices, and not a common connection among all elements or parts of the whole.
- The "Urban complex of ... between ... and ...", although dating back to the Modern Period, came to our days under an appearance distinct from that historical period, as it presents alongside constructions from the Modern Period, constructions from the Contemporary Period, as a result of such diverse factors as the historical evolution of the urban cluster, the durability of the materials employed, conscious aesthetic choices or even the non-observance of the respective urban planning regimes.
- It makes no sense to exempt from IMI a property that dates from 2010, when the tax benefit here in question constitutes an incentive to the conservation and maintenance of old properties by their owners.
- Although the property to which the fraction owned by the Claimant belongs is inserted in the "Urban Complex of ... between ..., it is not classified as Property of Public Interest", for which reason it does not meet the requirements to enjoy the tax benefit granted by article 44º, nº 1, paragraph n) of the EBF.
- The assessment contested is not tainted with illegality.
- It further appears that the tax exemption provided for in article 44º, nº 1, paragraph n) of the EBF can only be attributed to a property, whose fiscal concept, contained in article 2º of the CIMI, is broader than the civil concept of property, contained in article 204/2 of the Civil Code.
- A classified complex is not a property in the fiscal sense, but rather a universality.
- The so-called "Urban complex of ... between ... and ..." IS NOT A PROPERTY, either in the civil sense or in the fiscal sense!
- The Claimant has not fulfilled the burden of proof incumbent upon it of demonstrating that the property in which its fraction is inserted is classified.
- Document nº 5 of the initial petition is consistent, the "proposal for response to a request for opinion of Dr. A... on 'individual classification of property'" issued by the Regional Directorate of Culture of the North is merely an opinion act, given by an entity that is devoid of competence in the matter of recognition of the tax benefit here in question, namely regarding the question of discussion of the nature of the property.
- And that opinion act, moreover, is in direct opposition with the understanding conveyed by the General Directorate of Cultural Heritage, as per Document 9 attached:
"(...) Where a classification is such that the category of "Complex" was chosen, it is neither legitimate nor legally possible to conclude that the properties covered by it are to be regarded as individually classified."
- Only the General Directorate of Cultural Heritage could certify that the property in question here is classified in light of the LBPC, as is apparent from article 44º, nºs 5 and 6, of the EBF.
- The request for certification of the classification of properties is contained in the official model embodied in Document 10 attached.
- To this day, the Claimant has never attached any certificate properly issued by the DGPC.
- Furthermore, the Claimant has not even demonstrated that the property in question is entirely located within the triangulation formed by ..., ... and ....
- Proof that is not of little importance, since it results from document 8 attached that the property in question is (also) located at the following addresses: Dr. ... Street and ... Street.
- First, as is known, case law is not an immediate source of law (article 1º of the Civil Code).
- Moreover, court decisions only have efficacy in the specific case, only serving as a mediate or derived means of knowledge of the law.
- Contrary to countries that follow a common law legal system, court decisions do not constitute binding precedent, but merely persuasive precedent (article 8º/3 of the Civil Code).
- Second, none of those cases cited refers to the "Urban complex of ... between ... and ...", but to historic centers listed in UNESCO's "World Heritage List".
- None of those cases even refers to the 2nd segment of article 44º/1-n) of the EBF, that is, the question of "individually classified property", but rather to the first segment concerning classification as "National Monument".
- Precisely regarding the "Urban complex of ... between ... and ..." the arbitral decision handed down in case nº 354/2017-T was issued, and this decision was clear in deciding for the total lack of merit of the thesis (also) here conveyed by the Claimant.
- Third, as to the list of arbitral decisions, the Respondent merely wishes to state that it does not lose sight of the existence of jurisprudence established in the Administrative Arbitration Center (hereinafter "CAAD") regarding the matter in question, however it does not follow it, as the Respondent is governed by legal norms and not by jurisprudential currents.
