Process: 177/2015-T

Date: November 18, 2015

Tax Type: Selo

Source: Original CAAD Decision

Summary

CAAD Process 177/2015-T addresses a critical dispute regarding Stamp Tax (Imposto do Selo) liability under Verba 28.1 of the General Stamp Tax Table (TGIS) for vertical property ownership. The claimant challenged stamp tax assessments under the transitional regime of Article 6 of Law 55-A/2012, arguing that their property, comprising 16 independent residential units with individual tax patrimonial values ranging from €60,000 to €82,610, should not be subject to stamp tax since no individual unit exceeds the €1,000,000 threshold established by Verba 28.1. The claimant contended that taxing based on the aggregate property value violates the principles of legality, tax equality, and material truth, arguing that vertical property units should be treated equivalently to horizontal property autonomous fractions. The Tax Authority countered that under vertical property regime, the taxpayer owns a single property rather than separate autonomous fractions, and therefore the determinative tax patrimonial value should be calculated globally rather than unit-by-unit. The Respondent emphasized that Article 12(3) of CIMI addresses property registration autonomy but does not create separate properties for tax purposes, and that equating vertical property with horizontal property regimes would contradict the legal framework. The arbitration followed RJAT procedures, with both parties waiving the oral hearing. This case establishes important precedent regarding whether stamp tax on high-value residential properties applies based on individual unit valuation or total property value in vertical ownership structures, with significant implications for real estate taxation in Portugal.

Full Decision

ARBITRAL DECISION

  1. REPORT

1.1. A... – ..., legal entity no. ..., submitted on 16/03/2015 a request for arbitral pronouncement, in which it requests the annulment of stamp tax assessment acts carried out under the transitional regime provided for in Article 6 of Law No. 55-A/2012, of 29 October and those relating to the year 2012.

1.2. The Honourable President of the Ethics Council of the Administrative Arbitration Centre (CAAD), designated on 08/05/2015 as arbitrator, Francisco Nicolau Domingos.

1.3. On 25/05/2015 the arbitral tribunal was constituted.

1.4. Pursuant to the provision of Article 17, No. 1 of Decree-Law No. 10/2011, of 20 January (RJAT) the Respondent was notified on 26/05/2015 to, if it so wished, present a response and request the production of additional evidence.

1.5. On 24/06/2015 the Respondent submitted its response and requested, given the absence of any exception that would prevent the tribunal from hearing the merits, a waiver of the meeting referred to in Article 18 of the RJAT, as well as the presentation of submissions.

1.6. The tribunal, in view of the Respondent's request to waive the holding of the meeting provided for in Article 18 of the RJAT and the presentation of submissions, on 10/08/2015, determined that the Claimant be notified to state whether it intended the holding of such meeting.

1.7. The Claimant on 13/08/2015 came before the tribunal to request a waiver of the said meeting.

1.8. The tribunal, on 29/09/2015 decided, in particular, to waive the holding of the meeting to which Article 18, No. 1 of the RJAT refers, on the basis of the principle of autonomy of the arbitral tribunal in conducting the proceedings and in determining the rules to be observed in order to obtain, within a reasonable time, a pronouncement on the merits of the claims filed, cf. Article 16, paragraph c) of the RJAT, determined that the parties, if they so wished, should present written submissions and scheduled a date for the rendering of the final decision.

1.9. The Claimant presented its submissions on 06/10/2015.

  1. PRELIMINARY MATTERS

The accumulation of claims underlying the present proceedings is admissible, in so far as it concerns acts of assessment of the same tax, stamp tax. As also there is identity between the factual matter and the admissibility of the claim depends on the interpretation of the same principles and rules of law, cf. Article 3, No. 1 of the RJAT.

The proceedings do not suffer from nullities, no questions were raised that would prevent the tribunal from examining the merits of the case, the arbitral tribunal is regularly constituted and is materially competent to hear and decide the claim, and consequently, the conditions are met for a final decision to be rendered.

