CAAD 179/2015-T: Stamp Tax Verba 28.1 on Vertical Property – Exemption Ruling

ARBITRAL DECISION

1. REPORT

1.1

A…, in the capacity of head of the undivided estate opened by the death of B…, taxpayer no. …, domiciled at Street …, no. …, in … (hereinafter designated "Claimant"), submitted on 16/03/2015 a request for arbitral pronouncement with a view to the assessment and declaration of illegality of the acts of assessment of Stamp Tax for the year 2012, relating to the application of Item 28.1 of the General Table of Stamp Tax (General Table), in the total amount of € 12,050.70 (twelve thousand and fifty euros and seventy cents) to properties of which it is owner.

1.2

His Excellency the President of the Deontological Council of the Administrative Arbitration Centre (CAAD) designated, on 08/04/2015, the undersigned as sole arbitrator of this decision.

1.3

On 09/06/2015 the arbitral tribunal was constituted.

1.4

In compliance with the provisions of Article 17, no. 1 of the Legal Framework for Tax Arbitration (RJAT), the Tax and Customs Authority (AT) was notified on 09/06/2015 to, if it wished, submit a response and request the production of additional evidence.

1.5

On 08/07/2015 the AT submitted its response, accompanied by a request in which it requested the dispensation from holding the meeting described in Article 18 of the RJAT.

1.6

The arbitral tribunal on 08/07/2015 decided to dispense with the holding of the meeting referred to in Article 18, no. 1 of the RJAT, based on the principle of the autonomy of the arbitral tribunal in the conduct of proceedings, inviting both parties, if they wished, to submit optional written submissions and scheduled the date for the pronouncement of the final decision.

1.7

On 09/07/2015 the Claimant submitted a request to the record requesting the dispensation from the production of the testimonial evidence requested and likewise the submission of submissions.

1.8

The AT did not submit written submissions.

2. ASSESSMENT OF JURISDICTION AND PROCEDURAL REQUIREMENTS

The arbitral tribunal was regularly constituted and has material jurisdiction.

The parties have legal personality and capacity and are legitimate, with no defects in representation.

There are no nullities, exceptions or preliminary issues that prevent the tribunal from considering the merits, and it is not incumbent upon the tribunal to consider them ex officio.

The request for constitution of the arbitral tribunal was submitted within the deadline provided in Article 10, no. 1, subparagraph (a) of the RJAT, calculated from the notification of the decision dismissing the hierarchical appeal filed from the amicable reclamation submitted by the Claimant with reference to the Stamp Tax assessments identified above, and is therefore timely.

Consequently, the conditions are met for the final decision to be delivered.

3. POSITIONS OF THE PARTIES

There are two opposing positions: that of the Claimant, set out in the request for arbitral pronouncement, and that of the AT in its response.

In summary, the Claimant takes the view that:

a) The "(…) Stamp Tax assessments which are the subject of this request for arbitral pronouncement concern an urban property in sole ownership with floors or divisions susceptible to independent use (…) which was the property of the Claimant A… and her deceased husband B… (…)";

b) "The said urban property is (…) composed (…) of six floors, with 11 independent divisions (…)";

c) "All these 11 divisions are functionally and economically independent, being distinct and isolated from one another, with direct access to a common part of the property or to public way (…)", and "(…) to each of these 11 divisions there corresponds its own matrix entry (…)";

d) Notwithstanding the above, "(…) the AT presumed that it was a single property, and that, given that the sum of the VPT [Tax Patrimonial Value] attributed by it to each of its 11 autonomous divisions amounted to € 1,205,070.00, the ownership of that property would be subsumed under Item 28.1 of the General Table of Stamp Tax (TGIS), because the VPT used for IMI [Urban Real Estate Tax] purposes was thus higher than € 1,000,000.00 referred to in that Item 28.1 of the TGIS.";

e) This is because "(…) the concept of property used by the legislator in Item 28.1 of the TGIS does not equate to the concept of property that was considered by the AT when making the Stamp Tax assessments under review.";

f) "What the legislator intended with that item was to tax the contributory capacity revealed by taxpayers who were owners, usufructuaries or holders of the right of superficies of dwellings (whether villas or apartments, and, from 2014 onwards, also land for construction (…) whose VPT was equal to or greater than € 1,000,000.00.";