- It further appears that the cited arbitral decisions did not have, neither near nor far, the list of questions raised by the Respondent throughout the Response presented in the present case, nor the documents attached to it, some and others that necessarily should be the subject of pronouncement by the tribunal, namely,
• The indissociability of the exemption here in question from the fiscal concept of property;
• The exclusive competence of the General Directorate of Cultural Heritage to attest to properties classified as being of National Interest, through certification contained in the official model, as per document 10 now attached;
• The unconstitutionality of the interpretation conveyed by the Claimant regarding article 44º/1-n) of the EBF (cf. infra).
- Only the arbitral decision handed down in case nº 354/2017-T addressed itself to the cultural property here in question, and this decision judged as lacking in merit the theses (also) now advocated by the Claimant.
- For the rest, it must merely be stated that the understanding conveyed by the Claimant and by the arbitral jurisprudence invoked by him goes contrary to:
• The most relevant tax doctrine produced on this matter
(see José Casalta Nabais, Nuno Sá Gomes, Carlos Paiva and Mário Januário);
• The administrative doctrine of the General Directorate of Cultural Heritage which - as already seen above - has understood that "(…) Where a classification is such that the category of 'Complex' was chosen, it is neither legitimate nor legally possible to conclude that the properties covered by it are to be regarded as individually classified" (cf. Document 9 now attached);
• The jurisprudence emanated, for example, from the Administrative and Tax Court of Porto (Document 11 now attached);
• The arbitral jurisprudence of the CAAD specifically regarding the cultural property here in question; and
• The understanding of the Portuguese State itself (Documents 12 and 13 attached).
- The interpretation proposed by the Claimant is an interpretation that offends the fundamental principle of tax equality insofar as, as owner of a fraction of urban property integrated into the so-called "Urban complex of ... between ... and ..." (property that dates from 2010) and devoid of individual cultural value, the Claimant seeks to be privileged, without justifiable reason, in relation to other owners of non-classified properties.
- On the other hand, the same interpretation results in the undue enjoyment of a benefit by someone who contributes nothing to the protection of cultural heritage, given that ownership of an urban property that dates from 2010 in no way compares to ownership of urban properties endowed with cultural value and individually recognized.
- Likewise, the interpretation given by the Claimant offends the principle of tax capacity, since, as owner of urban property devoid of cultural value, it seeks to enjoy a tax exemption intended to benefit owners of properties that actually possess cultural value and that are subject to financial charges and more burdensome bureaucratic procedures than owners of recently constructed properties.
- Finally, the argument conveyed by the Claimant results in the violation of the principle of local autonomy, insofar as it results in the grant of a tax benefit without any criterion, with obvious prejudice to municipal revenues, since IMI is, as its own name indicates, a municipal tax whose revenues revert to the benefit of the municipalities where the properties are located (cf. article 1º of the IMI Code).
- Consequently and in light of all that has been set forth, it must be concluded that the assessments now placed in question are supported by factual and legal grounds, and should therefore remain in the legal order.
G. - CLAIMANT'S RESPONSE TO THE EXCEPTIONS RAISED BY THE RESPONDENT
In response to the matter of exceptions invoked by the Respondent, the Claimant alleges the following:
Pursuant to nº 1 of article 279º of the CPC, a cause is dependent on the judgment of another already filed when the decision of the latter can affect and prejudice the judgment of the first, depriving it of its foundation or its reason for being.
It is thus understood as a prejudicial cause that in which discussion and determination is sought of a fact or situation which is an element or prerequisite of the claim filed in the dependent cause.
In this context, and where there exists between two actions this nexus of prejudiciality, the instance in the dependent cause should be suspended until the decision of the prejudicial cause.
However, it may not be advisable to suspend the instance in the dependent cause – namely because the latter is further advanced or it is foreseeable that the decision thereof will be rendered more expeditiously – if the prejudicial issue (discussed in the prejudicial action) was already being discussed in the dependent action (because it was raised in the respective case file).
It further appears that the possibility of suspension of the instance in the prejudicial cause – as a way to avoid incompatibility of judgments – is reinforced in situations in which the grounds invoked for the claim filed in the prejudicial cause are the same as those already invoked in the dependent action.