  1. SUBJECT MATTER OF THE DISPUTE

Preliminarily, the Claimant alleges that: "Faced with the notification of the assessments described below, on 18 April 2013 and 28 November 2013" it filed a gracious complaint with the Tax Authority Office of Loulé, in which it petitioned for the "annulment of all assessments". It states that this was rejected by order of 15/01/2014.

For this reason, it filed on 14/02/2014 a hierarchical appeal of the act of rejection of the gracious complaint, and this was likewise rejected on 26/11/2014, which led to the filing of the present request for arbitral pronouncement.

Regarding the legal framework, the Claimant argues that the application of item 28 of the General Schedule of Stamp Tax (TGIS) requires that: i) there exists a right of ownership of an urban property situated in Portuguese territory; ii) the urban property has a tax patrimonial value (recorded in the register) equal to or greater than €1,000,000; iii) the property has a residential use and iv) the urban property, regardless of residential use, is owned by taxable persons who, not being natural persons, are residents in a country, territory or region subject to a clearly more favourable regime, listed in the schedule approved by order of the Minister of Finance.

Thus, the Claimant argues that the tax patrimonial value of the floors (autonomous units) with residential use ranges between €60,000 and €77,000, therefore, none of the independent units presents a tax patrimonial value greater than €1,000,000 and that there is not a single assessment based on the total tax patrimonial value of the property.

The Claimant concludes by stating that the taxation carried out by the Respondent violates the principles of legality and tax equality, as well as the principle of material truth. Strictly speaking, it considers that the legislator did not intend to tax, under stamp tax, floors or parts of properties capable of independent use with residential use integrated into full property ownership and to leave autonomous fractions with the same use outside the scope of the tax rule, as this would be equivalent to wanting to tax differently equal economic realities.

For its part, the Respondent sustains the legality of the assessment acts. In its view, if the Claimant is the owner of a property under a full or vertical property regime, it does not own autonomous fractions to which the tax law attributes the qualification of property. Therefore, it observes that the Claimant is not the owner of 16 autonomous fractions, but of a single property and, as such, the defect imputed to the acts in question does not exist.

To support such a conclusion, it adds that the Claimant's objective of equating the horizontal property regime with the vertical property regime is unlawful, since: i) although each floor or part capable of independent use is considered separately in the property registration, by virtue of Article 12, No. 3 of the CIMI, the fact is that this occurs in the same register; ii) such norm is relevant for the purposes of property registration, that is, the autonomy that within the same property can be attributed to each of its parts, economically and functionally independent; iii) the unity of the urban property in vertical ownership, composed of several floors or divisions, is not affected by the fact that all or part of them are capable of independent economic use and iv) if the property is still only one, its parts cannot be legally equated to the autonomous fractions existing under the horizontal property regime.

The Respondent further sustains that the fact that the Municipal Property Tax (IMI) is calculated based on the tax patrimonial value of each part of property with independent use does not equally affect the application of item 28.1 of the TGIS, in so far as the determining element thereof is the total tax patrimonial value and not separately each of the portions.

It concludes by stating that a different interpretation would violate the letter and spirit of item 28.1 of the TGIS and the principle of legality of the essential elements of the tax, provided for in Article 103, No. 2 of the CRP. That is, the one that it defends that the tax patrimonial value on which the incidence depends shall be determined globally and not floor by floor or division by division.

  1. FACTUAL MATTERS

4.1. Facts considered proven

4.1.1. The Claimant is the owner of the property corresponding to property registration no. ..., urban, parish of Quarteira, municipality of Loulé.