g) "This is also what results from the content of legislative proposal no. 96/XII (2nd) which led to Law no. 55-A/2012, of 29 October (and in which in its explanatory memorandum, reference is made to the creation of a tax, within the scope of stamp tax, which would apply to urban properties intended for residential use whose patrimonial value exceeded € 1,000,000.00), as well as from the content of the very intervention of the Secretary of State for Tax Affairs at the time of the presentation and discussion of such proposal (…)";

h) "Now, the concept of property underlying that norm does not, therefore, correspond to that provided in Article 2, in the interpretation that the AT would have made of it, that is, that in cases of properties with floors or divisions susceptible to independent use, only where there is condominium ownership does each autonomous unit constitute a property (…)";

i) "If the parts of the property in sole ownership are functionally and economically independent, being able, thus, each one of them to be used, in an autonomous and independent manner, for housing or commercial purposes, each one of these parts shall only be subject to Stamp Tax by virtue of Item no. 28.1 of the TGIS if its respective VPT is equal to or greater than € 1,000,000.00.";

j) "(…) In making the assessments whose legality is being challenged on the basis of an interpretation of the content of Item 28/28.1 of the TGIS that has no correspondence in its letter and/or in its spirit, the AT created rules itself, with a flagrant violation of the principle of constitutional and legally enshrined legality (…) in addition to (…) having violated the principles of tax equality, justice and the prevalence of material truth over tax-legal reality.".

On the other hand, the AT maintains that:

a) "The author of the request for arbitral pronouncement acknowledges that the subjection to stamp tax of item 28.1 of the General Table results from the mere conjunction of two facts, namely the intended residential use and the patrimonial value of the urban property registered in the matrix being equal to or greater than € 1,000,000.00.";

b) "However, when the urban property is composed of floors or divisions, the subjection to stamp tax is determined, not based on the total patrimonial value of the property, but on the patrimonial value of each floor or division.";

c) "This fact would be implicitly recognized by the A.T. in the very act of assessment, which would declare as subject to tax only the patrimonial value of the floors or divisions with residential use that make up the property in question, with the exclusion of those that do not have residential use.";

d) "It is, on the other hand, the patrimonial value registered in the matrix that the legislator of item 28.1 of the General Table determines that it be taken into account in its application.";

e) "One cannot understand, contrary to what results from the stamp tax assessment being challenged, how that value could in any way be understood as the sum of the patrimonial value of the urban properties susceptible to residential use.";

f) "If the subjection of each dwelling to stamp tax under item 28 of the General Table were to be determined as a function of the other dwellings in the property, as is implicit in the assessment being challenged, the taxable event would cease to be the patrimonial value capable of being imputed to each dwelling, but the full patrimonial value of each urban property.";

g) "The concentration in each property of independent dwellings is not, therefore, capable of triggering the incidence of stamp tax on each of them.";

h) "Item 28 of the General Table provides for stamp tax to apply to the ownership, usufruct or right of superficies of urban properties whose patrimonial value registered in the matrix, in accordance with the IMI Code, is equal to or greater than € 1,000,000.00";

i) "(…) in the case of urban properties with residential use, the tax applies to the patrimonial value used for IMI purposes.";

j) "From these legal provisions it follows that the taxable event of stamp tax under item 28.1 consists of the ownership, usufruct or right of superficies of urban properties whose patrimonial value registered in the matrix, in accordance with the IMI Code, is equal to or greater than € 1,000,000.00.";

k) "The patrimonial value relevant for the purposes of the incidence of the tax is, therefore, the total patrimonial value of the urban property and not the patrimonial value of each of the parts that compose it, even when susceptible to independent use.";

l) "The urban property of the estate of C… is not in a condominium ownership regime, in which case each of the autonomous units would be treated as an urban property, including for the purposes of the subjection to stamp tax under item 28.1 of the General Table, but in a vertical ownership regime.";

m) "The unity of the urban property in vertical ownership composed of various floors or divisions is not, however, affected by the fact that all or part of those floors or divisions are susceptible to independent economic use.";