Now, considering that there effectively exists an administrative action running in the Administrative and Tax Court of Porto under nº .../13...BEPRT whose object is the annulment of the decision revoking the IMI exemption and of the decision denying, filed in the context of Hierarchical Appeal, which although this is prejudicial to the present case, it is foreseeable that the arbitral decision rendered will be more expeditious [considering the level of pending matters in the Administrative and Tax Court of Porto], and that as the Tax Authority itself recognizes the issue is already being discussed in the dependent action.
The prejudicial issue that is running in the Administrative and Tax Court of Porto under nº .../13...BEPRT should be suspended, not the dependent issue that is running in the present case.
On the other hand, the Tax Authority has alleged the incompetence of the Single Arbitral tribunal for the consideration of the tax exemption, indicating that the Claimant in articles 55º to 59º of its request for arbitral pronouncement seeks to question the alleged illegality of the decision revoking the IMI exemption.
First and foremost, it must be stated that, reading and re-reading the aforementioned petition, it does not result from the request for arbitral pronouncement and much less from the aforementioned articles that the Claimant seeks the annulment of the decision revoking the IMI exemption.
The Claimant alleges that it seeks the illegality of the tax assessments, for which reason it is not understood, in light of the petition, the interpretation given by the Tax Authority.
In these terms, we can always conclude that whoever is laboring under error in invoking the incompetence of the Arbitral tribunal will always be the Tax Authority, for which reason the exception of incompetence regarding the matter invoked by the Respondent shall always be without merit.
Concluding, it states that the administrative action running in the Administrative and Tax Court of Porto under nº .../13...BEPRT should be suspended; and the exception of incompetence regarding the matter of the Arbitral tribunal invoked by the Respondent shall always be without merit.
H. – SUBMISSIONS
- The Claimant informed the Tribunal that it would not present written submissions as it is a matter of law.
- The Respondent presented written submissions, in which it reiterated all the arguments raised in its Response.
I. – QUESTIONS TO BE DECIDED
In light of the positions assumed by the Parties in accordance with the arguments presented, the following are the questions to be considered and decided:
1 – Exception invoked by the Respondent of incompetence of the Arbitral Tribunal.
2 – Prejudicial issue of pendency of proceedings in the Administrative and Tax Court that has as its object the denial by the Respondent of the request for IMI exemption.
3 - As to the merits:
3.1 – Legality of the IMI assessments identified in the Request for Arbitral Pronouncement, in the total amount of 5,200.96 euros.
3.2 – Compensatory interest – Existence, or not, of the right to compensatory interest, under article 43º of the LGT, in the event the assessments are annulled and reimbursement of the amount claimed is ordered, which would have been unduly paid.
4 – Responsibility for payment of arbitral costs.
J. – PROCEDURAL PREREQUISITES
1. The Arbitral Tribunal is regularly constituted and is materially competent, in accordance with the provisions of paragraph a), nº 1, article 2º of the RJAT (Decree-Law nº 10/2011, of 20 January).
2. The Parties possess legal capacity and standing, are legitimate and are regularly represented, in accordance with articles 4º and 10º, nº 2 of the RJAT and article 1º of Ordinance nº 112/2011, of 22 March.
3. Considering the identity of the fact being taxed, the tribunal competent to decide and the grounds of fact and law invoked, the Tribunal admits the cumulation of requests for declaration of illegality of the tax acts which are the object of this proceeding, since the requirements established in article 3º, nº 1 of the RJAT are fulfilled.
4. The proceeding is not affected by defects that would affect its validity.
L. – MATTERS OF FACT
L. 1 – FACTS FOUND
With relevance for the consideration of the questions raised, the Tribunal finds the following facts to be proven:
1. The Claimant is the owner of the fraction designated by the letter "M" of the property registered under article..., of the parish of ....
2. The fraction in question has the following location, as per its respective property record: ... Nº: ... Place: Porto Postal Code: ...-... PORTO
3. The property in question was constructed in 2010 and is an integral part of the property designated "Urban complex of ..., between ... and ...", classified as complex of public interest, by Ordinance nº 400/2010, of 15 June, DR, II series.