4.1.2. Such property comprises 16 housing units with independent economic use, registered as follows at the date of the tax facts:

a) A – ..., with a tax patrimonial value of €65,070.00, residential;

b) B – ..., with a tax patrimonial value of €65,070.00, residential;

c) C – ..., with a tax patrimonial value of €64,730.00, residential;

d) D – ..., with a tax patrimonial value of €82,610.00, residential;

e) E – ..., with a tax patrimonial value of €65,070.00, residential;

f) F – ..., with a tax patrimonial value of €65,070.00, residential;

g) G – ..., with a tax patrimonial value of €64,730.00, residential;

h) H – ..., with a tax patrimonial value of €82,610.00, residential;

i) I – ..., with a tax patrimonial value of €65,070.00, residential;

j) J – ..., with a tax patrimonial value of €65,070.00, residential;

l) L – ..., with a tax patrimonial value of €64,730.00, residential;

m) M – ..., with a tax patrimonial value of €82,610.00, residential;

n) N – ..., with a tax patrimonial value of €65,070.00, residential;

o) O – ..., with a tax patrimonial value of €65,070.00, residential;

p) P – ..., with a tax patrimonial value of €64,730.00, residential;

q) Q – ..., with a tax patrimonial value of €82,610.00, residential.

4.1.3. The Claimant was notified of stamp tax assessments, dated 07/11/2012 and relating to the transitional regime established by Article 6 of Law No. 55-A/2012, of 29 October, in relation to each of such property registrations, with residential use, in the total amount of €5,549.60 and which are broken down as follows:

a) A – ..., in the amount of €325.35;

b) B – ..., in the amount of €325.35;

c) C – ..., in the amount of €323.65;

d) D – ..., in the amount of €413.05;

e) E – ..., in the amount of €325.35;

f) F – ..., in the amount of €325.35;

g) G – ..., in the amount of €323.65;

h) H – ..., in the amount of €413.05;

i) I – ..., in the amount of €325.35;

j) J – ..., in the amount of €325.35;

l) L – ..., in the amount of €323.65;

m) M – ..., in the amount of €413.05;

n) N – ..., in the amount of €325.35;

o) O – ..., in the amount of €325.35;

p) P – ..., in the amount of €323.65;

q) Q – ..., in the amount of €413.05.

4.1.4. The Claimant was notified of stamp tax assessments, dated 22/03/2013 and relating to the year 2012, in relation to each of such property registrations, with residential use, in the total amount of €11,099.20 and which are broken down as follows:

a) A – ..., in the amount of €650.70;

b) B – ..., in the amount of €650.70;

c) C – ..., in the amount of €647.30;

d) D – ..., in the amount of €826.10;

e) E – ..., in the amount of €650.70;

f) F – ..., in the amount of €650.70;

g) G – ..., in the amount of €647.30;

h) H – ..., in the amount of €826.10;

i) I – ..., in the amount of €650.70;

j) J – ..., in the amount of €650.70;

l) L – ..., in the amount of €647.30;

m) M – ..., in the amount of €826.10;

n) N – ..., in the amount of €650.70;

o) O – ..., in the amount of €650.70;

p) P – ..., in the amount of €647.30;

q) Q – ..., in the amount of €826.10.

4.1.5. The Claimant filed a gracious complaint on 18/04/2013.

4.1.6. Such complaint was expressly rejected by order dated 15/01/2014.

4.1.7. The Claimant filed a hierarchical appeal of such decision on 17/02/2014.

4.1.8. The appeal referred to in 4.1.7. was expressly rejected by order dated 26/11/2014.

4.1.9. The Claimant made the following payments:

i) Article 6 of Law No. 55-A/2012, of 29 October

a) A – ..., in the amount of €325.35;

b) B – ..., in the amount of €325.35;

c) C – ..., in the amount of €323.65;

d) D – ..., in the amount of €413.05;

e) E – ..., in the amount of €325.35;

f) F – ..., in the amount of €325.35;

g) G – ..., in the amount of €323.65;

h) H – ..., in the amount of €413.05;

i) I – ..., in the amount of €325.35;

j) J – ..., in the amount of €325.35;

l) L – ..., in the amount of €323.65;

m) M – ..., in the amount of €413.05;

n) N – ..., in the amount of €325.35;

o) O – ..., in the amount of €325.35;

p) P – ..., in the amount of €323.65;

q) Q – ..., in the amount of €413.05.