n) "Such a property does not cease to be one, being thus its parts not legally equated to the autonomous units in condominium ownership regime.";

o) "The fact that the urban property with residential use is part of an undivided estate does not prejudice the application of item 28 of the General Table.";

p) "The fact that the IMI was calculated based on the patrimonial value of each part of the property with independent economic use does not likewise affect the application of item 28, no. 1, of the General Table.";

q) "This is because the determining fact for the application of that item of the General Table is the total patrimonial value of the property and not separately that of each of its portions.";

r) "It is, therefore, unconstitutional, as offensive to the principle of tax legality, the interpretation of item 28.1 of the General Table, in the sense that the patrimonial value on which its incidence depends is determined globally and not floor by floor or part by part.";

s) Concluding, "The tax act in question did not, therefore, violate any legal or constitutional provision and should, thus, be upheld.".

4. OBJECT OF THE REQUEST

The questions that the Claimant wishes to have decided, all relating to the interpretation and application of Item 28.1 of the General Table (added by Article 4 of Law no. 55-A/2012, of 29 October), are:

• The legality of the Stamp Tax assessments regarding the global patrimonial value of a building, corresponding to the sum of the patrimonial values of various floors or divisions susceptible to independent use;

• The legality of the act of the AT that substantively reviewed the legality of the said assessments, which dismissed as unfounded the hierarchical appeal filed against the decision that denied the amicable reclamation, thereby endorsing the illegalities of the same.

5. FACTUAL MATTERS

5.1 FACTS FOUND TO BE PROVEN

In light of the documents submitted with the process, the following facts are found to be proven:

5.1.1

The Claimant, widow of B…, is the head of his estate, who died on 05/04/2013, whose heirs are the Claimant herself, who was married to the deceased under the general community of property regime, and their son, D….

5.1.2

Part of the estate is the property located at Street …, no. …, in ..., with six floors, registered in the urban property matrix of the parish of ..., municipality of ..., under matrix entry no. …, which was the property of the Claimant and her deceased husband B….

5.1.3

The property which is the subject of these proceedings is in sole ownership with floors or divisions susceptible to independent use, composed of a shop on the ground floor and 5 floors intended for housing, in a total of 11 divisions with independent use, namely: shop; 1st Right; 1st Left; 2nd Right; 2nd Left; 3rd Right; 3rd Left; 4th Right; 4th Left; 5th Right and 5th Left.

5.1.4

The property in question was registered in the matrix on … and the patrimonial value ("VPT") registered in 2012 in the property record issued by the Tax Service of ... … - ... were, respectively, of: € 188,570.00; € 101,650.00; € 101,650.00; € 101,650.00; € 101,650.00; € 101,650.00; € 101,650.00; € 101,650.00; € 101,650.00; € 101,650.00 and € 101,650.00, the total of the 11 divisions amounting to € 1,205,070.00.

5.1.5

The Claimant was notified of the acts of assessment of Stamp Tax for the year 2012, contained in the collection documents for payment of the first installment of the tax assessed for each floor or division with independent use intended for housing of the said urban property, at the rate of 1%, with the payment deadline in April 2013, as follows discriminated:

5.1.6

The voluntary payment of the Stamp Tax assessments being challenged, 1st installment, in the amount of € 4,016.98, was made on 24/04/2013.

5.1.7

The Claimant was notified of the acts of assessment of Stamp Tax for the year 2012, contained in the collection documents for payment of the second installment of the tax assessed for each floor or division with independent use intended for housing of the said urban property, at the rate of 1%, with the payment deadline in July 2013, as follows discriminated:

5.1.8

The voluntary payment of the Stamp Tax assessments being challenged, 2nd installment, in the amount of € 4,016.86, was made on 26/07/2013.

5.1.9

The Claimant was notified of the acts of assessment of Stamp Tax for the year 2012, contained in the collection documents for payment of the third installment of the tax assessed for each floor or division with independent use intended for housing of the said urban property, at the rate of 1%, with the payment deadline in November 2013, as follows discriminated:

5.1.10

The voluntary payment of the Stamp Tax assessments being challenged, 3rd installment, in the amount of € 4,016.86, was made on 21/11/2013.