4. The Claimant requested from the General Directorate of Culture of the North an opinion on the "individual classification of properties", and was sent a proposed response through the dispatch dated 13.07.2011, in which it is concluded that "the classification of a complex is nonetheless a classification of individuals, from which a set of negative externalities and other positive ones ensue for the owners and holders of property that are an integral part of this complex, which should be compared with the application of a legal and administrative block regulating intervention in cultural architectural heritage that is perfectly uniform and in accordance with the principles in force in international law".
5. By dispatch dated 11.07.2012, the Respondent communicated to the Claimant that, by dispatch of 06.09.2011, the exemption from IMT was granted, as provided for in paragraph g) of article 6º of the Code of Municipal Tax on Onerous Transfers of Real Property (IMT), approved by Decree-Law nº 287/2003, of 12 November, regarding the property identified in the request.
6. By dispatch dated 27.04.2015, the Respondent notified the Claimant for prior hearing – exemption of classified properties - paragraph n) of nº 1 of article 44º of the EBF – on the grounds that, on 26.09.2011, the date on which the request for exemption was filed, the amendment introduced to article 40º [current 44º], nº 1, paragraph n), of the Tax Benefits Statute, by Law nº 53-A/2006 of 29 December, which added a new literal element to the text of the provision – individual classification of the property – was already in force.
7. According to the same dispatch, the exemption was improperly granted because the classification in question was not individual but rather a classification of an urban complex was homologated, as a Complex of Public Interest, for which reason the revocation of the dispatch granting the exemption would be proposed.
8. The Claimant exercised the right of hearing through a request filed on 14.05.2015, pronouncing itself to the effect that the exemption be maintained.
9. On 28.05.2015, a decision denying the request for IMI exemption filed by the Claimant regarding the property in question was handed down by the Chief Financial Officer Porto ....
10. The Claimant filed an administrative action that is running in the Administrative and Tax Court of Porto, under nº .../16...BEPRT, challenging that dispatch.
11. The action just identified is pending, awaiting decision.
12. The Respondent proceeded to assess the IMI concerning the fraction in question, in a total amount of € 5,200.96, thus broken down:
- year 2013, assessment nº 2013..., in the amount of € 1,333.58;
- year 2014, assessment nº 2014..., in the amount of € 1,333.59;
- year 2015, assessment nº 2015..., in the amount of € 1,333.58;
- year 2016, assessment nº 2016..., in the amount of € 1,200.22;
13. The Claimant proceeded, on 08.01.2018, to pay the assessed tax.
14. The Claimant requested on 11 January 2018 the establishment of a single arbitral tribunal to settle the dispute in question.
15. The Single Arbitral Tribunal was constituted on 20/03/2018.
L. 2 – SUBSTANTIATION OF THE FACTS FOUND
The facts found to be proven are based on the documents contained in the administrative file, those indicated with respect to each of them, and on the factual elements brought to the proceeding by the Parties, insofar as their correspondence to reality was not contested.
L. 3 – FACTS NOT FOUND
There are no facts not found that are relevant to the consideration of the questions to be decided.
M. – MATTERS OF LAW
With the facts established, we proceed next to their legal classification and to the determination of the law to be applied, taking into account the questions to be decided that were stated.
First and foremost, and with respect to the so-called exceptions raised by the Respondent, it must be said the following:
M.1 – As to the alleged by the Respondent incompetence of the Arbitral Tribunal, it is important to address the same first, since, as a matter of public order, its consideration should precede that of any other matter, in accordance with articles 16º of the CPPT and 13º of the CPTA, by force of articles 21º, nº 1, paragraphs a) and c) of the RJAT and 2º, paragraph c) of the CPPT.
- According to the Respondent, it is the administrative action that constitutes the proper procedural means for the consideration of acts in tax matters and not the request for arbitral pronouncement, whose competence will be limited to the consideration of tax acts.
- For which reason, in its opinion, this arbitral tribunal will be incompetent as such matter goes beyond the competences reserved to it by law.
- Now, this argument lacks any legal support, since the request for arbitral pronouncement concerns only the IMI assessments which are identified in the file, the Claimant seeking the declaration of illegality and annulment of such acts.