ii) Year 2012

a) A – ..., in the amount of €650.70;

b) B – ..., in the amount of €650.70;

c) C – ..., in the amount of €647.30;

d) D – ..., in the amount of €826.10;

e) E – ..., in the amount of €650.70;

f) F – ..., in the amount of €650.70;

g) G – ..., in the amount of €647.30;

h) H – ..., in the amount of €826.10;

i) I – ..., in the amount of €650.70;

j) J – ..., in the amount of €650.70;

l) L – ..., in the amount of €647.30;

m) M – ..., in the amount of €826.10;

n) N – ..., in the amount of €650.70;

o) O – ..., in the amount of €650.70;

p) P – ..., in the amount of €647.30;

q) Q – ..., in the amount of €826.10.

4.1.10. The property identified in 4.1.1. was not constituted under the horizontal property regime until 31 December 2012.

4.2. Facts not considered proven

There are no facts with relevance to the arbitral decision that have not been given as proven.

4.3. Substantiation of the factual matter considered proven

The factual matter given as proven stems from the documents used for each of the alleged facts, the authenticity of which was not called into question.

  1. LAW

5.1. Illegality of the acts in question

First, there are two issues that the tribunal must decide: to determine whether the subjection to the scope of item 28 of the TGIS should be carried out by the tax patrimonial value corresponding to each of the parts, floors or divisions capable of independent use, or whether, on the contrary, by the sum of the tax patrimonial value of each of such parts. And, secondly, to determine whether the interpretation that concludes that there is only stamp tax incidence when the tax patrimonial value of each of the parts, floors or divisions capable of independent use is greater than €1,000,000, violates the principle of legality of the essential elements of the tax, provided for in Article 103, No. 2 of the CRP.

To accomplish such a task, it is first necessary to seek the norm with respect to which the parties disagree in its interpretation.

Thus, Article 1, No. 1 of the Stamp Tax Code (CIS) and item 28 of the General Schedule of Stamp Tax (TGIS) provide that the following are subject to taxation: "Ownership, usufruct or right of superficies of urban properties whose tax patrimonial value recorded in the register, under the terms of the Code of Municipal Tax on Real Property (CIMI), is equal to or greater than €1,000,000 – on the tax patrimonial value used for the purpose of IMI:

28.1 - For property with residential use - 1%..."[1].

Thus, it is necessary to investigate the concept of "property with residential use" referred to in the norm under interpretation and that of "tax patrimonial value used for the purpose of IMI". Now, as it is not possible to resolve the question using the CIS, it is by virtue of the provision of Article 67, No. 2 of such act that it is necessary to apply the norms of the Code of Municipal Tax on Real Property (CIMI).

Consequently, Article 2 of the CIMI provides on the concept of property:

"1 - For the purposes of this Code, property is any fraction of territory, including water, plantations, buildings and constructions of any kind incorporated therein or situated thereon, with the character of permanence, provided it forms part of the assets of a natural or legal person and, in ordinary circumstances, has economic value, as well as water, plantations, buildings or constructions, in the circumstances mentioned above, endowed with economic autonomy in relation to the land on which they are situated, even though located in a fraction of territory that constitutes an integral part of different assets or does not have a patrimonial nature.

2 - Buildings or constructions, even though movable by nature, are deemed to have the character of permanence when devoted to non-transitory purposes.

3 - The character of permanence is presumed when buildings or constructions have been situated in the same place for a period longer than one year.

4 - For the purposes of this tax, each autonomous fraction, under the horizontal property regime, is deemed to constitute a property".

Now, the concept of property under IMI is, as we know, endowed with greater breadth in relation to that set forth in Article 204, No. 2 of the Civil Code (CC) and encompasses three elements, more specifically, one of a physical nature, the second of a legal character and the last of an economic nature, J. SILVÉRIO MATEUS/L. CORVELO DE FREITAS, Taxes on Real Property. The Stamp Tax., Engisco, 2005, p. 101 to 103 and JOSÉ MARTINS ALFARO, Code of Municipal Tax on Real Property – Commented and Annotated, Áreas Editora, 2004, p. 118 to 123. The first requires reference to a fraction of territory, including, in particular, buildings and constructions incorporated therein with the character of permanence. The element of a legal character requires that the thing, movable or immovable, belongs to the assets of a natural or legal person. Thirdly, the element of an economic nature requires that the thing have economic value.