5.1.11

The Claimant filed, on 19/08/2013, an amicable reclamation against the acts of assessment of Stamp Tax for the year 2012, requesting their annulment.

5.1.12

On 21/11/2013, the Claimant was notified of the decision dismissing in full the request made in the amicable reclamation identified in 5.1.11.

5.1.13

Subsequently, the Claimant filed, on 23/12/2013, a hierarchical appeal against the decision dismissing the acts of assessment of Stamp Tax for the year 2012, requesting their annulment.

5.1.14

On 15/12/2014, the Claimant was notified of the decision dismissing the request made in the hierarchical appeal identified in 5.1.13.

5.1.15

Due to an oversight in the identification of the Stamp Tax assessments in dispute, the decision dismissing the hierarchical appeal identified in 5.1.14 was revoked and replaced by a new dismissal decision of 13/03/2015.

5.2 FACTS NOT FOUND TO BE PROVEN

There are no facts with relevance to the decision that have not been found to be proven.

6. THE LAW

The question to be decided is whether the tax acts assessing Stamp Tax are illegal, due to erroneous interpretation and application of Item no. 28.1 of the General Table, added by Law no. 55-A/2012, of 29 October, in considering that the patrimonial value ("VPT") of an urban property constituted in sole ownership, with floors or divisions susceptible to independent use intended for housing which is relevant for the purposes of the incidence of that item is constituted by the value resulting from the sum of the patrimonial value ("VPT") imputed to each of those floors or divisions. Furthermore, whether the Stamp Tax assessments suffer, moreover, from the defect of unconstitutionality, due to violation of the principles of legality, tax equality, justice and the prevalence of material truth over tax-legal reality.

On this matter, there is already abundant case law from the Supreme Administrative Court (STA) and arbitral case law in proceedings no. 245/2014-T, 152/2015-T and 021/2015-T, whose arbitral case law we follow. [1]

As results from the established facts, the AT assessed Stamp Tax to the undivided estate, at the rate of 1%, on the grounds that the VPT of the urban property constituted in sole ownership which is part of that estate exceeds € 1,000,000.00, taking into account the sum of the VPT of each of the 11 floors or divisions with independent use intended for housing that make up the said property.

Let us see.

Article 4 of Law no. 55-A/2012, of 29 October made an addition to the General Table of Item no. 28, with the following wording (in its original version):

"28 - Ownership, usufruct or right of superficies of urban properties whose patrimonial value registered in the matrix, in accordance with the Code of the Urban Real Estate Tax (CIMI), is equal to or greater than € 1,000,000 - on the patrimonial value used for IMI purposes:

28.1 - For property with residential use - 1%;

28.2 - For property, when the passive subjects who are not natural persons are resident in a country, territory or region subject to a clearly more favourable tax regime, contained in the list approved by order of the Minister of Finance - 7.5%."

With Article 6, no. 1 of the Law in question providing that, for the year 2012, "the patrimonial value to be used in the assessment of the tax corresponds to that resulting from the rules provided in the Urban Real Estate Tax Code by reference to the year 2011;".

At the date of the events, the presuppositions of incidence of Item 28.1 of the General Table are thus urban properties with residential use whose VPT registered in the matrix and used for purposes of IMI assessment is equal to or greater than € 1,000,000.00.

Law no. 55-A/2012, of 29 October, by reference to item 28 of the General Table, also established several amendments to the Stamp Tax Code, in particular, as to its assessment and payment, expressly referring to the rules provided in the IMI Code [2] with the necessary adaptations, also providing in Article 67, no. 2 of the Stamp Tax Code that, "To matters not regulated in this Code concerning item no. 28 of the General Table, the provisions of the CIMI shall apply, subsidiarily.".

From the analysis of the aforementioned rules, it is verified that the concept of "property with residential use" provided in the aforementioned Item no. 28, no. 1 of the General Table is not defined in the Stamp Tax Code, nor in the aforementioned Law no. 55-A/2012, of 29 October, nor in the IMI Code, whose rules are of subsidiary application, given the provision in Article 67, no. 2 of the Stamp Tax Code.

On this question, the arbitral tribunal has already pronounced itself in the decision delivered in proceedings no. 53/2013-T, which we follow here, by understanding that a "property with residential use" must be "a property that already has effective use for that purpose".