- It is unequivocal that the object of the proceeding is IMI assessment acts and the claim filed is that for the declaration of illegality and annulment of those assessments, a matter that falls within the competence of arbitral jurisdiction and which, thus, this tribunal can address in accordance with the established in articles 2º, nº 1, paragraph a) of the RJAT, thus undermining the exception of material incompetence of the arbitral tribunal raised by the Respondent.
- The exception invoked by the Respondent of incompetence of this Arbitral Tribunal thus lacks foundation.
M.2 – With respect to the prejudicial issue, it must be said the following:
- Arguing that the IMI assessments depend on the legality of the decision denying the exemption, and that the discussion of the latter is open in the context of an administrative action of challenge, the Respondent concludes that the outcome of the latter constitutes a prejudicial issue, and as such, the suspension of the present instance is imperative until the question of discussion of the legality of the denial of the IMI exemption request is settled in the administrative action filed under nº .../16...BEPRT and consolidated in the legal order.
- It alleges that, given the substantive question, as structured by the Claimant in the present case, there is a serious risk that consistency among judgments is not guaranteed, or rather, the principle of homogeneity of decisions.
- And further that the general principle of non-appealability in tax arbitration does not guarantee the uniformization of judgments, which is particularly guaranteed in administrative courts by the possibility of appeal to higher instances.
- Upon appraisal:
- In the action heard by this Arbitral tribunal, discussion occurs regarding the legality of the assessments identified above, because the Claimant believes that the property should benefit from IMI exemption, in accordance with article 44º, nº 1, paragraph n), of the EBF.
- The administrative action filed by the Claimant in the Administrative and Tax Court of Porto is intended to challenge the dispatch of the Chief Financial Officer Porto..., of 28.05.2015, which revoked the exemption that had been granted by the dispatch of 06.09.2011 and communicated by dispatch of 11.07.2012.
- Although both actions imply, from the Claimant's perspective, the necessity of analysis of the same question ─ to determine whether the property should or should not be considered as property "individually" classified as being of public or municipal interest, in accordance with applicable law, for purposes of IMI exemption ─ the truth is that the claims filed are distinct.
- A cause is prejudicial in relation to another when the decision of the former can prejudice the decision of the latter, that is, when the decision of the first deprives of reason for being the existence of the second (Alberto dos Reis, Commentary, III, pg. 206).
- Now, the Tribunal cannot fail to consider the (il)legality of the assessment, in conformity with the factual elements existing at the time, being irrelevant that the dispatch which removed the exemption has been challenged in the Administrative Court.
- With effect, the circumstance that this administrative action is pending does not determine the necessity of suspension of this action, but rather a possible opportune reformulation of the assessments, in conformity with what is decided in that action.
- This would be otherwise only if in that action suspension of the efficacy of the act removing the exemption had been requested, which there is no indication occurred.
- It further appears that, even if, hypothetically, there were basis for suspension of this action, article 272º, nº 2, of the Code of Civil Procedure establishes that, notwithstanding the pendency of a prejudicial cause, suspension should not be ordered if the cause is so advanced that the prejudices of suspension surpass the advantages.
- Given that in this case we are already in the phase of rendering the decision, and that recourse to arbitration is intended to confer greater expedition to the resolution of tax questions, in all circumstances suspension would be inconvenient.
- No prejudice to the Claimant results from what is decided, for, it is reiterated, the possible allowance of the administrative action will have as a consequence the reformulation of the assessments in conformity. And thus any contradiction in the legal order is also avoided.
- And if there is no basis for suspending this action, much less could this Tribunal suspend the action running in the Administrative and Tax Court of Porto, as the Claimant seeks, as it completely lacks competence for such effect ─ only the Court where the action is pending has competence to suspend it.
- Accordingly, the raised preliminary prejudicial issue is denied.
M.3 Of the merits
The Claimant sustains the illegality of the assessments in question by understanding that the property should be considered as property "individually" classified as being of public or municipal interest, in accordance with applicable law, for purposes of the IMI exemption provided for in article 44º, nº 1, paragraph n) of the EBF.
At issue are the assessments for the years 2013, 2014, 2015 and 2016, it being the case that the situation of the first is distinct from the others, and will thus be analyzed separately.