Concerning the concept of urban property, Article 6 of the CIMI describes its various categories, and the fundamental element for its classification in each of them is the nature of its use, that is, the purpose to which it is destined. And nothing in the structure of Article 6, No. 1, paragraph a) of the CIMI prevents the classification of parts of a property in vertical ownership, with floors or divisions capable of independent use, with a residential use, as "property with residential use". What is relevant is, it is repeated, its use. And a different conclusion cannot be reached by interpreting Article 2, No. 4 of the CIMI, which elevates each autonomous fraction in horizontal property to the category of property. In fact, in this latter norm also it is not possible to discern any basis for discriminating between properties in horizontal ownership and properties in vertical ownership, with parts, floors or divisions capable of independent use, as regards their classification as urban and residential properties, in accordance with the entire structure of item 28 of the TGIS. In other words, if the legislator did not treat properties in vertical ownership differently from those constituted in horizontal ownership, the interpreter should not do so[2].

Quite the contrary, property registration and the determination of the tax patrimonial value demonstrate the similarity of legislative treatment. Indeed, the parts endowed with economic independence must each be the subject of separate property registration and, consequently, the respective tax patrimonial value should likewise be recorded separately, cf. Article 2, No. 4, Article 7, No. 2, paragraph b) and Article 12, No. 3 all of the CIMI. This has an effect in the assessment, in so far as there will be one for each part, floor or division subject to separate use.

Reverting such interpretation to the present case, there are 16 housing units of the property with independent residential use which, at the date of the tax facts, were still not constituted in horizontal property and, consequently, from the outset, there is no doubt that they should be classified as residential urban properties.

It is also important to clarify the other graphic segment of the item of the CIS under interpretation, that is, the "tax patrimonial value used for the purpose of IMI".

In this respect, as already described above, the CIMI provides for the separation of parts of urban property capable of independent use as regards property registration and the specification of the respective tax patrimonial value. Such observation is equally valid with regard to the consequent assessment, as provided for in Article 113, No. 1 and Article 119, No. 1, both of the last cited act. Indeed, if the tax is assessed "…on the basis of the tax patrimonial values of the properties (our emphasis) and in relation to the taxable persons recorded in the registers (our emphasis) …" and the collection document must contain the "…breakdown of the properties, their parts capable of independent use, respective tax patrimonial value and the tax collected…", this means that not only the tax patrimonial value for the purposes of applying item 28.1 of the TGIS to be considered is that which is the subject of separate property registration, but also nothing prevents the qualification as "property with residential use" of parts, floors or divisions with independent use.

Now, if none of the Claimant's housing units with residential use exceeded the tax patrimonial value of €1,000,000, the norm of incidence in question cannot be applicable to the case sub judice, under penalty of illegality. It is repeated that, to determine the scope of such norm, what is relevant is that the parties disagree in its interpretation: i) that the part, floor or division capable of independent use has a tax patrimonial value greater than €1,000,000 and ii) that such part, floor or division has a residential use.

The Respondent argues that it would be unconstitutional, by violation of the principle of legality of the essential elements of the tax, an interpretation of item 28.1 of the TGIS different from that which concludes that the tax patrimonial value relevant to such norm of incidence must be the total tax patrimonial value of the property and not that of each of its independent parts. If this were the case, it would not be understood why there is an express reference to "tax patrimonial value used for the purpose of IMI". And that, there is no doubt, is the subject of separation in relation to each of the parts capable of independent use. Equally, neither would we find an argument for the issuance of autonomous assessment notes. It is further added that, in view of the express reference of Article 67, No. 2 of the CIS to the CIMI, regarding matters not regulated, parts, floors or divisions with autonomy can be classified as properties classified as urban and residential, cf. Articles 2, 3 and 6, all of the CIMI. Thus, it is understood that such interpretation does not suffer from unconstitutionality.