It is thus unequivocal that a property in sole ownership or in a vertical ownership regime constitutes an urban property, in accordance with the provision in Article 2, no. 1 and Article 4, no. 1 of the IMI Code, applicable subsidiarily, and it is also certain that, both for purposes of the incidence of Item 28.1 of the General Table and for purposes of classification of urban properties [3], the legislator makes no distinction between properties constituted in vertical ownership and in condominium ownership regime (as mentioned in the arbitral decisions delivered in proceedings no. 50/2013-T and no. 132/2013-T), the tax presupposition of Item 28.1 of the General Table being urban properties that effectively are already intended for housing, since what is relevant is the effective and current use of each of the properties.

What then will be the patrimonial value relevant in the case of urban properties in sole ownership regime composed of floors or divisions susceptible to independent use with "residential use", for purposes of the incidence of Item 28.1 of the General Table?

As results from Item 28.1 itself of the General Table (in its original wording) and from Article 6, no. 1 of Law no. 55-A/2012, of 29 October, Stamp Tax shall apply to the VPT used for purposes of IMI.

Let us see, therefore, what VPT is used for purposes of IMI.

Now, the VPT of each property is determined in accordance with Article 38 and following of the IMI Code, in conformity with what is provided in Article 7, no. 1 of the IMI Code. In the case of a property in sole ownership or vertical regime, each floor or division with independent use that is part of it is also subject to assessment, and each is assigned a patrimonial value to each of those floors or divisions, in conformity with the provision in Articles 12 and 38 of the IMI Code.

In fact, Article 12, no. 1 of the IMI Code provides that "property matrices are registers containing, inter alia, the characterisation of properties, location and their patrimonial value, identification of owners (…)", further providing in no. 3 that, "Each floor or part of property susceptible to independent use is considered separately in the matrix entry, which also discriminates the respective patrimonial value", and, in conformity with the provision in Article 119, no. 1 of the IMI Code, it is on that patrimonial value considered separately that the IMI shall be calculated and assessed in relation to each floor or part with independent use that are part of an urban property in a vertical or sole ownership regime, given the autonomy of each of those units.

As Silvério Mateus and Corvelo de Freitas state [4], "Another aspect that should be emphasized in the matrix concerns the need to highlight the autonomy that, within the same property, can be attributed to each of its parts, functionally and economically independent.

In these cases, the matrix entry must not only make reference to each of these parts but must make express reference to the patrimonial value corresponding to each of them. An example that can illustrate this situation is the case of an urban property, not constituted in condominium ownership regime and composed of several floors. (…) However, since each of these units can be the object of rental or any other use by the respective holder, the matrix must highlight these units and patrimonial value must be attributed to each of them." [emphasis ours].

As highlighted in the arbitral decision delivered in proceedings no. 194/2014-T, which we also follow, "the IMI Code enshrines, both as to matrix entry and discrimination of the respective patrimonial value, and as to the assessment of the tax, the autonomization of the parts of urban property susceptible to independent use and the segregation/individualization of the VPT relating to each floor or part of property susceptible to independent use.

Thus to each property, in accordance with the concept defined in Article 2 of the CIMI, corresponds a single entry in the matrix (Article 82, no. 2 of the CIMI) but, according to Article 12, no. 3 of the same Code, concerning the concept of property matrix (…), "each floor or part of property susceptible to independent use is considered separately in the matrix entry, which also discriminates the respective patrimonial value (…).

That is, the rule is the autonomization, the characterization as "property" of each part of a building, as long as it is functionally and economically independent, susceptible to independent use, in accordance with the concept of property defined from the outset in Article 2, no. 1 of the CIMI: property is any parcel (of land, encompassing waters, plantations, buildings and constructions of any nature incorporated or resting thereon, with a character of permanence) as long as it forms part of the assets of a natural or legal person and, under normal circumstances, has economic value, as well as waters, plantations, buildings or constructions, in the above circumstances, endowed with economic autonomy.".