Regarding the assessment for the year 2013
Thus, on 31 December 2014, the date to be taken into account for the assessment of IMI, the exemption granted by the dispatch of 06.09.2011 was still in force, since it was revoked by dispatch of 28.05.2015.
Article 14º of the EBF provides that the administrative act granting a tax benefit is not revocable, nor can the respective agreement of grant be rescinded, or the acquired rights be diminished, by unilateral act of the tax administration, except if there is non-observance attributable to the beneficiary of the obligations imposed, or if the benefit was improperly granted, in which case that act can be revoked.
As is stated in the decision of the STA of 12.05.2013, case 0566/12, dgsi,
This provision aims to grant taxpayers the guarantee that administrative decisions recognizing or granting tax benefits will not be altered except in the circumstances referred to therein, thus allowing them to make their economic-financial choices with security. And those circumstances are only two: (i) non-observance of the obligations imposed by law or by the act recognizing the benefit and which constituted the prerequisite of its legal and functional motivation; (ii) the improper granting of the benefit due to error in the premises on which the act was based.
The ground invoked by the Respondent for proceeding to revoke the exemption was that the benefit was improperly granted, thus fulfilling the second circumstance in which revocation of the tax benefit is admissible.
It remains to determine within what period such revocation is legally admissible.
In this matter, among others, we follow, mutatis mutandis, the aforementioned STA decision, which states:
"The General Tax Law specifically provides for the legal possibility of revocation of administrative acts in tax matters in its article 79º, thus differentiating it from the legal possibility of revision of tax acts contained in article 78º, revision which concerns acts of assessment or acts of fixing the collectible matter, and which, being at the initiative of the Tax Administration due to error attributable to the services, can occur within the period of 4 years after assessment if the tax has been paid, or at any time if the tax has not yet been paid.
But neither that diploma nor the CPPT contains any provision regarding the period for the aforementioned revocation, for which reason such period can only be that contained in the rules of the CPA – a diploma which constitutes complementary and subsidiary legislation to tax law [articles 2º, paragraph c), of the LGT and 2º, paragraph d), of the CPPT] – and which must be applied in tax law in accordance with the nature of the case omitted, more precisely the rules that directly regulate the revocation of administrative acts in articles 136º et seq.
Thus, the period for revocation of such administrative act of grant of IRS exemption can only be that contained in the provisions of the CPA, which is not that relative to the period provided for revision of the assessment of that tax.
Now, in accordance with the provisions of articles 136º and 141º of the CPA, the period for revocation of act constitutive of rights tainted by a defect leading to its annullability, as was invoked in the revocatory act, was that relative to the period for its contentious challenge, which is one year in accordance with article 58º of the CPTA and which was manifestly exceeded."
In summary: The act of revocation of a tax exemption benefit from a tax, which produces ex tunc effects and occurs more than one year after the act granting the exemption, is illegal due to violation of article 141º of the CPA.
Accordingly, the Claimant is correct regarding the assessment for the year 2013, which is thus annulled due to illegality.
Regarding the assessments for the years 2014, 2015 and 2016
Regarding the assessments for the years 2014, 2015 and 2016, the Claimant is not correct, as the assessment act is not tainted with any defect.
With effect, the assessment was made in accordance with the factual and legal elements existing at the time.
It is recalled that the exemption of which the property benefited, granted by dispatch of 06.09.2011, was revoked by the dispatch of the Chief Financial Officer Porto..., of 28.05.2015, with the assessments occurring as a consequence of that dispatch, which produced effects in the legal order (it does not appear that suspension of the efficacy of the act was requested, particularly in the administrative action).
In light of that dispatch, the Respondent could not fail to proceed with these assessments in the manner in which it did.
The assessments in question are thus consequent acts, which Lopes de Sousa, Code of Tax Procedure and Process, Áreas Editora, vol. II, pg. 338, defines as "those that have as their prerequisite the annulled or revoked act and are influenced by its content".
The decision of the administrative action will project its effects on the assessments in question, thus ensuring that the Respondent is not prejudiced if it is found to be correct.
Accordingly, it does not fall within the object of this action to determine whether the property should or should not be considered as property "individually" classified as being of public or municipal interest, in accordance with applicable law, for purposes of IMI exemption.