5.2. Compensatory Interest

Article 43, No. 1 of the LGT provides that: "Compensatory interest is due when it is determined, in a gracious complaint or judicial challenge, that there was an error attributable to the services that resulted in payment of the tax debt in an amount greater than legally due". In other words, there are three requirements for the right to such interest: i) existence of an error in a tax assessment act attributable to the services; ii) determination of such error in a gracious complaint procedure or judicial challenge and iii) payment of a tax debt in an amount greater than legally due.

Thus, it is immediately possible to formulate a question: is it admissible to determine the payment of compensatory interest in an arbitral tax proceeding? The answer to the question is affirmative. Indeed, Article 24, No. 5 of the RJAT provides that: "Payment of interest, regardless of its nature, is due, under the terms provided for in the General Tax Law and the Tax Procedure and Process Code".

Addressing the question, the illegality of the acts in question is attributable to the Respondent, given the lack of normative support when they were practiced. Consequently, the request for compensatory interest is well-founded, calculated at the rate determined in accordance with the provision of Article 43, No. 4 of the LGT, between the date on which the undue payment was made and until full reimbursement.

  1. DECISION

In these terms and with the substantiation described above, it is decided to uphold the arbitral claim, with the consequent annulment of the acts subject to this pronouncement, with all legal consequences, including the condemnation of the Respondent to payment of compensatory interest and reimbursement of the amounts unduly paid.

  1. CASE VALUE

The value of the case is fixed at €16,648.80 under the terms of Article 97-A of the CPPT, applicable by virtue of the provision of Article 29, No. 1, paragraph a) of the RJAT and Article 3, No. 2 of the Regulation of Costs in Tax Arbitration Proceedings (RCPAT).

  1. COSTS

Costs to be borne entirely by the Respondent, in the amount of €1,224, cf. Article 22, No. 4 of the RJAT and Table I attached to the RCPAT.

Notify.

Lisbon, 18 November 2015

The arbitrator,

(Francisco Nicolau Domingos)

[1] In the version in force at the date of the tax facts.

[2] See in this sense the arbitral decision rendered in case no. 50/2013 – T, of 29/10/2013, in which the Hon. Dr. MARIA DO ROSÁRIO ANJOS acted as arbitrator.