Bearing in mind that in light of the IMI Code, the floors or divisions with independent use that compose an urban property in sole ownership or vertical regime are taxed autonomously, since IMI is assessed individually on the VPT attributed to each of those floors or divisions with independent use, given the relevance of their autonomy, necessarily, the principles and rules must be the same in the sphere of Stamp Tax (notably, as to matrix entry and IMI assessment), both because Item 28.1 of the General Table thus imposes at the end, and by subsidiary application, by virtue of the provision in Article 67, no. 2 of the Stamp Tax Code.

Consequently, and, in the premise that the legislator in question "enshrined the most accurate solutions and knew how to express his thinking in adequate terms" (cf. the provision in Article 9, no. 3 of the Civil Code ("CC"), by referral of Article 11 of the General Tax Law), only those floors, parts or divisions with independent use with residential use whose VPT is equal to or greater than € 1,000,000.00 are covered by the rule of incidence of Item 28.1 of the General Table.

Thus, and as stated in the arbitral decision delivered in proceedings no. 132/2013-T, "The uniform criterion that is required is, therefore, that which determines that the incidence of the rule in question only takes place when some of the parts, floors or divisions with independent use of property in condominium or sole ownership with residential use, possesses a VPT greater than € 1,000,000.00" and not when that value results from the sum of the VPT imputed to each floor or division with independent use.

As likewise mentioned in the arbitral decision delivered in proceedings no. 50/2013-T, "The criterion sought by the AT, of considering the value of the sum of the VPT attributed to the parts, floors or divisions with independent use, with the argument that the property is not constituted in condominium ownership regime, finds no legal support and is contrary to the criterion applicable in the sphere of CIMI and, by referral, in the sphere of Stamp Tax.

To which is added the fact that the law itself expressly establishes, in the final part of item 28 of the TGIS, that the Stamp Tax to apply to urban properties of value equal to or greater than €1,000,000.00 – "on the patrimonial value used for IMI purposes.".

By all the above, one cannot agree with the AT's understanding.

In fact, if it is the very provision in Item 28.1 of the General Table at the end that determines that Stamp Tax applies "on the patrimonial value used for IMI purposes", what is relevant for tax incidence purposes is the patrimonial value individualized for each of the parts, floors or divisions with independent use on which IMI is assessed annually, that is, the Stamp Tax assessment follows the rules provided in the IMI Code, by express referral of the aforementioned Item 28 of the General Table and Article 67, no. 2 of the Stamp Tax Code.

Such is the case that the AT, in order to assess Item 28.1 of the General Table under examination, starts from each of those floors or divisions with independent use, applying the 1% rate on the patrimonial value attributed to each of those divisions with residential use, in accordance with the rules of the IMI Code, and then sums that patrimonial value.

The interpretation in the sense that what is relevant in the rule of incidence of Item 28.1 of the General Table is the VPT imputed to each of the autonomous parts, floors or divisions with independent use with residential use and not the value resulting from the sum of those patrimonial values is also that which results from its ratio legis, as required by Article 9, no. 1 of the CC, applicable by virtue of the provision in Article 11 of the General Tax Law.

In fact, in the presentation and discussion of Legislative Proposal no. 96/XII/2nd (available in the Journal of the Portuguese Parliament, I Series no. 9/XII/2012, of 11-10-2012) in the Portuguese Parliament, the Secretary of State for Tax Affairs declared the following:

"It is the first time in Portugal that special taxation is created on high-value properties intended for housing. This rate will be 0.5% to 0.8%, in 2012, and 1%, in 2013, and will apply to houses of value equal to or greater than 1 million euros. With the creation of this additional tax, the fiscal burden required of these owners will be significantly increased in 2012 and 2013" [emphasis ours].

On this matter, we follow the arbitral decision delivered in proceedings no. 50/2013-T in stating that "The legislator in introducing this legislative innovation considered as the determining element of contributory capacity urban properties with residential use of high value (luxury), more rigorously, of value equal to or greater than € 1,000,000.00, on which it then applied a special stamp tax rate, intending to introduce a principle of taxation on wealth externalized in the ownership, usufruct or right of superficies of high-value urban properties with residential use. Therefore, the criterion was the application of the new rate to urban properties with residential use whose VPT is equal to or greater than € 1,000,000.00.