The claim of the Claimant regarding the assessments for the years 2014, 2015 and 2016 is thus without merit and, in consequence, also, in this case, the request relating to compensatory interest lacks merit.
Regarding the IMI assessment relating to the year 2013, which is judged to be illegal and, consequently, is annulled, the question arises regarding the right to compensatory interest, which was requested by the Claimant.
This matter is regulated in article 24º of the RJAT, which expressly determines in its nº 1, paragraph b) that the arbitral decision obliges the Tax Administration, in the cases specified therein, to "Restore the situation that would have existed if the tax act which is the object of the arbitral decision had not been carried out, adopting the acts and operations necessary for that effect", and further provides in its nº 5 that "Payment of interest is due, regardless of its nature, in accordance with the terms provided for in the general tax law and in the Code of Tax Procedure and Process"
Also article 100º of the LGT, whose application is authorized by the provisions of article 29º, nº 1, paragraph a) of the RJAT, provides in similar terms, to the effect of immediate restoration of legality, understanding the same the payment of compensatory interest, if applicable.
For its part, article 43º, nº 1 of the LGT conditions the right to compensatory interest to cases in which "there was error attributable to the services from which results payment of a tax liability in an amount greater than that legally due".
In this context, the question arises of whether, given the circumstances in which the assessment in question occurred and the jurisprudence established, in particular, by the Supreme Administrative Court, it can be considered that there was an error attributable to the services in the situation at hand.
Now, as was stated previously, the assessment sub judice is illegal and was carried out by the Respondent after the STA had issued extensive pronouncements on this matter, in a sense contrary to that adopted by the Respondent, which it could not be unaware of.
Thus, there is no doubt that the requirement established in article 43º, nº 1 of the LGT is fulfilled, that is, the illegality of the assessment resulted from an error committed by the tax services, a condition for compensatory interest to be exigible.
The Claimant thus has the right not only to reimbursement of the amount paid regarding this IMI assessment for the year 2013, but also to receive compensatory interest, in accordance with the combined provisions of articles 24º, nº 1, paragraph b) of the RJAT and 100º and 43º, both of the LGT, at the rate resulting from nº 4 of article 43º of the LGT.
Regarding responsibility for payment of costs, this matter is regulated in article 572º of the Code of Civil Procedure, applicable by force of article 29º, nº 1, paragraph e) of the RJAT, in such terms as the same be proportional to the default of the Parties.
N. – DECISION
In light of the foregoing, this Arbitral Tribunal decides:
a) To judge without merit the exception raised by the Respondent of incompetence of this Arbitral Tribunal.
b) To judge without merit the preliminary prejudicial issue invoked by the Respondent.
c) To declare the legality of the IMI assessments identified in the Request for Arbitral Pronouncement, concerning the years 2014, 2015 and 2016, in the total amount of 3,367.38 euros, and, consequently, to judge, in this case, without merit the request for recognition of the right to compensatory interest in favor of the Claimant.
d) To declare the illegality of the IMI assessment identified in the Request for Arbitral Pronouncement concerning the year 2013, in the amount of 1,333.58 euros and to judge, in this case, with merit the request for recognition of the right to compensatory interest from the date of its payment until full reimbursement.
e) To condemn both the Claimant and the Respondent to pay the costs of the present proceeding (article 527º, nºs 1 and 2 of the Code of Civil Procedure, ex vi article 29º, nº 1, paragraph e) of the RJAT) in proportion to their default.
Value of the proceeding: In accordance with the provisions of articles 306º, nº 2 of the CPC (former 315º, nº 2) and 97º-A, nº 1 of the CPPT and article 3º, nº 2 of the Regulation of Costs in Tax Arbitration Proceedings, the value of the proceeding is fixed at 5,200.96 euros.
Costs: In accordance with nº 4 of article 22º of the RJAT, the amount of costs is fixed at 612.00 euros, in accordance with Table I attached to the Regulation of Costs in Tax Arbitration Proceedings.
Notify accordingly.
Lisbon, 5 September 2018
The Arbitrator
José Nunes Barata
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