Frequently Asked Questions

Automatically Created

What is the Stamp Tax (Imposto do Selo) liability under Verba 28.1 of the General Stamp Tax Table for vertical property?
Under Verba 28.1 of the General Stamp Tax Table (TGIS), Stamp Tax applies annually to urban properties with residential use located in Portuguese territory when the tax patrimonial value equals or exceeds €1,000,000. For vertical property ownership, the critical issue is whether the tax patrimonial value threshold applies to each independent floor/unit separately or to the property as a whole. The Tax Authority's position is that vertical property constitutes a single property for tax purposes, even when composed of multiple floors or divisions with independent economic use, meaning the total aggregate tax patrimonial value determines liability. This contrasts with horizontal property (condominium) regimes where autonomous fractions are legally distinct properties. Although Article 12(3) of CIMI allows separate registration of parts capable of independent use within the same property registration, this administrative distinction does not create separate properties for Stamp Tax purposes. Consequently, if the combined tax patrimonial value of all units within a vertical property exceeds €1,000,000, the property becomes subject to Stamp Tax under Verba 28.1, regardless of individual unit values.
How does the transitional regime of Article 6 of Law 55-A/2012 apply to Stamp Tax liquidations?
The transitional regime established by Article 6 of Law 55-A/2012, of 29 October, governed the initial application of Stamp Tax to high-value residential properties when Verba 28.1 TGIS was introduced. This provision created specific rules for properties already owned when the tax came into effect, establishing assessment procedures and deadlines for the Tax Authority to liquidate stamp tax for transitional years. Taxpayers challenging assessments made under this transitional regime must follow administrative procedures (gracious complaint and hierarchical appeal) before accessing arbitration. In Process 177/2015-T, the claimant challenged both transitional regime assessments and those relating to year 2012, having exhausted administrative remedies through gracious complaint (rejected 15/01/2014) and hierarchical appeal (rejected 26/11/2014) before filing the CAAD arbitration request on 16/03/2015. The transitional regime's application requires careful analysis of property ownership structures existing at the time Law 55-A/2012 entered into force, particularly for complex ownership arrangements like vertical property where valuation methodology significantly impacts tax liability determination.
Can multiple Stamp Tax liquidation acts be challenged in a single CAAD arbitration request?
Yes, multiple Stamp Tax liquidation acts can be accumulated and challenged in a single CAAD (Administrative Arbitration Centre) arbitration request, provided specific legal requirements are met. According to Article 3(1) of RJAT (Legal Regime of Tax Arbitration), accumulation is admissible when: (i) the claims concern assessment acts of the same tax; (ii) there is identity of factual matters; and (iii) the admissibility of claims depends on interpretation of the same legal principles and rules. In Process 177/2015-T, the tribunal explicitly confirmed that accumulation was proper because all challenged acts involved Stamp Tax assessments, shared common factual circumstances regarding vertical property ownership, and required interpretation of identical legal provisions (Verba 28.1 TGIS, Article 6 of Law 55-A/2012). This procedural efficiency allows taxpayers to comprehensively challenge related assessments in a single proceeding, avoiding multiple arbitration requests for the same underlying legal and factual issues. The accumulation included both transitional regime assessments under Article 6 of Law 55-A/2012 and assessments for year 2012, streamlining resolution of the dispute regarding proper stamp tax treatment of the vertical property structure.
What is the CAAD arbitral procedure for disputing Stamp Tax assessments on real estate?
The CAAD arbitral procedure for disputing Stamp Tax assessments follows the framework established by Decree-Law 10/2011 (RJAT). The process begins with exhausting administrative remedies: taxpayers must first file a gracious complaint (reclamação graciosa) with the relevant Tax Authority office, and if rejected, file a hierarchical appeal (recurso hierárquico). Only after these administrative procedures are completed can taxpayers submit an arbitration request to CAAD. Once filed, the President of CAAD's Ethics Council designates an arbitrator who constitutes the arbitral tribunal. Under Article 17(1) RJAT, the Tax Authority is notified to present a response and request additional evidence if desired. The tribunal may conduct hearings under Article 18 RJAT, though parties can waive this requirement by mutual agreement, as occurred in Process 177/2015-T. The tribunal enjoys procedural autonomy under Article 16(c) RJAT to determine rules for obtaining timely decisions, including scheduling written submissions instead of oral hearings. The procedure must address preliminary matters (competence, nullities, admissibility) before examining the merits. CAAD arbitration provides an alternative to judicial tax courts, offering specialized expertise in tax matters with streamlined procedures designed for efficient dispute resolution.
What are the grounds for annulment of Stamp Tax liquidations related to vertical property ownership?
Grounds for annulment of Stamp Tax liquidations related to vertical property ownership center on legal interpretation of Verba 28.1 TGIS and fundamental tax principles. Key annulment grounds include: (1) Violation of the legality principle - arguing that the tax law's €1,000,000 threshold applies to individual autonomous units rather than aggregate property value, and that taxing based on total value exceeds statutory authorization; (2) Violation of tax equality - contending that treating vertical property differently from horizontal property (where autonomous fractions are taxed separately) creates unjustified discrimination between economically equivalent situations; (3) Violation of material truth principle - asserting that the factual reality of independent housing units with separate economic use should determine tax treatment rather than formal property registration structure; (4) Improper application of CIMI Article 12(3) - arguing that separate registration of parts capable of independent use creates distinct taxable properties; and (5) Incorrect legal qualification - claiming that floors or divisions with independent residential use in vertical property should be treated as separate properties equivalent to horizontal property autonomous fractions. The Tax Authority defends liquidations by arguing vertical property constitutes a single property where total tax patrimonial value determines Verba 28.1 applicability, regardless of internal division into independent units.