This same conclusion is drawn from the analysis of the discussion of legislative proposal no. 96/XII in the Portuguese Parliament, available for consultation in the Journal of the Portuguese Parliament, I series, no. 9/XII/2, of 11 October 2012.

The justification for the measure designated as "special rate on urban properties with residential use of higher value" is based, therefore, on the invocation of the principles of social equity and tax justice, calling upon the holders of high-value properties intended for housing to contribute in a more intense manner, applying the new special rate to "houses of value equal to or greater than 1 million euros".

Clearly the legislator understood that this value, when imputed to a dwelling (house, autonomous unit or floor with independent use) translates a contributory capacity above average and, as such, capable of determining a special contribution to ensure the just distribution of fiscal burden.".

Thus, and in accordance with the established facts, the VPT of each of the 11 floors or divisions with independent use intended for housing which are part of the property constituted in sole ownership which belongs to the undivided estates, and which was determined according to the rules of the IMI Code, is less than € 1,000,000.00, the presuppositions of taxation under Item 28.1 of the General Table thus not being met.

Consequently, the tax acts assessing Stamp Tax, which are the subject of this proceedings for arbitral pronouncement, in the total amount of € 12,050.70, suffer from the defect of violation of the provision in Item 28.1 of the General Table and Article 67, no. 2 of the Stamp Tax Code, due to error on their legal presuppositions, declaring thus the illegality of those assessment acts, with the consequent annulment thereof.

In fact, this renders moot the examination of the other questions raised by the Claimant, in particular, the alleged defect of unconstitutionality and likewise the annulment of the decision that dismissed the hierarchical appeal, given that the illegality of the assessments identified above has been declared, due to a substantive defect that prevents the renewal of the acts, effectively securing the protection of the Claimant's rights, in accordance with the provision in Article 124 of the Code of Tax Procedure and Process [5].

7. DECISION

With the grounds set out above, the arbitral tribunal decides:

a) To uphold the request for arbitral pronouncement and, in consequence, to declare illegal the Stamp Tax assessments contained in the identified collection documents, with all legal consequences;

b) To uphold the Claimant's claim for recognition of the right to payment of interest on damages;

c) To order the AT to refund to the Claimant the Stamp Tax improperly paid, in the amount of € 12,050.70;

d) To order the AT to pay costs.

8. VALUE OF THE PROCEEDINGS

The value of the proceedings is fixed at € 12,050.70 (twelve thousand and fifty euros and seventy cents), in accordance with Article 97-A of the Code of Tax Procedure and Process (CPPT), applicable by virtue of Article 29, no. 1, subparagraphs (a) and (b) of the RJAT and Article 3, no. 2 of the Regulation of Costs in Tax Arbitration Proceedings (RCPAT).

9. COSTS

Costs to be borne by the AT, in the amount of € 918 (nine hundred and eighteen euros), in accordance with Table I of the Regulation of Costs in Tax Arbitration Proceedings, in accordance with Article 22, no. 2 of the RJAT.

Let notification be given.

Lisbon, 2 October 2015

The Arbitrator,

Hélder Filipe Faustino

Text prepared by computer, in accordance with the provision in Article 131, no. 5 of the Code of Civil Procedure, applicable by referral of Article 29, no. 1, subparagraph (e) of the RJAT. The preparation of this decision is governed by the spelling prior to the 1990 Orthographic Agreement.

[1] Cf. Andreia Gabriel Pereira, "The «Luxury Houses» and Stamp Tax. Commentary to the judgment of the Supreme Administrative Court (2nd Section), of 5 February 2015, delivered in proceedings no. 0993/14, Rapporteur Cons. Francisco Rothes", Journal of Public Finance and Tax Law, Year VII, No. 4, July 2015, pp. 235 et seq.

[2] Cf. Article 23, no. 7, Article 44, no. 5, Article 46, no. 5 and Article 49, no. 3 of the Stamp Tax Code.

[3] Cf. Article 6 of the IMI Code (also of subsidiary application).

[4] "Real Estate Property Taxes and Stamp Tax, Commented and Annotated", pages 159 and 160.

[5] Subsidiarily applicable by virtue of the provision in Article 29, no. 1, subparagraph (a) of the RJAT.